Four things you need to know about pay gaps
Four things you need to know about pay gaps
Rachael Owhin, EDI Consultant, The Equal Group
Pay gaps are not the same as equal pay
The Gender Pay Gap is the comparison between the mean and median average pay of men and women. It is not the same as equal pay (Equal Pay Act 1970) which states that men and women should be paid equally for the same or similar work.
Pay gaps are a result of inequality between various demographic groups, gender is just one case. For example, pay gaps exist between White employees and all Ethnic Minority employees, and between non-disabled employees and disabled employees. We have equality laws that make it illegal to pay people differently for the same job, but this is about minority and underrepresented groups being overrepresented in low paid and part-time jobs.
Fewer companies are reporting their gender pay gap
Gender pay gap reporting was introduced in 2017 to address the disparity between men and women in salary, which stood at 17.3%, 50 years after the Equal Pay Act of 1970. 10,566 organisations reported their gender pay gap in 2018, rising to 10,833 in 2019 – unfortunately, this dropped to 6,255 in 2020 and 3,425 by April of 2021 (deadline extended to October). This may be a result of it not currently being mandatory due to the pandemic, which raises the question of how seriously the current government takes the gender pay gap issue. Is gender equality an added extra, an afterthought, or is it essential?
The UK gender pay gap isn’t intersectional
In 2020, the gender pay gap was 15.5% across all workers, meaning women earned around 84.5 pence for every £1 earned by men. Evidence shows that outcomes are often worse for women from Ethnic Minority backgrounds.
Current pay gap reporting doesn’t require organisations to gather any evidence beyond the binary gender divide – using male and female based statistics – which immediately excludes Trans and Nonbinary individuals, but it also fails to take an intersectional approach. We know that people are impacted differently, and often disproportionately, by their multifaceted identities. A disabled person will have less access to work than a nondisabled person – they shouldn’t, but the evidence says they do. Looking at pay gaps through an intersectional lens shows us how much worse it gets for people with various protected characteristics.
There are many reasons for Pay Gaps
Pay gaps are exacerbated by many issues including access to progression opportunities, women being overrepresented in part-time work, and both women and Ethnic Minority employees being over-represented in low paid work. Women are often overlooked for “skilled work” and often don’t apply for jobs that are seen as “stretch roles” – perpetuating the belief that men are more ambitious. Additionally, women often take on the majority of caregiving responsibilities, with many organisations not making adequate provisions for flexible working. Hopefully, companies will use the flexible working culture brought by the pandemic to change this.
Conclusion
Pay gap reporting alone cannot solve inequality in the workplace, it is only one of the tools needed to greatly improve equality in the workplace. The information presented within the pay gap reports will allow organisations to highlight key issues for their workforce, and enable them to create targeted interventions with clear and impactful outcomes.
When addressing Equality, Diversity and Inclusion, we need as much data as we can get, both quantitative and qualitative – only with both can we create effective solutions for each workplace.
Want to know more about gender and ethnic paygaps? Rachael and The Equal Group are delivering an On Point session in October. Click here to find out more about this and all our other training sessions.