The gender pay gap is getting worse, not better

Reported figures are showing that big firms have an issue with the gender pay gap. Though the median figure for all reported companies has improved from last year, according to BBC analysis, the gender pay gap still stands at 8.4%. Major companies such as Lloyds Bank, Royal Bank of Scotland and PwC are amongst some of the biggest offenders in the private sector. But what is the gender pay gap, and why has it been so slow to close?

Since 2017, companies, charities and public sector organisations with over 250 employees have had to report data on the state of the gender pay gap under changes to the Equality Act. Data from the 2018 snapshot highlighted that men earned more than women in 7,795 out of the 10,016 bodies in business. This trend doesn’t seem to be moving much, with less than 1% change from 2018 to 2019 figures (at least of those reported so far). However, we’ve come a long way from the days of unequal pay for the same work, and figures as late as 1997 that set the pay gap at 17.4%.

Data from the 2018 snapshot highlighted that men earned more than women in 7,795 out of the 10,016 bodies in business

These figures are worrying to see – 100 years on from women being given the vote, it would seem the strides we claim to have made may not be accurate. The gender pay gap is, arguably, one of the most relevant issues in political economy. On its surface, it reflects the difference in hourly rates between men and women, but even the use of statistics can hide deeper routed issues for women in the labour market.

According to data from the Office of National Statistics (ONS), if part-time work is included then the gap can reach reported levels for 1997 in the present day. Women’s earning potential also decreases after the age of 30, highlighting the problems of perceived capacity for working in child-bearing-aged women. The gender pay gap is not as straightforward as government data snapshots and self-reporting provide. Age, class and race all play a role in depressing the earnings of women over a lifetime.

The gender pay gap is also not an issue isolated to middle earners. The lowest end of the income distribution is dominated by women, with many stuck in low pay, part-time work with little social status. Equally, women at the top of the economy are struggling to break through the male dominated field. Easymoney projected that the gap between males and females earning over £100,000 won’t close for another 36 years.

Reporting the gender pay gap in various bodies does not seem to be doing much to name and shame those who are the worst offenders and change their behaviour

Part of the challenge with the gender pay gap comes from closing it. Reporting the gender pay gap in various bodies does not seem to be doing much to name and shame those who are the worst offenders and change their behaviour. It seems to have little impact on the conduct of businesses, seen in the example of Kwik Fit, one of many companies who are required to report. Last year, they had a pay gap in favour of women, but due to resignations at the top of the company, it now has a pay gap of 14% in favour of men. This is the exact kind of reversal that the legislative changes were supposed to avoid.

It cannot be said that all our issues with gender equality will be solved when CEO positions are equally shared between men and women, but addressing the structural barriers to women’s advancement in the workplace is vital if the government – or, indeed, anyone – wishes to address the gender pay gap.