Mind the pay gap: creating a fairer Britain

by Caroline Waters

Published: 15 Aug 2017

In July, the BBC was quite rightly thrown into a sandstorm when it published the salaries of its on-air talent, revealing that two-thirds of those earning over £150,000 are men. It once again prompted uncomfortable conversations about why women earn less for doing the same job as men (equal pay) and why women seem to experience a lower average hourly rate than men across a range of roles (the gender pay gap). 

Calls for gender pay gaps to be reduced – not least eliminated – are at their loudest ever, yet clearly we still have a long way to go to overcome the barriers to achieving pay equality.

Today the Commission publishes the findings of its most substantial report into pay gaps. This not only builds on its previous research on pay gaps for women but also examines the situation for ethnic minorities and disabled people. It shows that women, certain ethnic minorities, and disabled people are still finding themselves in lower-paid, lower-skilled occupations with little mobility into senior positions. Women continue to experience a pay penalty when it comes to having and raising children, with many needing to take a break from the full-time labour market to care for them. The employment rate for disabled men is almost a third below that of non-disabled men, and Pakistani and Bangladeshi immigrant women continually find themselves in low-paid employment.

Progressive steps are being taken by the UK, Scottish and Welsh Governments to address this imbalance. As we’ve seen with the BBC, transparency is a critical ally, with pay gap reporting beginning to fuel some uncomfortable but necessary conversations.

Creating better, more flexible career prospects for women, ethnic minorities and disabled people will also help reduce pay inequalities but it won’t happen without fairness in recruitment, promotion and pay decisions. We need much more than a numerical shift. Focusing solely on the headline numbers and using these to judge an employer’s commitment to equality and diversity is the wrong measure and may lead to decisions that act against the long-term interests of women. For example, outsourcing lower-paid roles such as cleaning may reduce the pay gap figure but can lead to poorer working conditions for the women who predominate in this industry. As most promotees start on lower pay than their more experienced colleagues, simply not promoting people with protected characteristics may lower the pay gap but it’s hardly the right thing to do!

Tackling inequality in the workplace requires a comprehensive understanding of the deep-rooted attitudes and biases that have contributed to how women, ethnic minorities and disabled people are treated at work. To complement the research published today, we have launched our first pay gaps strategy which sets out concrete actions to challenge the status quo and achieve change. One of our recommendations is to encourage young girls to raise their aspirations and improve their prospects of gaining higher-paid jobs by choosing subjects and careers beyond those bound by expected gender conventions. It’s hardly rocket science, it’s not new, but when it happens it changes life chances for generations.

Another is for employers to advertise all jobs at all levels with flexible working options. It is unfortunate that a woman’s ability to choose a job that reflects her skills is influenced by the effect it can have on other fundamental aspects of her life – career versus family being the most common trade-off. Redressing this opportunity cost requires governments and organisations to work together to encourage policies that help men play a more active role in bringing up their children. The desire is there; the incentive isn’t. How can society continue to deny women careers, and children access to their fathers for the sake of a little flexibility that actually makes most organisations more productive?

In June I wrote about the strong appetite that exists for fathers to work more flexibly in the workplace (LinkedIn) and share child care responsibilities more equally. A combination of lower relative earnings for men while on paternity leave, expensive child care, and a culture that sees fathers less willing to ask for flexible working, repeatedly shifts the onus onto mothers as the primary carers. They subsequently deprioritise their careers, at least for a few months.     

Starting to move this outdated narrative could be as simple as improving paternal entitlements for fathers. We are recommending that the UK government introduces 'use it or lose it' parental leave for dads that replaces a significant amount of their lost income and offers fathers’ leave as an add-on to mothers’ leave. This will provide additional support for the family rather than eating into mothers’ entitlement. 

Making greater strides in reducing gender, ethnicity and disability pay gaps is fundamental in creating a fairer Britain. It also makes good business sense: reducing the gender gap could add £600 million a year to the economy by 2025; increasing participation of ethnic minorities at work could add £24 billion; and halving the disability employment gap could significantly reduce the £9 billion employers lose per year on costs associated with sickness absence pay. We want government and employers to put this at the top of their agenda and we look forward to working with them to implement the recommendations in our strategy. After all, what price would you put on doing the right thing?