How coronavirus is widening the UK gender pay gap
Who would have predicted that on the 50th anniversary of the Equal Pay Act, British women would be back in the home, up to their ears in dishes, dinners and nappies, watching their careers evaporate as the pay gap widens? The coronavirus pandemic could set women’s economic progress back half a century, according to warnings from international institutions including the UN and the World Economic Forum. In the downturn, the economic constraints that women around the world typically bear – from industry segregation to unequal access to capital – are painfully visible.
At the centre of women’s predicament is the expectation that they will sacrifice their own economic viability to provide care at home. The burden of care is the single biggest barrier to women’s economic participation everywhere in the world, whether in employment or business ownership. Because UK childcare is already more expensive than in most western nations, the percentage of part-time employment among working women – about 40% – was very high before Covid-19. Since women worked fewer hours in jobs that paid less per hour, limited childcare options had a direct effect on unequal pay. As three-quarters of the parttime labour force, women were hit hard when part-time jobs fell 70% in the first 11 weeks of the pandemic. When schools and daycare centres shut down to stem the spread of the virus, women across all industries and occupations saw the support most critical to their employment disappear.
One female-dominated sector did not close: healthcare, where 79% of the workers are women. Apologists for women’s inequality in the labour force often rely on the canard that men are paid more because they do more dangerous and important work. Fighting a contagious and potentially deadly virus surely counts as dangerous and important, and most of the faces on the frontlines of this crisis are female. Yet, even in health care, women are paid less. And, even in a pandemic, health workers have to worry about childcare.
Clustering of women in low-paying industries produces a significant part of the gender pay gap. These industries often echo traditional roles – with jobs that include some form of care or teaching, or have a connection with food or clothing.
The “motherhood penalty”, another significant contributor to the pay gap, describes a well documented phenomenon: employers’ propensity to deny women pay increases, promotions and important assignments – or to single them out for cutbacks or layoffs. The fallout from the pandemic has been brutal for mothers, who have been 47% more likely to lose their jobs than fathers, according to another study by the Insititute of Fiscal Studies. Mothers also are more likely to be furloughed and their hours have been cut back 50% more.
The way things are playing out at home, however, is what makes observers worry most. Even before the coronavirus crisis, data from the Organisation for Economic Cooperation and Development (OECD) showed British women did almost twice the work at home that men did. Though British fathers are picking up more household responsibilities than they did before the outbreak, an acute inequality has nevertheless emerged between parents during the shutdown. Mothers are putting in four more hours a day than fathers are in caring for children and home.
Among those doing paid work at home, mothers are more likely to be trying to work while simultaneously trying to care for children. Mothers are considerably more likely to have their efforts to do paid work interrupted by children. The only situation in which parents are splitting home responsibilities equally is when the man has lost his job entirely and the woman is still working.
Part-time work, the caring stereotype, the motherhood penalty and slow career advancement contribute to the continuing problem of unequal pay. These points of difference are all ultimately attributable to a social view that places all the burdens of home on women and can’t be merely chalked up to free choice. To date, the pat solution offered, especially by the British government, has been remote working. But as became evident to everyone during lockdown, it is impossible to balance full-time childcare while doing a full-time job at home.
As lockdown ends, daycare centres and schools are opening under very different operating procedures. The precarious position of childcare suppliers demands special assistance in recovery planning because of the knock-on effects for the nation’s female workers. But will they get it?
In Europe and North America, working women contribute between 35% and 45% of their country’s GDP. Countries that plan economic recovery without truly taking the realities of women’s economic position into account are setting themselves up for failure. Such errors and oversights are part of a historical pattern, and the UK is a prime illustration of how these attitudes and practices have come about.
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About four years ago, the British government did something extraordinary, by stipulating that all businesses with more than 250 employees would soon be required to reveal their gender pay gap online. When the first tranche of data appeared on the government’s searchable website in 2018, the controversy was immediate and intense.
There, for all to behold, was a consistent pattern of inequality among some 15 million employees. Across companies and industries, there were gender gaps in pay, some of them huge. And women were severely under-represented in the top quartile – the best-paid jobs.
“The concept of extreme pay disparities in City finance is not particularly new, but what is arresting about the site is the way it offers an X-ray of the inner workings of diverse organisations from universities to meat-packing businesses, government departments to high-street fashion retailers, sewage companies to the Ritz,” Amelia Gentleman wrote in the Guardian. “Companies are stripped naked … and attitudes towards women are revealed with uncomfortable clarity.”
Of all the companies, airlines and banks were the worst offenders. The airlines had men flying planes and women serving drinks, with the former paid very well and the latter paid rather poorly. As an example, 94% of the pilots at easyJet were male, compensated at £92,400 on average. Flight attendants were 69% female, compensated at an average of £24,800. The airlines seemed to think this gender split was perfectly normal. Had they been asleep in the cockpit since the Equal Pay Act of 1970?
British women have been educated equally to men for decades. There are currently about a third more women than men in higher education – and that is not breaking news. British women take more places at university, get better grades, graduate at higher rates and go on to postgraduate work more often than men. Despite these wide advantages in their credentials, the government, the press and businesses persistently suggest that women should have more training so they can get the big jobs.
In the aftermath of the equal pay revelations, corporate spokespeople seemed unaware that British women had outstripped men in terms of their qualifications. For instance, the managing partner for talent at Deloitte (which posted a 43% gender pay gap) complained that progress at an accounting firm like theirs would not happen in a flash. “For us, you can’t just magic up a load of senior women and plonk them into our organisation. We need to make sure that we enable our women to progress,” she said. “I frequently say this is for us a 10-year journey.” Deloitte had already had 50 years to create a level playing field – now they wanted a 10-year extension?
Company representatives trying to defend the gender pay gap in 2018 also spent a lot of time mansplaining the limits of the government’s reporting requirements to outraged women. They complained that the government’s method of calculating the pay gap was too simplistic to reflect the complexity of their payrolls. The truth was that the “simplistic” formula, while making all businesses’ numbers comparable and keeping the reporting burden to a minimum, did not allow employers to massage the pay gap out of their numbers. In a story headlined “New Numbers Show the Gender Pay Gap Is Real”, Bloomberg Businessweek explained: “The rigid [UK government] approach leaves companies nowhere to hide, no statistical mechanism to cover up their failure to mentor women, no rhetorical way around the fact that their higher-paid divisions are largely male.”
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Controversy over the right way to calculate the gender pay gap has haunted the effort to advance gender equality. The World Economic Forum, the EU and the OECD have published estimates of the gender pay gap in the UK that range from 18% to 45%. It depends on what source they use and how they calculate the gap, but the unavoidable fact is that they all show a big difference. Even within the same industry or the same occupation, even when working hours are matched, women are paid less than men.
However, some economists pursue an ideological agenda by “controlling variables” in national data sets until the gap in pay between men and women disappears. They conclude that if women made the same smart choices as men – especially avoiding responsibility for children – there would be equal pay. They then put the studies out to the media, who gleefully tout the news until everyone has heard something about the gender gap being a fiction.
You can make any statistical effect disappear if you control for the right variables. These analysts control for terms such as “works part-time”, “works from home”, and “works in healthcare, education or retail”, which describe women so much more often than men that they’re really just another way of saying “female”. When analysts control for these factors, they have not discovered that the pay gap is a fiction. What their manipulated data really says is: women were paid the same as men once we removed all the factors that enforce and reflect gender bias in the workplace.
Three statistical “explanations” drive the gender pay gap: clustering in female-dominant industries, reduced pay among mothers and a lack of advancement. But a statistical explanation does not provide a reason for the pattern in a dataset, nor does it offer justification; it only tells where in the sample the biggest differences are found. Unfortunately, people often project their own prejudices when interpreting the statistical explanation. With these differences, for instance, you could say that the gender gap is explained by employers pushing women into low-paying industries, blocking female advancement and penalising mothers. In 2018, however, most pundits, HR managers and government servants blamed the women for having children, choosing to work in all the wrong places, and, in one way or another, not trying hard enough.
The 2020 pattern of industry segregation is the same in Britain as it was 50 years ago – women are clustered in care, education and service. The data released in 2018 showed, however, that all industries paid women less than men. Pay equality by occupation is no better: women are paid less in every job.
If, in the aggregate, women are more qualified but not getting promoted, then widespread sex discrimination must be happening, and consistently. That is the only way to reconcile those facts. So where are the lawsuits? The BBC looked at court statistics at that time, expecting to find masses of equal pay lawsuits clogging the employment tribunals, but was surprised to learn that not a single equal pay case had been decided since 2010. Not one.
The UK’s Equal Pay Act of 1970 contained a provision that there could be no different treatment of one sex versus the other. This rule against “positive discrimination”, as it is called, has stood in the way of gender equality ever since. On this matter, British law – and the attitudes of many in Britain – contrasts with that of many other countries in Europe and North America, where positive discrimination is widely seen as a step towards equality.
The UK’s 1970 rule against positive discrimination did not recognise the inequalities that already existed between men and women, nor that past discrimination had created a massive heap of male advantage, nor that women suffered as a result of attitudes that were tightly integrated into the social structure. It also failed to acknowledge that sex discrimination is an ongoing process by which one sex uses its advantages to disadvantage the other. In the face of the scandal of 2018’s gender pay gap revelations, the positive discrimination rule made the law blind to the facts at hand: women were working in areas of traditionally “women’s work”, old cultural attitudes toward mothers were freezing them out of the economy, and the men who made decisions about career advancement had the power to hold back women.
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Under the positive discrimination doctrine, two people working in the same role must be paid equally, which is clear enough. If an employer was choosing whether to hire or promote an equally qualified man and woman, either choice could theoretically invite a lawsuit for sex discrimination, but as personnel practices evolved, men could get jobs and promotions if they were only equally qualified to the women applying, but a woman had to be clear
ly superior to all the male applicants to win.
This structural flaw in British law is compounded by issues of enforcement. If an employer underpays a woman and refuses to change, the only way the disparity can be resolved is for her to sue. The court process can take more than a year and easily cost the complainant more than £100,000, but the most a woman can win is six years’ back pay, plus other damages that are capped at inconsequential levels. Unless her salary is very high, it is unlikely that the back pay will even cover her legal costs – and British courts hardly ever make the guilty employer pay the plaintiff’s legal fees for getting what she should have had in the first place. By contrast, the law does provide that if the court and the employer think the complaint unworthy, the judge can order the employee to pay the employer’s legal costs as well as her own.
The risks of pursuing an equality claim thus vastly outweigh the possible benefits. The employer’s risk is so minimal that it makes economic sense to pay women lower salaries and bet that nothing will ever come of it.
Another excuse voiced during the 2018 scandal was that women were paid less because they are poorer negotiators. In 2007, in a book called Women Don’t Ask: The High Cost of Avoiding Negotiation – and Positive Strategies for Change, by Linda Babcock and Sara Laschever, it was said that women get paid less because, unlike men, they don’t negotiate for more money. The authors’ solution was simple: women should “man up” and ask for pay increases. Subsequent studies showed, however, that there is a good reason women do not try to negotiate higher salaries: those who do tend to get punished. Asking for money is seen as inappropriate behaviour for women, as is the assertion of one’s own value that must underlie the request. One muchhyped study argued that women could win salary negotiations if they asked nicely enough, but that was disproved by still more studies. Turns out, if you are a woman, you can’t ask nicely enough. Most women already know that. Which is why they don’t ask.
A decision to withhold a job or promotion because a woman asked for more money is hard to pass off as unconscious bias, but employers consistently shirk responsibility by claiming they are unaware of their prejudices.
Labelling all discrimination as “unconscious bias” only provides cover for those who are consciously biased to continue in unrepentant acts of prejudice. Unsurprisingly, little of the reporting on the 2018 scandal considered that the men who make promotion decisions might deserve some of the blame.
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Young couples in the UK do not want to live in single-breadwinner families; and mothers would prefer to work full-time. But because childcare is so expensive, young families are forced to have one adult remain at home – and it’s nearly always the woman. These women end up staying out of the workforce for a long time, and when they return, their careers resume in a lesser role at lower pay.
A 2019 study of six countries – the UK, the US, Sweden, Denmark, Austria and Germany – shows that average pay for mothers takes a dip immediately after the first child is born and then never recovers, even after a decade. At the end, when you account for both salary history and reduced working hours, British mothers have absorbed a net 40% drop in pay, which is similar to what happens in the US. Scandinavian countries have the most liberal parental policies, including generous leave for fathers and sponsored childcare; in Denmark and Sweden, mothers’ pay nevertheless ends up, after a decade, down by about 21% and 26%, respectively. Germany and Austria, with long maternity leaves but virtually no care for children under three, are the worst. Mothers’ pay drops by 80% immediately after birth, and is still down after 10 years by 61% in Germany and by 51% in Austria.
Women all across the west still struggle against bosses who want to push them back into the kitchen by punishing motherhood at work until they give up and go home. Governments have either ignored working mothers’ needs or blocked them with outdated policies. Employers are given a pass for paying mothers less, even though they are lining their own pockets with money their employees’ families need for children.
Living costs in the rich nations, and especially in the cities where 80% of the population resides, are too high for new parents to live on one income. Mothers must work, and yet working mothers are penalised and stigmatised by employers. Families who try to survive on one income while the children are young endure years of financial stress and are unable to save for the future. Some mothers try to earn money and “stay in the game” by working part-time, but theirs is not a freely made choice – where data exists, it shows that an overwhelming majority of stay-at-home and part-time working mothers in rich nations would prefer to work full-time. Their governments ignore them as if it were still 1970.
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Increasingly, women are opting out of having children, leading directly to a crisis of epic proportions: ageing populations. About half the countries in the world are in danger of soon having too few births to sustain their populations, including Britain and most of Europe.
The ageing crisis of the coming decades will not affect citizens selectively. The impact will hit each and every individual, and it will be painful. A mushrooming number of old people will require more social services. Tax revenue will decline because fewer people will be economically active. There will not be enough labour supply to sustain growth.
Inevitably, a care crisis will arrive, with elderly people competing with children for a larger share of care, attention and spending. Each woman will probably be expected to care for up to four old people – her parents and her partner’s – as well as any children still at home. Many women will be forced to stop working, further depressing growth, taxes, livelihoods and female spirits. The responsibility for maintaining income will fall on one partner, usually a male, who will have to support his immediate family and supplement the resources of the older people. His pay cheque will be squeezed to accommodate higher government spending on social services. The Covid-19 scenario is giving us a preview of what that future will be like.
Ordinary British families pay the price for the government’s outdated attitudes and the bad faith of employers. The 2018 figures showed British women losing £140bn a year in pay due to the gender gap, an average of £9,112 a year per person or household. To most UK families, that amount represents a significant loss of income.
Yet in 2018’s sharp focus on pay, no one thought to hold the government accountable. Britain sacrifices about £123bn a year because of lost productivity associated with unequal compensation. The nation wastes its investment in educating women – because it is determined to throw the most qualified segment of the population under the bus. This country puts its future prosperity and social safety on the line rather than accommodate young mothers who want to work. Why does this blinkered behaviour persist?
A 2009 study by the European commission looked at the equal pay results achieved by the EU member countries as well as Canada, South Africa and the US. It found that, after nearly five decades, each nation had failed to protect the employment rights of half their citizens. The fatal flaw in the equality procedures, they said, was that the burden of enforcement had been placed on individual women, who bore the cost and risk of lawsuits unlikely to be decided in their favour. Women had lost confidence in the judiciary entirely, and neither unions nor governments had the will to do anything about the situation. Employers had skulked through the end of the 20th century discriminating with impunity.
Two years after Britain’s gender pay gap was publicly exposed, there has been no significant improvement. The government’s strategy of naming and shaming employers has not worked – after all, why be embarrassed when you know everyone else is doing it, especially when there will be no consequences to suffer?
The UK equality system as it stands has produced few women at the top, large pay gaps, complacent employers and a shocked public. A radical shift in the mechanisms supporting equality will be necessary if this situation is ever to change.
All the headlines that say it will take 50, 100, even 200 years to achieve equal pay are wrong. This is not a slow, automatic process; it’s a long push against entrenched resistance. Women are not paid less because they are less educated, less motivated, less ambitious, less willing to ask for more money, weaker, more cowardly, lazier, meant to be stay-at-home mothers, or any of the hundreds of “blame the women” excuses that popular culture spits out. They are paid less because hostile men, and the institutions they create, keep finding ways to frustrate gender equality.
In the face of a crisis, these institutions, and the men who lead them, continue to foster gender inequality. They continue their stubborn inattention to the confluence of women’s economic disadvantages and women’s future economic viability. This time, the systemic biases they perpetuate will hurt Britain as a whole.
The Double X Economy: the Epic Potential of Empowering Women by Linda Scott is published by Faber and available atguardianbookshop.com