The gender wage gap of our generation
It’s a shocking fact that women will earn less than men during their lifetimes. The current gap stands at 13.9% for full-time workers. Yet, how seriously we should take this depends on what we view as the cause: the top contenders being variations in caring responsibilities, tendencies to take low-skilled employment, qualification disadvantages and the most famous, discrimination.
Discriminating against an employee on the grounds of gender or pregnancy is illegal and yet some women continue to receive lower pay than men. Research by the Fawcett Society finds that due to poor treatment following childbirth, 54,000 women are forced to leave their jobs annually. However, the overall pay gap has declined over the past twenty years (for all workers regardless of contract type or sector) from a 28% difference in hourly wages in 1993 to 18% today. When this is coupled with the passing of numerous protective laws, such as the Equal Pay Act (1970), the Sex Discrimination Act (1975) and more recently the Equality Acts of 2006 and 2010, it begs the question whether gender discrimination deserves as much attention as it once commanded. Rather, are women’s own choices, socially and academically, their Achilles heel?
An ONS report writes that amongst full-time workers men earn 9% more, but amongst part-timers women earn 6% more. Yet after adjusting for occupation and rank the gap measures as zero. It could therefore be concluded that variations in gender earnings are the result of women clustering in low-paid and part-time employment – not necessarily. An IFS report found that women do not experience an immediate decrease in hourly earnings after they reduce their hours. Instead, women working 20 hours or less per week miss out on promotion leading to that famous statistical disparity between full- and part-time workers. Furthermore, an analysis of the salary data of 60,000 UK managers and professions by the Chartered Management Institute found that in 2016, 14% of male managers were promoted against 10% of female managers. Indeed, pay analysts XpertHR (who carried out the research) identify the variance in promotion rates as a weighted cause of the gender pay gap.
However, due to the previously mentioned difference in career and life choices, does this promotion gap truly indicate that discrimination is still present – that the work carried out by women is undervalued? Claudia Goldin of Harvard University highlights the “belief […] that women are in bad occupations and if we just put them in better occupations, we would solve the gender pay problem”. Paula England of New York University adds “It’s not that women are always picking lesser things in terms of skill and importance. It’s just that the employers are deciding to pay it less”. This is supported by data from the US Bureau of Labor Statistics: the predominantly male janitor is paid $507 per week compared with $416 of the majority female maids, despite both jobs being equal in terms of task and qualifications required.
Such findings consequently make it fair to ask: are the career opportunities for part-time workers so poor because they are mostly women? The Chief Executive of the Fawcett Society, a campaign group, states that “We are wasting women’s skills and experience because of the way we structure our labour market. Part-time workers can be the most productive but become a career cul-de-sac for women from which they cannot recover”. Nevertheless, do women mind the “cul-de-sac”? A 2006 study interviewed 1,600 men and women, identified as teenagers as the top one per cent of mathematical ability, now middle-aged, as to what they wanted from their careers. The most popular answers for men were “high pay”, “risky work” and “merit pay”, whilst for women it was “working no more than 60 hours a week”, “working no more than 50 hours a week” and “working no more than 40 hours a week”. They were also asked how content they were with their current lives and careers and both cohorts reported similarly high levels of satisfaction. Could we therefore conclude that women’s own choices are to blame for the pay gap?
On the other hand, the unequal caring opportunities that arise from societal norms suggests that the desire of the study’s women to work fewer hours finds its origin in the domestic and profession responsibilities women find themselves juggling rather than a female instinct. In other words, the gender pay gap begins in society rather than in the workplace. According to research carried out by the European Union, across Europe 32% of women but only 8% of men work part-time. Additionally, although 89.1% of men with young children still work, this figure drops to only 65.8% for women. Differentials in caring responsibilities are not solely about children. Care for elderly relatives and domestic chores continue to be unequally borne by women.
A question mark is therefore poised as to how to solve a problem whose cause lies more in societal trappings than in tangible employment discrimination. The introduction of shared parental leave horrified equality campaigners since few families can afford for fathers to take it. Similarly proposed UK government legislation for firms to publish their pay gaps, although positive in terms of transparency, does not necessarily cancel the greatest cause of the pay gap – life choices and how society dictates those of women.
Free or cheaper child care would enable women who so wished to stay in full-time employment. This would in many ways have a multiplier effect on living standards as with two parents working full time, average family income would increase. The biggest change needed, however, is a shift in opinion and stereotypes across society. Such changes are usually slow and require changes in law but also require women to take full advantage of the changes. Indeed what is easily forgotten and yet essential to the solution is that women make up half of society: how is it possible that 50% of the world could be treated with discrimination? And what a powerful catalyst for change could they be if only they were completely unified?
As with all IEA publications, the views expressed are those of the authors and not those of the Institute (which has no corporate view), its managing trustees, Academic Advisory Council or senior staff.