1. What do the numbers show?
The U.K.’s two years of mandatory reporting showed a mean pay gap of 14.2% for the snapshot date of April 5, 2018. It suspended the exercise in 2020 for the pandemic and delayed it in 2021. The figure is a blunt measure of the gap between what men and women earn on average across the workforce, not like-for-like roles, so the data highlighted how women are under-represented in higher-paying jobs. Some critics called for the system to be scrapped, claiming the methodology is too crude and onerous on smaller firms. There are various ways to compile figures on the gender wage gap. In 2020, the International Labour Organization said the global mean hourly difference, adjusted for education and other factors, was about 16%.
2. Are other countries doing this?
Yes. Australia requires firms with more than 100 employees to report annually, collecting data on about 40% of the workforce (it reported an unadjusted gap of 13.4%). Germany, which has one of the worst pay gaps in Europe, implemented rules in 2018. But they only apply to companies with more than 200 staff and offer plenty of wiggle room, with one study showing the regulations were barely effective and not widely used. The EU has proposed broad, binding salary transparency legislation to help close a pay gap that saw women paid 14.1% less than men across the bloc in 2018, a figure that has barely budged over the past decade. Member states Austria, Sweden, Denmark and Finland already gather data, which may have helped close the gap, researchers say.
3. Why are women paid less?
The U.K.’s Office of National Statistics says the gap is partly caused by more women working part-time, clustering in occupations with lower pay and taking time out to have children. The discrepancy widens with age, and women’s salaries stop climbing at a younger age than those of male colleagues. The debate is colored by the disproportionate share of household work and childcare that tends to fall on women, meaning they are more likely to work part time or drop out of the workforce after having children. Nordic countries are often lauded for near economic parity, but they don’t have Europe’s narrowest pay gaps. Maternity leave or reduced hours also affects pension contributions, leading to a 30% pension gap in Europe.
4. What has happened in the pandemic?
The pandemic has had a disproportionate impact on women, who have suffered greater job losses than male counterparts. That’s partly because they’re more likely to work in service industries, which have been hit especially hard. And with many schools and daycare centers closed, many of the additional childcare responsibilities have fallen on women. Females lose skills when they leave the workforce, which results in lower pay when they return, according to an August 2020 research paper distributed by the U.S. National Bureau of Economic Research. An EU report warns that the pandemic has eroded hard-won achievements on equality, pointing to some countries -- such as Poland -- where women’s rights are under attack. Still there may be progress in some homes. The 2020 pandemic lockdowns in Europe did see men almost double the hours they spent on household tasks.
5. What’s being done to address the issue?
Supporters of greater equality say transparency on wage data is key to addressing discrepancies and monitoring results. It could also provide ammunition for legal action. The EU proposal would prevent prospective employers from quizzing candidates on their current earnings. The rule -- meant to prevent a new hire from being locked into a rate that might be unfairly low due to discrimination by prior employers -- is already in place in at least 13 U.S. states. German law gives workers the right to compare their pay with up to six colleagues of the opposite sex who have the same job, though its scope is limited. In January, U.S. lawmakers reintroduced legislation to guarantee women and men are paid equally for the same jobs, one of several gender equity efforts backed by President Joe Biden.
6. How far are we from ‘equal pay for equal work’?
That’s hard to say. The phrase refers to the idea that men and women doing the same job at the same company should receive the same salary. Most disclosures -- including the pay data reported by British employers -- don’t provide such comparisons. Reporting on an “adjusted basis” -- taking into account job title, seniority, location and other factors -- is more complicated. That method is more popular among U.S. companies, some of which have disclosed their figures under pressure from activist shareholders. Even so, in January, Citigroup Inc., one of the few companies to disclose an unadjusted pay gap, said female employees make 26% less than males, an improvement from 27% a year ago. Citigroup and many of the bank’s competitors also offer an adjusted figure, and on that basis, women globally are paid on average more than 99% of what men are paid at Citigroup.
7. What’s been the reaction to the U.K. data?
Results from the U.K.’s debut survey in 2018 produced widespread criticism and came amid an uproar over how women were paid at the BBC, Britain’s publicly funded broadcaster. Annual reporting is building greater awareness and could help women negotiate higher wages, researchers say. In particular, there’s a focus on the lack of women in more senior, and thus well-compensated, positions. That means plans in place to fix the problem will take time -- building a pipeline of senior female employees can mean hiring more women at all levels. The unadjusted gender pay gap at HSBC Bank Plc, the U.K.’s biggest lender, got worse after the first year of reporting, widening to a mean 61%. The bank’s most recent data was published voluntarily and shows the disparity narrowed to 54% in 2020, with the share of women in the top pay quartile at fewer than one in 10.
Read more: Click here to see a graphic on the U.K. pay data
8. At what point does a wage gap violate the law?
That remains to be seen. Data gathered in the U.K. or the EU could provide fodder for existing or future lawsuits under equality legislation. In those places, women and men have the legal right to equal pay for equal work, and there’s a framework for comparing jobs by effort, skill or decision making. In early 2019, thousands of women employed by Glasgow City Council in Scotland reached a financial agreement over pay discrimination after fighting for more than a decade and staging what was believed to be the U.K.’s biggest-ever strike over equal wages. Tesco Plc, Britan’s largest retailer, is facing claims from thousands of female shop workers that they have also been denied equal pay to their mostly-male colleagues in warehouses and distribution centers.
9. What prompted politicians to disclose the pay gap?
Ursula von der Leyen, the EU’s first female commission president, made gender equality a priority when she started work in 2019, calling for EU governments to nominate more female politicians to her staff. Eliminating gender pay differences in the U.K. could add 150 billion pounds ($207 billion) to its annual gross domestic product by 2025, by boosting female participation in the workforce, encouraging women to work longer hours and moving them into more productive jobs, such as those in science and engineering, according to a 2016 study by McKinsey & Co. The U.K. is also considering mandatory pay reporting by ethnicity to expose the pay gap for citizens of “Black, Asian and minority ethnic,” or “BAME,” origin. A public consultation ended in January 2019 and some firms, such as Deloitte, KPMG and broadcaster ITN, have already released their numbers.
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