The gender pay gap: what does it really mean to us?

This article was originally posted on MouthyMoney.co.uk on 7th September. It is reposted (with some slight expansion) with the permission of the website.

The gender pay gap is a complex beast. We know it exists – Patricia Arquette told us so in her Oscar speech! Although the idea of women being paid less than men is nothing new, it bubbled back to the surface a year or so ago when Jennifer Lawrence and fellow American Hustler Amy Adams revealed that they had been paid less than their male co-stars for the movie. Now, J-Law is by no means short of a pretty penny. The Academy’s sweetheart was named the highest paid actress in the world this year, getting paid $46m for her work, which incidentally is only *slightly* more than I get paid for this blog… That wage wedges her between number 5 and 6 in the men’s list – with Johnny ‘hand me the face paint and wigs’ Depp on $48m and Ben ‘Batfleck’ Affleck on $43m. What we see in Hollywood is inequality on a massive scale; women literally doing the same job, side by side with the men, and not getting paid the same. But the real world it a little more complicated than that. In fact, it’s very complicated indeed!

What is the gender pay gap and why am I suddenly hearing about it?

The gender pay gap is the average difference between men’s and women’s earnings. It can be caused by different factors: educational choices; position in the company; length of service; and hours worked for example. We still live in a society where some jobs (which tend to be lower paid) are seen as ‘women’s jobs’ – such as nursing, administration, child care etc. Other jobs are still seen as ‘men’s jobs’ – such as senior management, higher level medical (such as doctors), and jobs in the technical sector. Think about it this way – when people imagine an airline crew, they probably imagine a man will fly the plane while a lady serves the complimentary G&Ts. So if more women work in lower paid jobs, women as a group will earn less than men. It’s hit the news again recently as the Institute for Fiscal Studies (IFS) released a report on 23rd August with new findings about the situation in the UK today.

Does that mean Dave on my team is getting more than me?

Not necessarily – so there’s no need to lace Dave’s coffee with arsenic just yet… In 1970, the Equal Pay Act was introduced, which means legally women can’t be paid less than men for doing the same job. If Dave and Debbie are doing the same job, Dave and Debbie should be getting the same wage. But this is a slightly different issue to the gender pay gap – the pay gap looks at men as a group and women as a group, so overall in the UK women who work full time earn 13.9% less than men who work full time – even though individual women might be earning more than individual men.

So what impacts the gender groups?

It’s all about the figures. As I said earlier, the roles that are usually assigned to women tend to be lower paid. According to The Fawcett Society 80% of people working in low paid care and leisure sector are women, whereas less than 10% of UK Chief Executives in FTSE 100 companies are women. Even if all the women in the first 80% clubbed together, they probably couldn’t match the annual salary of one of the FTSE 100 execs. When you further take into account that in that group the actual number of women holding CEO roles is 6, that’s a lot less ladies pulling the earnings up for the whole group.

Another issue, a big issue, is that of family. Until we finally manage to convince the storks to bring the babies, if a woman chooses to be a mother, it’s going to require a bit of time off work. Sometimes, if things get complicated medically, (as they can when you’re growing a tiny human inside you) A LOT of time off work. Childcare is expensive too, so sometimes the only affordable option is for one parent to go part time, and either by choice or necessity, this is often Mummy. Now, of course part time staff get paid less than full time – they work less hours – but part time work often has limitations. There’s less opportunity for promotion, for example, and some companies don’t offer pay rises or bonuses to their part time workforce. Also, any substantial time off at all can mean that you fall behind in your particular sector, meaning that even if you come back full time and a better position comes up (promotion, hurrah!), your colleagues who haven’t been off for a year have more of a shot at getting the job. Add to that the fact a lot of companies insist their senior figures are full time, you’ve got a whole lot of reasons why women may find themselves in the lower end of the pay scale.

Should I be freaking out?

Probably not, unless you talk to your colleagues and the guys are getting paid more than the girls for doing exactly the same job. In that case, absolutely address it by booking a calm, professional meeting with the good folks in HR to discuss why this is the case. The pay gap appears to exist (somewhat) because of career choices rather than any form of conscious discrimination, which is one positive to take away. When something’s based on choice, there’s something that can be done. If you’re concerned, there’s no harm contacting your local MP to see how their party plans to address the issue – start the revolution from your inbox! You can also look up #pledgeforparity (a campaign that was run in line with the UN International Women’s Day) to see how the world is trying to move to a 50:50 split in higher paid roles. As far as you’re concerned, you can get your own house in order too. If you’re happy with the job you’ve got, great – stick with it! But if you want that promotion, work hard, be awesome, and get the job that helps you close the pay gap one step at a time.

I believe in you!

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