67p is the new £1: Gender pay gap remains unaffected over past 25 years

December 16, 2021

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2 min read

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What's going on here?

The last 25 years have seen immense technological, cultural and societal shifts. The gender pay gap, on the other hand, remained stationary through it all. The Institute for Fiscal Studies has reported that the UK Government’s policies solved little to tackle this persistent problem.

What does this mean?

Despite over 1.9 million more women being in employment compared to a decade ago, reforms have failed to incentivise equal working grounds for both genders. In total earnings, the gender pay gap is nearly twice as big compared to other countries.

The study, which took account of over 2 million 20-55-year-olds between 1995 and 2019, found that in 2019, women earned 40% less a week and £3.10 less per hour than men. Furthermore, working-age women complete on average 1.8 more hours of unpaid work per day than men and 1.5 fewer hours of paid work. Co-author of the report, Alison Andrew, highlighted that the highest female earners make 67p for every £1 that the best-paid men earn.

What's the big picture effect?

In 2018, the UK government required UK companies with 250+ employees to report details of their pay gap in an attempt to make companies accountable and more aware of gender inequality. Evidently, this initiative did not provide the results it hoped for.

The gender pay gap is largely influenced by cultural and social norms as well as the policy environment. In the last years, educational attainment by women has been the main contributor in reducing the pay gap. Yet, once you put aside this factor, there has been little progress made in tackling gender inequality. This means that we cannot simply rely on women becoming more educated to close the gap. Instead, the UK  needs to accurately allocate talents of both genders to break past the gendered patterns of paid and unpaid work and start focusing on target policies to close the gap.

Women regularly take on the majority of unpaid work and become employed part-time due to frequently being the primary caregiver. This affects their wage growth and career progression in a negative way. A positive incentive which emerged from the pandemic has been the work-from-home campaign which allowed flexibility and cost-efficiency. However, with more employees heading back to offices, this may hurt womens’ careers disproportionately as online communication cannot replicate office networking which is important for recognition and advancement. Thus, the lack of initiatives towards enabling women to prosper in their careers whilst they engage in childcare contributes to the lack of movement in the gender pay gap.

Low gender pay gaps can be found in countries that put forward a combination of equality policies. For example, Switzerland passed a law mandating new fathers to take paternity leave to enable gender equality. The ‘Swiss Model’ can encourage other countries, like the UK, to really change social norms and start closing the pay gap. However, if countries don’t start now, women will continue remaining 33p behind.

Report written by Dominika Gaber

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