Effect of Gender on Income: Gender Pay Gap in the UK

To what extent does gender impact on the level of income an individual can attain in the 21^st century?

Introduction

Many believe that in this 21^st century, gender impacts the level of income an individual can attain, especially women who it seems to be affecting the most. However, in the U.K the rate at which the gender pay gap is increasing is as of date one of the highest in the EU. Men earn 18.1% more than woman, in relation to the difference between gross hourly earnings.[1]Regardless of if the pay gap between men and women has begun to drop fairly intensely, over the past 30 years the major headlines continue to prevent the mass population from being aware of the negative direction the figures are moving in recent years. In the history of the UK there has always been progression from the previous generation of women. Nevertheless, the progress has lost momentum with the 21st century generation being only slightly than the previous one, these changes are no longer major advances which leaves the question, why? After taking on a very critical researching process, I have been made aware of many factors and traditions that demonstrate inequality in the level of income females make in comparison to males, this has also allowed me to develop my own opinion on the subject as well as looking into the research of professionals.

Through my research process I observed that the gap is dependent on the Working sector an individual decides to specialise in. The private sector employs workers through individual business owners, corporations or other nongovernment agencies, whereas the public sectors employment is controlled by the federal, state or local government. The percentage difference in median hourly earnings of fulltime employees within the public sector and private sector were 9.3% and 19.3% respectively. In addition to this women also earned 9.3% less than men in the public sector and 19.3% less in the Private sector.[2] This statistic go to show that the rate at which the gender wage gap differs is dependent on the working sector. As the private sectors gender wage gap is 0.7% more that of the public sectors, this suggests more women tend to apply for jobs within the public sector as the gender wage gap is at a lower percentage, however women are still faced with factors that hinder their progress in the ability to succeed in their career.

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The benefit of implementing a survey into me research is due to the fact surveys provide exact facts and figures that are of relevance to the my essay. What I aim to achieve upon writing this essay is first to investigate the possible causes and origins of the gender wage gap inequality through the analysis of the education system, stereotypes of women within the work place based on their career, and cultural values in the United Kingdom and amongst different economic systems worldwide relating to the pay gap. Finally, I will present solutions in relation to how the pay gap could be possibly eradicated in the near future.

Firstly, my essay will be focused on discrimination women encounter for example how they are perceived in senior roles due to the recent election of a female prime minister on the 13^th of July 2016.[3] In the second part I will discuss actions in which the government could take to create equality within all places of work, the state of mind of UK population and the European precautions in tackling the pay gap.

Why does the wage gap exist?

When this question is asked several reasons come to mind. However; professional researchers have developed a number of propositions in an attempt to explain the reason as to why the pay gap exists specifically in United Kingdom through the use of surveys and detailed reports. For example in the trade Union Congress (TUC) 2008 report, it explained the UK’s pay gap in terms of 4 main points: 36% of the pay gap could be explained by differences in lifetimes working patterns, including the fact that women, on average, spend less of their careers than men in full-time jobs, more in part-time jobs and have more interruptions to their careers for childcare and other family responsibilities. , 18 % is caused by labour market rigidities including gender segregation and the fact that women are more likely work for small firms and less likely to work in unionised firms, 38% is caused by direct discrimination and individuals careers preferences, and 8% is caused by the fact that older women had power educational attainment.[4]

While no single measure can capture the complete situation, meaning it is difficult to assign just one reason as to why the gender pay gap exists but Discrimination (the unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or sex.)[5] is the highest educated proposal, agreed upon by several professional research, in an attempt to explain the gender pay gap. A variety of sources have presented clear evidence and that specify recruitment and selection processes, are mostly where discrimination in the gender pay gap begins regardless of if the female has the required qualifications,  job stereotyping is presented. This maintains a negative industry image in which the men dominate the high-earning jobs and women the low-earning jobs. Moreover, it is important to emphasise that the pay gap between men and women is not only due to discrimination. In fact, C, Hakims (2004) argues that it is a scientific theory. Men and women have separate interest that they hold as of high importance in their lives and they are able to find their fulfilment through differ balance. In C, Hakims Work-lifestyle choices in the 21st century: preference theory (2000), “of 100 women, 20 are work centred, 20 are home centred and 60 are adaptive. And on 100 men 30 are adaptive, 60 are work centred and 10 are home centred.”[6] The Chartered Management Institute (CMI) published a survey that presented male managers were paid 12.2% more than females in 2007. This goes to show that with the same job, females are still paid much less than males. [7]

J. Shackleton a professor at the University of East London debates that in reality the pay gap hardly existed for workers under 30 “men work longer hours in more dangerous jobs and face a greater risk of being sacked, while women who take career breaks outnumber their makes equivalent by more than five to one[8]… female graduates tend to choose subjects such as psychology or education, which lead to lower-earning careers, while few opt for maths or engineering, which are more likely to result in lucrative jobs”[9]. T, Phillips created the following data to show the representation of women in certain jobs thereby supporting professor J.Shackleton argument:[10]

The report supports the fact that females are more likely to work in service occupations and males to work in management and skilled trades but majority of the occupations populated by female’s males still receive higher earnings than females. However the government have received several accusations by the women and work commission, in regards to the lack of support they are providing for females looking to pursue non-traditional jobs.

In addition the clarity of the job segregation is emphasized by the idea that women are still stereotyped into careers they should pursue. Stereotypes (A stereotype is a fixed, over generalized belief about a particular group or class of people)[11] are even present within certain household and sometimes could disrupt the happiness of a particular individual, for example, the division of household labour is based on gender in certain cultures and traditions, Women are five times more likely than men to be economically inactive mainly because they are looking after their family and home (Figure 2).[12] Traditionally in British history, white women in heterosexual couples remained at home and went about their day completing most of the domestic labour, while their male partners worked outside the home to provide the family income. Although tradition cannot be changed in a minimal space of time. C, Adichie in her book should we all be feminist? (2014) stated “Today, we live in a vastly different world. The person more qualified to lead is not the physically stronger person. It is the more intelligent, the more knowledgeable, and more creative, more innovative. And there are no hormones for those attributes. A man is as likely as a woman to be intelligent, innovative, and creative. We have evolved. But our ideas of gender have not involved very much.”[13]

Based on a global comparison the reason the UK pay gap exists at such a high rating is perhaps because a lot of women are at work. For example, Slovenia and Italy have a wage gap of 3.2% and 4.9% respectively, this Slovenia the best place in Europe for working women followed by Italy in  2008, on the other hand Women in Italy have a lower chance of acquiring a full-time jobs than men, with 31.8 percent of women working part-time compared to 7.4 percent of men. Female employees also see themselves in lower skilled jobs, with women holding 28 percent of managerial positions despite taking 42 percent of total employment.[14] The National Equality Panel was a study carried out by the government which stated that Women up to the age of 44 are better qualified than men but receive 21% lower wages.[15]

The work of women in UK is clearly under-valued when the stats are analysed. This undervaluation have two facets: females tend to be paid less than males for the same work, and the jobs that they do tend to attract lower wages then men's jobs. D. Grimshaw and J. Rubery of the Manchester Business School have developed "fives Vs"[16] in an attempt to create lower pay.

• The "Visibility", relating to the compression of a range of skills into a single group and the correspondingly limited opportunities for career progression.
• The "Valuation", which refers to the low value accorded to the skills involved.
• The "Vocation", the way that complex work is attributed to women’s “natural talents” rather than skills
• The "Value added", the comparatively low monetary value of the output; and finally
• The "Variance", the fact that women are over represented in part time employment which in the UK de facto(in fact) if not de jure(in law) confines them to a narrower range of sectors and occupations, where many experience downward occupational mobility and a much wider pay gap

Another cause of the gender pay gap is that women are more likely to work in part-time jobs, this then becomes an issue for women's income, as a survey done by the Statista in 2016 shows that, the average hourly wage for a full-time job was £13.59 and £8.88 for part-timers.[17][18]Moreover women also have more interruptions to their careers including factors which are part of their biological make up for example the ability to bear a child, this will require them to take a maternity leave putting their position at risk within certain companies. In 2015 alone 54,000 women lost their jobs due to maternity leave discrimination, It was also discovered that 10% of women were informed not to attend their antenatal appointments by their employers, putting their health along with that of their unborn child at risk.[19] Statutory Maternity Pay (SMP) is part of the law and organisations are obliged to abide, it ensures women are paid for up to 39 weeks:

• 90% of average weekly earnings (before tax) for the first 6 weeks
• £140.98 or 90% of your average weekly earnings (whichever is lower) for the next 33 weeks[20]

The 2007 Equalities Review by R. Berthoud and M. Blekesaune found that the three main kind of people who are at an economic disadvantage in acquiring a job are the physically and mentally disabled, as well as Pakistani and Bangladeshi women and mothers, although the rate at which disabled women are finding jobs did increase between 2014 to 2015 by 86,000(5.5%). This exemplifies the fact that more companies across the United Kingdom are appreciating the skills disabled people bring to the workplace.[21] In addition, despite if both a male and a female graduated from the same course with the same degree men tended to earn more than women, this makes the job searching process unnecessarily unfair for women.

In essence, women are more focused on the health and safety of their young, nevertheless the argument is that women are less competitive and more-risk averse than men, as a result they select lower-paid occupations. From a biological perspective the EEA (environment of evolutionary adaption) theory suggests that females would be less physically active in the hunting as it would be an evolutionary disadvantage for females – who spend long periods of time pregnant, breastfeeding and looking after offspring, to put themselves and children at risk by engaging in conflict. This had led to female playing roles solely based in the house and care taking for their offspring. Perhaps individuals are still following this evolutionary mind-set however “Culture does not make people. People make culture. If it is true that the full humanity of women is not our culture, then we can and must make it our culture.”[22]  

To summarise, organisations within the UK and on a global scale for example the European commission or the Government Equality Office of England, are making changes to reduce the pay gap significantly. Furthermore inequality is said to be the result of several factors that cause gender pay gap, despite the fact there is a continuous development in areas such as: women having the right to request flexible working, work commission remained "disappointed" in the lack of progress. [23]The way in which the vast majority are thinking are beginning to change as they take the time to educate themselves on the topic as well as try to keep up to date and informed. Different methods of staying informed are becoming available through the advancement in technology.

When it comes to equality in regards to the level of education Attained by males and female, there is a total of 17 countries, in which females have lower level outcome than men have in the attainment of education by 90% this is an improvement in comparison to the previous year, when females had lower level outcome than men in 22 countries.[24] Pakistani and Bangladeshi women are part of the lowest paid group in the UK, when compared to a White British male there is a major difference in the gender gap with a percentage of 26.2%, but when the gender gap is compared with a Pakistani and Bangladeshi male the gap reduced to just 5.5% creating a large gap of 20.7%, this suggests that Pakistani and Bangladeshi men are part of the high percentage of people that make up the low paid workers (Figure 1).[25] Chinese and White Irish women have made a great improvement in the gender pay gaps compared with White British men, while Pakistani and Bangladeshi women are still fighting for economic equality as they both have the widest gender gap in comparison to White British men. Although most groups see a narrowing in their gender pay gaps over time, some groups such as Black African women and White other women have seen the gap widen since the 2000s[26]

Eradicating the gender wage gap

Firstly, B, Jones (December 2009) suggests we need a greater transparency in the companies, within the UK with the availability of showing detailed job evaluations based on pay. However the UK is realising the importance of transparency because the GEO (Government Equalities Office) in its annual report of 2008/09 identifies plans to support transparency and equality. For example by putting together a team that deals with issues that will be faced as well as working closely with the EHRC, this will ensure the new legislation is easy to understand and accessible. [27] Jessica woodroffe, part-time Director of the Gender and Development Network said “the first step is for companies to carry out audits to ensure men and women performing work of similar skill levels should be paid the same. That is not too much to ask”[28]  The aim of an audit is to provide the financial statement of an organization in a clear and detailed manner to ensure an organisation is providing fair and accurate representation of the transactions they claim to represent.[29] This will contribute to the eradication of the gender wage gap because on an annual basis the government can analyse the audits of each individual company to ensure it is providing an equal pay for both men and women, if a company fail to do so or the information is fraudulent the directors will be liable to a fine dependant on the crime.

The equal pay act of 1970 aims to prohibit inequality in terms of pay and conditions of employment, any biased treatment between men and women is criticized as it fails to address the gap between ethnic minorities. The Equal Pay Act portrays the reduction of payment discrimination towards women as more awareness is being raised and individuals are taking the time to educate themselves on the matter at hand.[30]  In October 1999, the Equal Opportunities Commission (EOC) put together an Equal Pay Task Force which was chaired by Bob Mason. Whilst maintaining his role as the director of human resources planning at British Telecommunications; he was in charge of the equal pay task force which was created to explore and to close the gap between men and women by creating procedures that provide flexibility and training opportunities for both genders. In addition the Equal Pay Task Force report show that females who work full-time receive, 82% of the average hourly pay of male full-time employees including extra hours they have contributed to their place of work.[31] The Task Force believes that the pay gap is a result of discrimination, and could be reduced drastically by 50% within the next five years by following their 5 recommendations:[32]

• Awareness raising “to combat stereotypes in order to help women and men tap their full potential.”
• Modernising equal pay legislation “The Commission should encourage actions to address the stereotyping of educational and career choices in particular of young people, to help address occupational segregation. These actions have to target young people, parents, teachers, career advisors, employers, social partners and trainings”
• ensuring that employers and unions know how to implement equal pay reviews;
• enhancing transparency and developing accountability for delivering pay equality
• Amending social, economic and labour market policies to complement equal pay measures.

Further precautions that could be taken to minimise the extent at to which the pay gap is growing between men and women will be to implement laws that punish organisations which intentionally or unintentionally carry out gender based pay discrimination, by doing this, the UK will be strengthening its fight against prejudice behaviour within the corporate environment and overall challenging stereotypes directly; in addition, the removal of inflexible working hours for women with children and improvement of  access to sectors and jobs for both genders to which there is an unfair representation for example by putting in place a fair recruitment and selection process and finally enhancing lifelong opportunities for women in training and the gender difference in the pay gap will start the process of eradicating the gender pay gap. However the world economic forum report says: “More than a decade of data has revealed that progress is still too slow for realising the full potential of one half of humanity within our lifetimes.”[33] R, Samans and S, Zahidi, authors of the global gender report said they hope the report will “will serve as a call to action for governments to accelerate gender equality through bolder policymaking, to business to prioritise gender equality as a critical talent and moral imperative, and to all of us to become deeply conscious of the choices we make every day that impact gender equality globally”.[34]

In Europe, the countries with the best agenda to eradicate the gender pay gap is France and Sweden. Both countries implemented mandatory gender pay regulation. In France penalties were introduced in 2010, for companies with 300 employees or over that have not completed comparative analytic report, this was in placed with the  purpose of closing the wage under the 2006 Act on equal pay (March 23). The 2006 act also requires all organisations to negotiate on equality (including salaries), with measures as to how the organisation plans on eliminating the wage gap. This could reveal workplace procedures that could potentially be hindering women in their goals to reach the top in the cooperate ladder in their desired industry.

By increasing the minimum wage to 10 euro this would help close the gender pay gap for low-paid workers in the European Union countries. The 0.75 increase in the minimum wage will contribute to closing the gap. Raising the minimum wage from its current 9.25 euro is one of the main agendas of a party as mentioned in a paper presented, to focused on specific measures that support and uplift women would be budgeted for in the near future It said the step would be a "progressive mechanism" to close the gender pay gap, making it known that two out of every three minimum wage workers are women. "Be it access to social and affordable homes, tackling low pay, dealing with pension inequality or protecting women from domestic violence, the people need political leadership that will deliver the policies and necessary resources." Sinn Fein's an Irish Republican Party, are requesting for a living wage and an increase to income supports such as the family income supplement and carers allowance for those working within the civil service category. Mary Lou McDonald stated "Despite the progress of recent decades fundamental inequities remain for women and their families," "Sinn Fein has produced this budget 2018 document for women to highlight the alternative social and economic choices that can be made by government.” This highlights that gender inequality is still very present in a country such as Ireland but it is good to see that measures are being taken to bring an end to the wage gap through the increase of the minimum wage. This is just one of the strategies being put to work.[35]

Upon becoming the second female prime minister of the UK after Baroness Margaret Thatcher (Conservative 1979 to 1990)[36], Theresa May, in her first speech as Prime Minister made it known to the country that she will be tackling injustices and the fact that women earn on average less than men is one of her main agendas due to the fact a key part of building a society and a country that works for everyone is ensuring everyone as equal and fair opportunities to succeed in whatever industry there wish to strive towards.[37]

The Minister for Women and Equalities is taking action towards eradicating the gender pay gap through the launch of an interactive tool which inform all members of the public about the gender pay gap for their chosen occupation. Justine Greening, Minister for Women and Equalities, stated: ‘This tool will empower both men and women to challenge this issue in their profession and help people to make more informed decisions about their career’ According to the interactive tool, construction and building trades, financial managers and directors are the major occupations contributing to the gender pay gaps. The UK is taking precautions of this as from April 2017 employers running large firms are obliged to produce a report of their gender pay gaps.[38] This information is highly reliable has it was created by the government and the Office for National Statistics, who take into account a wide range of factors before providing the public with the information.

Before the European governments can be convinced to take clear actions regarding to the gender pay gap, there needs to be enough speculation on the matter, this was made known in the parliaments report, by managing the government's initiative for example increasing investments in women entrepreneurial seminars, the social partner initiatives e.g. starting campaigns that tackle stereotypes and promote women in managerial roles, and good practices initiatives this means by awarding companies with prizes or labels competition is created between companies resulting in all companies aiming to achieve gender equality. The gender pay gap would progressively disappear if all these initiates are put in place.[39]

Finally, the pay gap is a complex topic and is caused by a variety of factors; from the inequality of the traditional representation of women to the lack of support for mothers’ career progression and blatant discrimination with in the place of work. In 2015 professor of sociology at Harvard University Mary Brinton stated, “As a society we need to recognise the contributions that each individual male of female brings to the work force”

Conclusion

In conclusion, from the research and evidence that I have gathered and analysed, the gender of an individual plays a great role on the level of income they can obtain in the 21^st century. Gender and income inequality are linked as although we humans have evolved to become more accepting of women in a position of authority and power, thereby resulting in them attaining a high level of income, out thought processes are still similar to that of our ancestors where women would raise the children whilst the men of the family would go out to work acting as the breadwinners for their family providing for their needs. As this thought still exists even in the 21^st century and is embedded in some organisation’s too it acts as a hindrance as to the level of income an individual of a particular gender can attain. However, this depends on a few different factors and not gender. This is because in industries where the national minimum wage exists, both the females and males earn the same for the number of hours they work. Therefore, in this case the gender does not impact on the level of income they can obtain at all. So it could be argued where there are regulations in place such as the existence of the national minimum that it restricts the gender pay gap from widening. These are two contrasting views that are part of an on-going debate in society. In addition to this, there is also the fact that women tend to be in industries and jobs where even in the most senior role, the level of income that can be attained is not as high in comparison to male dominated industries and jobs. So again, this highlights the fact that gender and stereotypes associated with them impacts greatly on the level of income one individual can attain. However, with this being said, in the taxation industry women do earn 2% more than men do and people would assume that the taxation industry is more male dominated. From the studies we can see that discrimination based on ethnicity still needs to be tackled as it is causing problems for black and white other women (Figure 2)  as their wage gap compare to a white British male continues to widen. My essay has also highlighted the importance of supporting the Equality Acts enforced by the government, by doing so women begin to face less discrimination within their place of work and are provided with the right to equal employment opportunities. The essay brings clarity to problems faced by the women when they are paid less than their male co-workers. The discrimination of pay has negative impact on economic conditions. gender inequality also costs the global economy $12 trillion a year, if women were doing the same job for the same pay the economy could be growing at a faster rate on a yearly basis, resulting in constant progression in the economy.[40]  At the same time, the evidence and studies for the gender impacting the level of income an individual can obtain is far greater and therefore it leads to the conclusion that gender does play a part in the level of income an individual can attain in the 21^st century.

[1] Bovil, David. “Annual Survey of Hours and Earnings: 2016 provisional results.” Office for national statistics. 26 October 2016

[2] Stewart, B, Mark. “Why is the Gender Pay Gap Higher in the Private Sector?” University of Warwick. November 2014

[3] "PM-in-waiting Theresa May promises 'a better Britain'". BBC News. 11 July 2016. 18 April 2017.

[4] “Closing the gender pay gap” Trade Union Congress (TUC) 2008. Pg21

[5] https://en.oxforddictionaries.com/definition/discrimination

[6] Hakim, Catherine. “Work-lifestyle choices in the 21st century: preference theory.” 2000

[7] Clair, Marie. “gender pay gap is growing”. The Chartered Management Institute (CMI). December 12 2007.

[8] Khan, Urmee. “Pay gap between sexes based on ‘lifestyle’ choices” the telegraph. 21 October 2008

[9] Doughty, Steve. “women pay gap is blamed on lifestyle choice.” Daily mail. 21 October 2008

[10] Phillips, Tricia. “The top 10 highest paid jobs for women - here's the industries offering a better deal.” 8 July 2017

[11] McLeod, Saul. “stereotypes.” Simple psychology. Updated 2015

[12] Hankins, Martha & Tom Pollard et al “Disability and employment: a social model study of the employment experiences of disabled people in Great Britain, with a focus on mental illness” TUC. 2015

[13] Adichie, Chimamanda. “Should we all be feminists?” (2014)

[14] Scammell, Rosie. “Italy's gender pay gap getting worse.” The Local. 5 march 2016.

[15] “Report of the National Equality Panel: Executive summary.” Sticerd.lse. January 2010

[16] Perrons, Diane. “Women and Gender Equality in employment – patters, progress and challenges.” February 2009

[17] “Median hourly earnings for full-time employees (excluding overtime pay and hours) in the United Kingdom (UK) from 2006 to 2016 (in GBP)”. Statista. 2017

[18] “Median hourly earnings for part-time employees (excluding overtime pay and hours) in the United Kingdom (UK) from 2006 to 2016 (in GBP)”. Statista. 2017

[19] Chope, Christopher. “Maternity discrimination.” Westminster Hall – House of Commons Hansard. 15 March 2017

[20] “Statutory Maternity Pay and Leave: employer guide - Statutory Maternity Pay (SMP).” GOV.UK.

[21] Department for Work and Pensions The Rt Hon Mark Harper. “400 more disabled people in work every day.” 20 February 2015

[22] Adichie, Chimamanda. “We should all be feminist.” TED 2014

[23] “Gender pay gap” Authority of the House of Commons. 8 march 2016

[24] “Performance by subindex” Wold economic forum. 2016

[25] Breach, Anthony & Prof. Li, Yaojun. “Gender Pay Gap by Ethnicity in Britain.” Fawcett Society. March 2017

[26] “Many minority ethnic women ‘left behind’ by pay gap progress.” Fawcett Society. 6 March 2017.

[27] “Annual report and resource accounts 2008/09” Government equality reports. July 2009

[28] Doughty, Steve. “Women pay gap is blamed on lifestyle choice.” Daily mail. 21 October 2008

[29] “Audit.” Investopedia.

[30] Equality Working Groups (EWG). “The gender pay gap – a literature review.” New JNCHES. 22 February 2011

[31] Parker, Jane. “EOC urges new action on equal pay.” Eurofound. 27 April 2001

[32] Advisory committee “Opinion on The effectiveness of the current legal framework on Equal pay for equal work or work of equal value in tackling the gender pay gap.” Social Europe. June 2009.

[33] “the global gender gap report 2016.” World economic forum.

[34] Treanor, Jill. “Gender pay gap could take 170 years to close, says World Economic Forum.” The Guardian.25 October 2016.

[35] Independent_ie. “Minimum wage rise will narrow gender pay gap - Sinn Fein.” Breaking news Irish news. October 1 2017.

[36] “Past prime ministers.” Gov.Uk

[37] “Theresa May: First speech as Prime Minister - BBC News.” YouTube. 13 July 2016.

[38] Government equalities office. “New website reveals gender pay gap by profession.” Gov.UK. 9 December 2016.

[39] Ponzellini, M, Anna, Aumayr, Christine and Wolf, Felix. “Addressing the gender pay gap: Government and social partner actions.” Eurofound. 26 April 2010.

[40] McKinsey&Company. “The cost of gender inequality.” YouTube. March 7 2017.