Move to gender pay gap reporting in the private sector is welcome but inadequate

David Cameron recently announced legislation that will require larger companies to publish their gender pay gap figure. Given that 45 years has passed since the equal pay act was introduced, this is to be welcomed. But the publishing of pay gaps alone will not realise David Cameron’s ambition to “end the gender pay gap within a generation”. What it is, though, is a small step towards addressing the disadvantage that women face at work every day.

Scotland’s gender pay gap, which is 12% for full-time workers and 32% for part-time workers, is underpinned by a range of factors, of which pay discrimination is but one. Women still do the bulk of unpaid caring, and inflexible working arrangements make it difficult for them to balance work with these family and caring responsibilities. After having children many women end up working below their skill level in the only part-time jobs that are available, which tend to be in undervalued, low-paid occupations like cleaning and retail. Cutting back their hours in this way has a long-term scarring effect on women’s incomes across their lifetimes, which affects not just pay, but also promotion prospects and ultimately their pension.

We still have quite rigid ideas about men’s and women’s capabilities and preferences, and these stereotypes contribute to women being clustered in lower grade jobs and in sectors with the poorest pay. Gender stereotyping begins at birth, with the rampant ‘pinkification’ of babywear and toys. All-pervasive, insidious messaging about girls’ and boys’ interests and abilities mean that by the time young people are choosing subjects at school, their own assumptions about gender and work are very fixed. This significantly contributes to the dearth of young women studying non-traditional subjects such as maths and physics. Of those who do, even fewer go on to work in well paid, non-traditional jobs such as engineering. Many of the women that do make it along the pipeline to the labour market later leave. Sometimes that’s because they find out they’re being paid less than their male colleagues - female graduates earn up to 28% less than their male counterparts, even if they studied the same degree subject. In other cases, they’ve been continually passed over for promotion, they’re not able to work flexibly once having children or they’ve felt the chill of a male-oriented workplace culture.

Most obviously, the gender pay gap is a problem for women because it is unjust. Individual women who experience discrimination based on their sex can seek redress from an employment tribunal. But that’s only if they can afford the fees of £1200, the introduction of which having precipitated a staggering 83% drop in equal pay claims and a 77% drop in sex discrimination claims.

There have been a number of high profile equal pay cases, most notably in local government where councils have scandalously spent millions of pounds of public money defending female employees’ equal pay claims. Birmingham City Council recently agreed to pay more than £1bn to settle the claims of thousands of women who have been waiting years for justice. In the private sector, both Asda and Sainsburys are now facing equal pay claims from female shopfloor workers.

But it’s not just women that are affected by the pay gap. Employers are missing out on the abundance of female talent as huge numbers of qualified and experienced women are working in jobs that are below their skill level. The business case for addressing the gender pay gap is well-rehearsed. Companies that promote gender equality are able to recruit from a wider pool of talent, enjoy a reduction in turnover and training costs, and experience increased productivity through improved employee motivation. Equalising women’s employment and productivity to the same levels as men’s could add £600bn to the UK economy.

The UK Government’s voluntary initiative Think, Act, Report, was widely seen as a failure when out of the 280 companies that signed up, only five published their pay gap. What this tells us is that voluntary initiatives don’t work. Companies may make positive noises about equality but that doesn’t necessarily translate into action to achieve it. Close the Gap’s research into employer action on equal pay showed that while 94% of those employers we surveyed had an equal pay policy, less than a third had undertaken an equal pay review, and only 3% had taken any action to address pay gaps.

And this is the crux of the issue. Publishing pay gaps is just small one step towards tackling women’s inequality at work. At the very least it will ensure that accountability in the private sector reflects accountability in the Scottish public sector, where public bodies already have to publish their pay gap. But employers need to look below the headline figure and identify why there are differences. The problem is wider than pay systems. Companies have look at the ways in which their workplace culture impacts on male and female employees differently, and then change their practices to ensure that that women are not disadvantaged. Until that’s done, it’s difficult to see how the pay gap will end in a generation.

Anna Ritchie Allan, Project Manager

This article originally appeared in the Sunday Times