Kate Andrews

The problem with the gender pay gap obsession

The problem with the gender pay gap obsession
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Would we condone teaching a child that 1+1 = 3, for the sake of increasing her interest in maths? No. Would we praise flat earth theorists for getting people talking about the health of the planet? No. So why are we giving credence to meaningless and often deceptive gender pay gap statistics, which have us focusing on women’s issues in a way that is damaging to women? With Brexit-mania dominating our national debate, you may have missed that today is the deadline for large organisations to report their gender pay gap data.

Now into the second year of reporting, it has become increasingly clear that the influx of data from the gender pay gap reporting measures fails to provide any meaningful insight into fair pay for men and women in the workplace.

Today’s headline stats of 30 per cent, 40 per cent, even 50 per cent gender pay gaps are empty in context. The required calculations do not take any like-for-like comparisons into account – age, background, experience, education and degree level, and critically, type of job are not controlled for. These figures are comparing the pay of the company’s CEO to the junior researcher straight out of university.

The measures don’t even distinguish between full-time and part-time workers, which makes a huge difference to results. When the Office for National Statistics calculates the UK’s official pay gap, its breakdown of workers into full-time and part-time cuts the figure in half for the former (8.6 per cent in favour of men) and reveals a pay gap in favour of women for the latter (-4.4 per cent).

To highlight just how bad the reported data is, look at the accusations made against the National Health Service and its alleged gender pay gap. The public body has been flagged for its 23 per cent gender pay gap – a gap that increases to 33 per cent when just looking at GPs. But the majority of NHS professionals are on a national pay scale, almost completely removing questions of gender discrimination in wages, as they are not subjectively set by managers, but instead set irrespective of circumstance by the state.

Pay differences in the NHS are not about gendered pay gaps, but rather the number of hours worked by employees. Indeed, over 50 per cent of GPs are women, and they are more likely to work part-time. This is not rocket science, nor is it a conspiracy theory. It’s fairly simple stuff when the data is presented accurately. Unfortunately, the current legislation is not rooted in reason.

Spamming the public with misleading data causes real problems – especially for women who, if they read the headlines, are led to believe, regardless of their actions or work ethic, that they will never be compensated or promoted as men are. Supposedly the pay gap reporting is not meant to conflate the gender pay gap with the concept of equal pay – which, since 1970, has made it illegal to compensate men and women differently for the same work. But the way in which organisations have to word their reporting suggests strongly that women are paid less than men.

For example, the 2018 median hourly pay gap at ITV is 12.6 per cent in favour of men; this is expressed on the pay gap reporting official website as: “women earn 87p for every £1 that men earn,” based on average hourly wages.

I’m confident in my suggestion that their chief executive Dame Carolyn McCall is not earning a fraction of what her male co-workers earn at ITV; her salary is an estimated £900,000, and it is thought she will end up taking home more long-term pay than her male predecessor. 

The narrative that women ‘are paid less than men’ is categorically not true for many women in their respective organisation. Yet for some reason, this government (along with a host of activists, campaign groups and even organisational heads) are insistent on making women believe it is.

If we care at all about women in work, we must dramatically reform or scrap these pay gap reporting measurements, which incentivise employers to prioritise useless figures over organisational policies that actually benefit working women.

Kate Andrews is Associate Director at the Institute of Economic Affairs. Her briefing The Gender Pay Gap Reporting Measures: 2019 Update is out today