Gender Pay Gap Update
The 5th of April 2018 marked the deadline for large companies to publish their mean and median gender pay gaps. This new transparency – the first of its kind in the world – has unveiled some surprising issues concerning the inequality of men and women.
Creditfix has compiled its own report, which showed that our female employees are paid, on average, 2% less than their male counterparts per hour. This gap is 7.1% smaller than the national average (9.1%), and far below average for the traditionally male-dominated financial sector. Many financial firms have, disappointingly, reported average gaps of 40% or more. Although we are proud of our low gender pay gap, we are aware of the dangers of complacency. We will continue to work our way towards completely equal pay, by consistently monitoring wages to ensure that no biases emerge, and exploring how we can continue to attract women to the company and support them.
What causes the Gender Pay Gap?
Since the Equal Pay Act of 1970, it has been illegal to pay men and women differently for carrying out the same work, so why do women working in the UK continue to be paid less than men across every sector? Unfortunately there is no simple answer to this question, but the Office for National Statistics (ONS) has uncovered some key factors. First of all, women are much more likely than men to be employed in part-time jobs, which generally pay less than full-time positions. This difference is most notable for people aged 40-49. Only 8.7% of men in this group are employed part-time, compared to almost half – 42.4% – of women. The most likely reason for this disparity is that women continue to provide the vast majority of childcare in the UK. With the prohibitive costs of professional childcare, it is unsurprising that many women find themselves better off not returning to work, or seeking only part-time employment. Another issue is the fact that male workers dominate the highest-paid positions. This can be partly attributed to the fact that more women than men take a break from employment to care for their children, meaning they have fewer years of professional experience than similarly aged men. As well as this, the longer someone has worked for a company, the more they tend to get paid, meaning women who take a break from work to care for their children are further disadvantaged. Although it is much harder to objectively measure, stereotypical gender expectations can also make women less likely to pursue the highest paid roles and industries. Finally, simple misogyny (whether conscious or not) can influence how likely women are to be considered for leadership positions, or roles traditionally occupied by men.
Which Industries have the Biggest Gaps?
Although 1,500 companies are yet to publish their results, 10,000 did meet the 5th of April deadline. Unsurprisingly, the companies with the largest gender pay gaps were airlines. The vast majority of pilots are men, whilst most cabin crew staff are women, resulting in disparities in hourly pay of 50% and more. Ryanair proved to have the largest gap of all, a huge 71.8%.
Not all the results could have been predicted, however. The fact that schools have some of the highest gender pay gaps came as a surprise for many. Of the 100 companies with the biggest gender pay gaps, 40 were schools. Of these 40 schools, a quarter paid male employees 50% more than their female colleagues on average. These gaps might seem bizarre, since women are actually over-represented in the teaching profession – 64% of teachers are women. Despite only 36% of teachers being male, though, 62% of head teachers are men.
Although these huge gaps are particularly troubling, what is more worrying is the fact that they are part of a universal trend: not one sector pays women as much as men overall. Only 8% of the companies to release their data have achieved gender parity when it comes to pay packets.
The Gender Pay Gap and Debt
The amount that a person is paid can have a huge impact on how they deal with debt. According to the Money Advice service (MA), debt tends to have a more significant effect on women than men, because they are paid less on average. Lower wages lead to tighter budgets, meaning that women are less likely to have funds to fall back on when unexpected costs arise. This, in turn, makes women more likely to use credit, which can quickly lead to a spiral of debt. Of the 8.8 million people struggling with debt in the UK, 64% are women. Women also take longer, on average, to pay off their debts than men.
Closing the Gap
According to gender pay gap expert, and former senior civil servant, Helene Reardon Bond, the new visibility of the pay gap is “monumental”. “The gender pay gap deniers will say that the gap only exists because of the choices women make,” she continued, “but while everyone makes choices women make constrained choices”. Examining the extent of the gap could be the first step towards finally closing it. Progress has been slow thus far – the gender pay gap for hourly wages stood at 10.5% in 2011, and has fallen by only 1.4% in six years. At this rate, it will take another 40 years to achieve wage equality.
Some companies, impatient for change, are taking matters into their own hands. London-based marketing agency, Brainlabs, , voted to simply raise female employees’ wages by an average 8.6% after discovering a gender pay gap of 8.6% in favour of men. The University of Essex has taken similar steps. After finding that female lecturers were being paid less than their male counterparts on average, their salaries were raised to redress the balance.
Hopefully more organisations will follow their lead, and with the growing popularity of flexible working hours, and flexible parental leave, the gap should continue to narrow. In the meantime, the new and radical visibility of the pay gap has opened up a dialogue about this vital issue, what causes it, and what can be done to eliminate it.
If you need more information about the options available to you in dealing with your debt, you can always speak confidentially with one of our friendly advisors on 0808 2085 198.