Gender pay gap costs women £90bn a year
5 Mar 2018
Closing the gender pay gap in the UK could boost women’s wages by £90bn per annum, increasing incomes on average by £6,300 per woman per year, according to research from PwC
5 Mar 2018
Despite improvements since 2000, these gains have been outpaced by other countries’ efforts. In particular, slow progress in closing the gender pay gap, coupled with a persistent low share of females in full-time employment, has put the brakes on the UK making bigger strides towards gender equality in the workplace.
In PwC’s latest Women in Work Index the UK has fallen from 14th to 15th place in a ranking of 33 OECD countries based on five key indicators of female economic empowerment. The Nordic countries continue to lead the index - with Iceland, Sweden and Norway rated as the top three countries for opportunities for women in the workplace.
Advances in closing the gender pay gap varies across UK regions. Northern Ireland has led the way in closing its gender pay gap since 2000, reducing it from 22% to 6%, the lowest in the country. This has been driven by the share of women working in public administration, a sector with relatively high pay and a relatively low pay gap.
In contrast, London has made the slowest progress, only managing a 3% reduction in its pay gap from 22% in 2000 to 19% in 2017. The capital’s pay gap increased in 2017, up from 17% in 2016 due to a rise in the gender pay gap in low paying sectors in the region.
The research found that financial services, and agriculture and forestry sectors have seen the biggest improvements in their gender pay gap over the past year, although financial services still has the highest overall gap. The pay gap has increased in accommodation and food services, administrative and support services, mining and education sectors.
Yong Jing Teow, economist at PwC, said: ‘Disparities in average pay for men and women exist across all regions of the UK. While great progress is being made in some areas, sustained business action is needed to ensure that these gains continue. We need to ensure we’re implementing long-term solutions, not just quick fixes, to close the pay gap for good.’
PwC’s analysis shows larger government spending on family benefits significantly pushes down the gender pay gap, which suggests that greater availability of affordable childcare could improve female participation in the workforce, along with having more female entrepreneurs and women in decision-making positions, and more flexible working patterns.
The government has announced a £1.5m fund offering grants to projects which help people to return to work in the private sector after time out spent caring, as part of its bid to close the gender pay gap.
These projects could help returners update their skills, provide other training, or support businesses to increase employment opportunities for returners. The fund will prioritise projects that focus on SMEs, employers outside London, and projects that support returners at all skill levels.
Amber Rudd, home secretary and minister for women and equalities said: ‘It is truly striking that nearly 90% of people out of paid work because they are caring for the home or family are women.
‘By offering meaningful work that pays, the fund will give people who want to return to employment the opportunity to use their valuable skills, talents and experience.’
A toolkit and guidance have been created to support companies that would like to employ returners. The guidance, which was developed by Timewise and Women Returners, is aimed at employers across sectors and of all sizes. The toolkit, sponsored by Vodafone, explains the business benefits of employing returners.
PwC’s Women in Work Index is here.
Details of the returners fund are here.
Returners guidance is here.
Report by Pat Sweet