£92bn boost from closing UK gender pay gap
8 Mar 2019
Closing the UK’s gender pay gap would increase female earnings by £92bn, a rise of 20%, according to research from PwC
8 Mar 2019
The firm’s Women in Work Index, which analyses the representation and welfare of women in the workplace across 33 OECD countries, found the UK is making gradual progress, climbing by one place to reach 13th, from 14th last year and 17th position in 2000.
PwC says the UK is performing above the OECD average and is second out of the G7 countries, behind Canada. The index is headed by Iceland, followed by Sweden and New Zealand.
However, by matching Sweden’s level of female employment of 69%, the UK (at 57%) could boost its GDP by £178bn.
Similarly, closing the UK gender pay gap by increasing female average wages to match their male counterparts would increase female earnings by £92bn, a rise of 20%.
While the UK has improved across all five indicators of female economic empowerment this year, progress has not been evenly spread across the regions. Scotland tops the index with a strong performance across the board. The south west comes second due to the highest female labour force participation rate, with little gap between males and females. The bottom two places are occupied by the east Midlands and west Midlands, primarily due to high female unemployment rates and large gaps between male and female labour force participation rates.
Yong Jing Teow, senior economist at PwC, said: ‘The top three performing regions have large hospitality sectors and a high concentration of public sector jobs, which tend to have more balanced representation. To help the UK as a whole improve further we need to tackle local issues, a one size fits all approach isn't going to work.’
This year, for the first time, PwC looked at what two of the world’s most populous countries, China and India, stand to gain by promoting gender equality and female participation in the workforce. Combined, the two countries currently account for more than a third of the global female workforce.
In China, closing the 25% gender pay gap would have the biggest impact, generating a 34% increase in female earnings, equivalent to $2 trillion.
In India, increasing female employment rates to the same level as Sweden would generate a $7 trillion boost to GDP, which is equivalent to approximately 79% of India’s GDP.
Nordic countries continue to perform well in the Women in Work Index, supported by larger government spending on family benefits such as affordable childcare, which helps to reduce the gender pay gap and increase female employment. Policies in turn influence culture, creating role models and influencing aspirations and expectations. This year, New Zealand enters the top three for the first time since the Index was first published in 2013.
Laura Hinton, chief people officer at PwC, said: ‘It’s encouraging to see the UK making progress. Mandatory pay gap reporting has shone a spotlight on the issue, with gender equality now a real priority for business leaders in this country.
‘This research shows that an area of weakness for the UK is the number of women in full-time employment. Employers can help address this by supporting women returning to the workplace and creating a culture where ambition and progression is encouraged at all levels.’
Report by Pat Sweet