There’s a lot of talk about closing pay gaps. The Foundation’s work is at the intersection of identity – from class, to race, to gender and faith. Here, we take a closer look at their impact on pay gaps, and ask whether 2017 is a year of action?
Gender: A 2016 Report found that bridging the gender pay gap could add as much as £150 billion to the UK economy by 2025. The gender pay gap is the average difference in hourly pay between men and women and is the headline statistic for representing women’s economic inequality. The gap can be measured by either the median or the mean average. The mean gap for all full-time men and women in 2016 is 13.9%, according to the Annual Survey of Hours and Earnings. The figure for all men and women – also known as the aggregate and including the 42% of working women in part-time work,5 which is lower paid by the hour – is 18.1%.
In a step to close the gap, from 6 April 2017, companies in Great Britain with more than 250 staff will be legally obliged to disclose gender pay gaps. Employers will be required to publish the following four types of figures annually on their own website and on a government website:
- Gender pay gap (mean and median averages)
- Gender bonus gap (mean and median averages)
- Proportion of men and women receiving bonuses
- Proportion of men and women in each quartile of the organisation’s pay structure
Race: A 2016 study of ONS Labour Force Surveys, found the pay gap between black, Asian and minority ethnic (BAME) workers with degrees and white graduates is 10.3%. Calling for increased reporting, last month, the McGregor-Smith Review – an independent report commissioned by the Government – found that people from black and minority ethnic (BME) backgrounds are still being held back in the workplace. It estimated that the UK economy could benefit by £24 billlion per year if BME staff progressed in work at the same rate as their white counterparts. The report urged businesses with more than 50 employees to publish a breakdown of their workforce by race and pay band.
Class: On 26 January 2017, the Social Mobility Commission published their report on the class pay gap within Britain’s professions. Examining the average earnings of people in professional jobs from different backgrounds, the report found a gap of £6,800 from those who came from a poorer family. The gap was reported to be partly caused by differences in educational background, along with the tendency of middle-class professionals to work in bigger firms and move to London for work. However, even when professionals had the same educational attainment, role and experience, those from poorer families were still paid an average of £2,242.
BME Women: In their 2017 analysis of the gender pay by ethnicity, the Fawcett Society revealed the following inequalities:
• Black African women have seen virtually no progress since the 1990s in closing the gender pay gap with White British men, with a full-time pay gap of 21.4% in the 1990s and 19.6% today.
• Pakistani and Bangladeshi women experience the largest gender pay gap at 26.2%.
• Indian women experience the biggest pay gap with men in their ethnic group at 16.1%.
Action in 2017? More data and research is needed to truly understand the impact of race, gender, faith and class in the workplace. While steps are being taken to close the gender pay gap, we’re struck by the double, or triple pay gap faced by some workers. This year, our programmes will continue to help level the playing field, and also seek to increase the number of BME women in leadership roles. Please consider making a small donation to support our work. #MoreWomen