Recently there has been a lot of talk about the ‘pay gap’ between men and women in the workplace. Despite our understandable feelings of concern for Jennifer Lawrence, who feels she is unfairly paid less than her male co-stars for prancing around in Game of Thrones or something, let us look at the pay gap between ‘normal’ men and women.
A recent report by the IFS (Institute for Fiscal Studies) shows the persistence of the gender pay gap. It highlights that women in paid work receive about 18% less per hour than men, with the gap widening consistently for 12 years after a first child is born, by which point women will receive a huge 33% less than men. Women over 40 are most affected.
The gender pay gap is a good lens through which to understand the day to day incomes of women; it also represents another barrier to women being able to save adequately for a comfortable later life. The average net income of female pensioners per week is approximately 85% of their male counterparts and over two thirds of pensioners living in poverty are women.
We know that women, particularly those in mid-life, take more career breaks for childcare or other caring responsibilities and are more likely to be in part time work. All these factors impact on women’s ability to remain in paid work, re-enter the labour market, keep paying National Insurance and save for later life. All of which means that many women are more likely to be reliant on the State Pension as their main form of retirement income.
So what needs to happen? A report by the Office of National Statistics (ONS) concludes that if a large part of the gender pay gap is caused by a concentration of women in part-time work and the fact that they do the lion’s share of unpaid caring, then some of the solutions lie here. A Women and Equalities Select Committee report earlier this year proposed making all jobs flexible by default from the outset and creating a national scheme to support women to get back into work. The Committee also recommended new industrial strategies on productivity and pay in low paid, highly feminised sectors (such as care).
Government can lead the way but employers can do a lot more to help carers stay in work and manage the impact of caring on their finances and plan for later life. They need to understand how many carers they employ and then develop and implement a robust carers’ policy.
Gender pay inequality is not just today’s bad news story – if it is not resolved, it will add yet another layer of disadvantage for women in later life. One way of levelling it all out is to allocate caregiving credits to recognise the value of unpaid invisible care work in homes and communities up and down the country (worth £343 billion according to ONS and the economy depends on it).
Also, ‘Basic income’ could be another solution (also known as Citizen’s income) and making sure there are ‘pension credits’ allocated during caregiving years. Family care saves the state billions. It’s crazy to suggest that the solution should be more people caring less and in paid work for longer hours to try to close this earnings gap.
Instead, they should make sure caregiving is rewarded with some sort of income too, through NI contributions, through eradicating the tax penalty that households face when there’s a caregiving adult (who has forfeited one salary to care). Also child benefit for all should be reinstated (the changes to child benefit last year discriminated against many caregiving/low income women in particular, whereas many higher earning women got to keep their child benefit.
Many people will disagree with the findings of the ONS, saying that there is no gender pay gap, that women are paid less after having a child because they chose to leave the workforce and thus miss out out on promotions, salary and pension contributions. It is their own fault. This is often said by men.
How recruiters can help
Ashley Nowicki is a director at a major recruitment company and told me how he had a ‘killer’ candidate and managed to find her a new and unexpected job, once she had become intrigued by the company.
“We didn’t talk about what the candidate would have to give up or what they were currently making. We didn’t need to talk about how much salary, equity or bonus they would be willing to surrender in exchange for a role at this company they now came to love.
Instead, we simply discussed salary and expectations. The salary was a healthy one for the skills and experience that this creative had. It was one I was happy to put forward. It was also one the company welcomely accepted, understanding this is what someone with these artistic and strategic assets costs. This creative just so happened to be female. As well as Asian-American.”
Nowicki says: “Recruiters have access to the power of numbers, to the intricacies of negotiation. And while talk will continue across social, political and business channels about how to close the wage gap, it seems crazy that we are forgetting one thing: we as recruiters have the capabilities needed to fix this. Over 60% of us are female and according to this same study by LinkedIn, we come with 10+ years of experience (on average) too. This isn’t our first rodeo, so let’s stop acting like it.
Let’s instead rise to the challenge and solve this once and for all. And if you work at a company who isn’t on board with offering the same hiring package to people with similar skills but different genetic makeup, consider finding a new adventure. But this time, for yourself.”
Powerful words and perhaps recruitment companies do hold the potential for change, but I doubt if they can do anything for poor old Jennifer Lawrence, who in 2015 earned $46 million, but still moans that it’s not enough.