Admitting and understanding pay gaps is not easy for societies nor employers. A comprehensive pay gap analysis in the UK revealed inequalities for women and men, for ethnic groups and for people with a disability. Related recommendations go beyond traditional ways to address gender pay gaps, and they question wide-spread communication styles in the field.
While it has been relatively easy to criticise the persisting pay gap between women and men, little was known about ethnic minority pay gaps or those related to a disability. While these additional dimensions do not water down gender issues, they shed new light on gender inequalities. Actually, the latest pay gap report by the Equality and Human Rights Commission in the UK highlights the complex causes of pay gaps, often missed out of debates that focus only on the headline figures: These show that the gender pay gap is at 18.1%, the ethnic minority pay gap at 5.7% and the disability pay gap at 13.6%. But these numbers do not provide some of the essential deeper-level insight. For example, despite the relatively low headline figure for ethnic minorities, data show vast differences within this group, including by gender and by origin (British-born vs. recent immigrants).
Ethnic minority pay gaps affect men more than women
One startling finding is that most female ethnic minority groups had a pay advantage over White British women. However, female Bangladeshi immigrants and Pakistani immigrants both experienced around a 12% pay gap compared with White British women. On the other side, from 2011 to 2014, almost half of Bangladeshi men and around a third of Pakistani men were paid less than the living wage. This compares with under a fifth of White British men. The largest ethnicity pay gaps were found to be
- Male Bangladeshi immigrants experienced the largest pay gap of 48%
- Pakistani immigrant men experienced a 31% pay gap
“Pay gaps for different groups should by no means be compared against each other,” Diversity guru, Michael Stuber, comments, “they should remind us to take a deeper look at the wealth of data that is available,” he continues and adds concerns about the normative and judging pay gap communication he observes some places. “[in Germany] Key stakeholders do not even ask about ethnic or disability pay gaps,” he criticises. Meanwhile, the UK has produced a quality foundation with data, including disability pay gaps.
Disability pay gaps vary by gender and type of impairment
Unfortunately, it will come as no surprise that employees with physical impairments generally earn less than non-disabled people. But the pay gaps for men with neurological or mental health conditions are particularly large:
- men with epilepsy experience a pay gap close to 40% and women with epilepsy have a 20% pay gap compared to non-disabled men and women respectively
- men with depression or anxiety have a pay gap of around 30% whilst women with depression or anxiety have a pay gap of 10%
The research also highlights that women, disabled people and people from some ethnic minority groups are more likely to be paid below the living wage. This also means that caution should be given to comparing sizes of pay gaps. For instance, the pay gap between disabled women and non-disabled women is smaller than the pay gap between disabled men and non-disabled men. As sad part of the explanation is that women in general are more likely to be paid less to begin with.
Gender pay gaps continue to be a key issue – and much more complex than generally suggested
According to the Annual Survey of Hours and Earnings, the overall median gender pay gap (for full and part time workers) in 2016 was 18.1%.
- The gap for full time employees only was smaller at 9.4%.
- While part-time women tended to earn slightly more than part-time men (6%), part-time women earned 36.5% less than full-time men. Women are much more likely to work part time than men.
Based on the mean, the pay gap has fallen from 27 percentage points in 1993 to less than 10 percentage points in 2014. It appears that the underlying social pressures, norms and gender roles that often shape occupations and career paths of men and women are still showing up in unequal pay. While the severity has decreased, women are still more likely than men to work part-time and to take time out from their careers for family reasons. On the other side, reports show that the effect of ‘occupational segregation’ (the division of men and women into different occupations) on pay has lessened. However, within occupations, on average women are still paid less than men, e.g. as medical practitioners 30% less, as financial managers or directors 35% less. In 2014, the gender pay gap within occupations was 15.3% based on the median (down from 20.7% in 1993), and now explains a very large part of the gender pay gap overall.
Age and children affecting the Gender Pay Gap – for women and some men
Mostly due to so-called ‘family breaks’ older women experience a larger pay gap than younger women (both compared with their male peers). While younger married women earn more than unmarried women, this advantage reverses with age. Data suggest that having a child increases the pay gap considerably for women. Married men, by contrast, earn substantially more than unmarried men in all age groups.
Academic education has a high value for women
The Equality and Human Rights Commission report shows that in the period 1993–2014 the gender pay gap among graduates declined from 21% to 6%. Regression analysis found that female graduates have a higher pay return on their degree than male graduates. Nevertheless, the report also shows a larger gender pay gap for the private than for the Public Sector and a smaller gender pay gap in London than in any other region in the UK.
Shake up of working culture and practices recommended to reduce pay gaps
Explaining the recommendations of the Equality and Human Rights Commission, their Deputy Chair, Caroline Waters, requested: “We need new ideas to bring down pay gaps – it’s not just about more women at the top. Yes, female representation is important but tackling pay gaps is far more complicated than that.” Consequently, the Commission wants to shake up work cultures rather than look at technical fixes: All jobs should be advertised as available for flexible working and greater support should be given to fathers to play more of a role in child care. But the overall strategy to reduce pay gaps in Britain makes six recommendations to improve equality in earnings not only for women, but also for ethnic minorities and disabled people.
- Offering all jobs as flexible will remove the barriers faced by women and disabled people and increase work/life opportunities for everyone.
- Giving fathers extra ‘use it or lose it’ paternity leave paid at the right level will encourage more men to ask for flexible working (following a successful model adopted in Scandinavian countries).
As well as pressing for flexible working to be encouraged in all jobs at all levels, the strategy also urges governments, their agencies and employers to increase diversity at all levels and in all sectors by encouraging employers to tackle bias in recruitment, promotion and pay and introducing a new national target for senior and executive management positions. “The inequalities in pay for ethnic minority groups and disabled people also need to be talked about,” Waters added and insisted “to tackle inequalities across the board”. The strategy is supported by the most detailed and comprehensive analysis to date of pay gap data and the drivers behind them. The research was carried out by the Institute for Social and Economic Research at the University of Essex.
Meanwhile: “poisoning language” in Germany and on EU
At the end of October, 2017, the DIW Berlin published their Gender Pay Gap report for Germany. Unlike the neutral, descriptive language in the comprehensive UK report, the editorial headline sets the tone for the German publication by saying that ‘there is still a lot to be done in Germany’. Articles and interviews then talk about how women ‘only get on third of incomes’ and about ‘large income differences’. While the DIW claims to offer an independent perspective on economic development, their normative langue echoes that of the EU’s Gender Institute (which calculates, e.g., gender equality ‘scores’): Based on the underlying political agenda, the EIGE says that the EU score has increased ‘only’ by four points from 2005 to 2014 and that progress is moving ‘at a snail’s pace’. Practitioners with a particularly long experience in Diversity, Equality and Inclusion have observed the divisive impact that such ongoing micro-messaging can have on large parts of the key audience. “Even in progressive organisations, there are now large groups of people – both men and women – that have been demotivated by the poisoning language”, Diversity expert, Michael Stuber, reports. He points to similar ‘protest reaction’ dynamics in recent elections, the ‘Google Memo’ case and many other incidents, where people apparently had enough – or rather too much – of one-sided criticism. This is considered particularly questionable when political goals are mixed with economic perspectives or when realistic baselines are not considered in the first place. However, a larger look at global gender gaps (beyond pay) confirm that the progress of the past 20 years does not continue automatically.
WEF Global gender gap: progress halted
For the first time since the World Economic Forum started its reports in 2006, the global gender gap is widening again. Each year, the WEF ranks most countries of the world in its Global Gender Gap Index in four areas: economic participation and opportunity, education, political empowerment, and health and survival. The 2017 index of 144 countries, published on Nov 2, 2017, shows a decrease for the first time, from an overall global gap of 32% in 2016 to 31.7% in 2017 – while the political gap has remained unchanged at 23%. The economic pillar, which looks at salaries, workforce participation, and leadership, saw a second consecutive year of reversed progress and the lowest gap closure value measured by the Index since 2008. The figures is calculated across all countries and includes a slightly different set each year. While the WEF does not use judging language when describing their finding, it seems to be implicitly clear that there is a gap to be closed.