Imagine spending the last seven weeks of this year working for nothing. This is in effect what women across the world do when compared with men because of the endurance of gender pay gaps.
In a country such as the UK, where average hourly earnings for women are 13 per cent lower than for men, it equates to female workers spending 48 days out of a year working for free. They do it for even longer in countries with bigger pay gaps.
These UK figures apply to all jobs, full or part-time, and are partly explained by the higher number of women who work either part-time or in poorly paid industries, or both.
The gap is a smaller 7 per cent if you only count full-time jobs but much larger for women in their 50s and positively gargantuan in finance and insurance.
READ MORE
But this is not the half of it. The UK gap turns out to have been understated for 20 years, new research has shown, because official statistics give undue weight to public sector employers, which typically have smaller gender pay gaps.
This suggests the actual pay gap is about 1 percentage point higher than what we have been led to believe.
That does not sound like much but it matters for many reasons. If politicians and bosses had known the gap was wider than it appeared, they might have been faster to launch policies to close it, such as mandatory pay gap reporting or flexible working.
Also, official earnings numbers are used to calculate things such as national minimum wage rates, so obviously they should be accurate.
[ The broken rung in the career ladder - why women continue to earn lessOpens in new window ]
The UK’s official statistics agency has said it will review its work. But that won’t fix one of the more frustrating aspects of the gender pay gap: it seems to persist even when women set their own pay rates, rather than accepting those of an employer.
The average male freelancer in the US charges 26 per cent more than female freelancers, research showed. The gap is even wider for legal freelance work, where men charge an average $145 (€124) an hour and women just $68 (€58).
It might be even worse in the UK, where a 2020 study showed self-employed men earned an average of 43 per cent more than self-employed women.
These figures sound all too credible to me. I still remember the shock when one of my closest male friends suddenly looked at me in horror and exclaimed: “I’ve just realised: I haven’t had a pay rise for nearly 12 months!”
This was at a time when I had not had a pay rise for at least three years. It never occurred to me to do what my friend did: barrel into his boss’s office and demand more money, which he duly received.
The idea that much of the pay gap is explained by women failing to negotiate as well as men remains prevalent more than a decade after former Meta executive Sheryl Sandberg popularised it in her book Lean In.
[ Book review: Lean In: Women, Work, and the Will to Lead, by Sheryl SandbergOpens in new window ]
Some companies, such as Reddit, have even tried ending salary negotiations for new employees to address the problem. But it is not clear women are the biggest architects of their misfortune.
One reason for the pay gap is that men do a better job of snagging top roles. And the research shows that their relative overconfidence explains as much as 11 per cent of this type of gender gap.
That is not nothing but it is probably not enough to say the main reason for the gender pay gap predicament is that women hold themselves back.
The more compelling explanations continue to be those that have been known about for years but remain stubbornly hard to address.
A lack of adequate childcare. Parental leave policies that make it harder for men to do as much child-rearing as women. A lack of flexible working arrangements. And so on.
The worst is the doubly unfair motherhood penalty-fatherhood bonus conundrum, where employers deem mothers less committed workers, and pay them less accordingly, while judging fathers to be more dedicated, and therefore worth more money than men without kids.
In other words, it can pay to have children if you are male and cost if you are female.
The good news is that the pay gap is manageable. It has been narrowing in countries such as the UK that have been trying to tackle it. The less good news is that, even here, the problem has been worse than we realised for so many years. – Copyright The Financial Times Limited
