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Gender pay gap halves but children still come with 'pay penalty' - research

The gender pay gap for women in their 20s has halved to just 5%, but the progress will be undone in later life, according to new research.

A study by the Resolution Foundation found that young women starting in the world of work will still earn "significantly" less than their male counterparts over their careers.

The difference in pay for men and women has been closing, partly as more women work in high-paying industries and jobs, said the think-tank.

But an enduring "pay penalty" remains when women have children, which will continue to affect their earnings, said the report.

The analysis found that baby boomers, those born between 1946 and 1965, experienced a pay gap of 16% during their 20s, falling to 9% for women born between 1966 and 1980 and then to 5% for those born between 1981 and 2000 - described as millennial women.

Despite this progress in the early career phase, the gender pay gap continues to rise rapidly for women in their 30s and 40s, said the foundation.

Senior policy analyst Laura Gardiner said: " Successive generations of women have benefited from slow but steady progress in closing the gender pay gap.

"Young women today face relatively little disadvantage in terms of their pay packets compared to what their parents' and grandparents' generation faced.

"But while many millennial women haven't experienced much of a pay gap yet, most probably will once they reach their 30s, when they start having children. What's more this pay penalty is big and long-lasting, and remains for younger generations despite the progress in early careers.

"As people continue to live and work for longer, it's important that businesses, policy makers and civic society continue to focus on closing the gender pay gap at all ages, and for every generation.

"After all, small hourly pay gaps quickly grow into large lifetime pay penalties that can leave women hundreds of thousands of pounds worse off over the course of their careers."

Shadow equalities secretary Sarah Champion said: "It is encouraging to see the pay gap closing while people are in their twenties, but it is also clear that this Tory Government is failing to address its underlying long-term causes.

"Many women are still trapped in chronically low-paid, low-progression sectors of the economy, while the cost of childcare has soared under the Tories.

"Thousands of new mothers are forced out of their jobs each year due to maternity discrimination and the vast majority of tax and benefit changes have fallen on the shoulders of women.

"Labour will pursue an economic strategy that works to promote gender equality, which is why we will gender audit all our economic policies in government."

A Government spokeswoman said: "The gender pay gap is at a record low but we have to push further to eliminate it completely.

"Shining a light on organisations' pay gaps means employers can take action to tackle the causes and drive change.

"That's why we are introducing requirements for all large employers to publish their gender pay and bonus gaps data from April this year."

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