Belfast Telegraph

Closing the gender pay gap becoming crucial for future of labour market

Economy Watch

By Paul MacFlynn, senior economist at the Nevin Economic Research Institute

Earlier this month the deadline passed for large companies to report their gender pay gap to the UK government. The drip feed of announcements from these companies over the last number of months has led to increased discussion about the average pay of men and women.

Despite the best efforts of many commentators and advocates, the debate about the gender pay gap has been inevitably confused with equal pay.

To put it simply, the gender pay gap measures the difference in earnings between men and women. It measures the difference between what the average man is paid compared to the average woman.

It does not look at men and women in the same jobs and compare their pay.

It may well be the case that some women are paid less than men for the same work, but under the Equal Pay Act 1970, it is illegal to do so.

That doesn't mean that it doesn't happen, as some recent high-profile examples have shown, but this is not what the gender pay gap is about.

There is no fixed definition of the gap because it can be measured overall, at sectoral level and can be adjusted for part-time work. This means that the gender pay gap can be reported with many different numbers, and this is often where the confusion can begin. To illustrate this point let's take a brief look at the most recent data for Northern Ireland.

The latest ONS report for the UK regions showed that Northern Ireland does indeed have a gender pay gap, but it actually favours women. Women earn on average 3.4% more than men. Problem solved? Not really.

The measure the ONS reports compares full-time hourly earnings between men and women.

The problem is only 63% of women are in full-time employment compared to almost 90% of men. Looking at overall hourly pay, women took home only 91% of the average man's wage packet.

If we look at weekly pay, the gap is even larger because, either full-time or part-time, women still tend to work fewer hours than men.

We know that some of this is explained by family and care issues but it doesn't explain as much as you might think.

A universal childcare system could mitigate some of this effect but there is also an issue surrounding the types of jobs and the areas of work which women tend to favour.

If we further narrow our analysis to adjust for the industry and sector in which they work, the pay gaps between men and women can be slowly eroded away.

Many have argued that this shows that even with all the social supports possible, so long as women choose to work in lower paying sectors, a gender pay gap is inevitable.

There are a number of problems with this analysis. The first issue is with the implicit assumption that women 'choose' to work in low paying sectors.

Although it is regularly trotted out as a perfectly logical reason for the gender pay gap, it is an utterly bizarre notion.

It is alleging that the majority of women suffer from a pathological tendency toward low pay.

It is of course more obviously the case that the sectors and professions women choose to work in have been valued less than those traditionally filled by men.

It could be argued that this is just the value that the market places on the type of work carried out by men and women. However, this leads naturally to the question of whether society or the market is best placed to determine what the value of work really is.

Beyond gender equality concerns we are going to have to tackle this issue anyway for two reasons - automation and demography.

The care sector has been consistently one of the lowest paid industries in Northern Ireland as it is in the rest of the UK and many other western economies.

As a society we are living longer and the need for long term adult social care is only going to increase.

This is going to require a more skilled, a more motivated and ultimately a more valued workforce.

The claims about the number of jobs that will be taken over by technology have been somewhat over-exaggerated, but there is little doubt that automation will push more and more people from traditional production sectors into new digital and services sectors.

In short it will eventually put a lot of men into sectors that have up until now been dominated by women.

Therefore, closing the gender pay gap should not be seen as just a gender issue, it is also about creating a labour market fit for the future.

It is about recasting how we value work and moving towards a more ethical model of employment.

For the future we don't just need to focus on equal pay, we also need to focus on what we define as equal work.

Belfast Telegraph

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