What is the Gender Pay Gap and Why Does It Matter?



Michelle Rodger is a WFI National Committee member and a director of Business for Scotland.  In this blog post she explains how the gender pay gap harms women. 

Womenomics is the theory that women play a primary role in economic growth. Yet despite facts and figures providing solid evidence of the crucial impact women play in the workplace and the economy, we still live in a world where it’s ok to pay women less than men and the glass ceiling has no more than a few subtle cracks in it.


In October Iceland’s women stopped working and went home at 1438 hrs to protest gender pay inequality; that’s the exact time Iceland’s women effectively stopped being paid, because men are paid more on average to work a full day.


I’m not sure what time women in Scotland would have to stop work but at the snail’s pace of change in this area, young women starting work today will be retiring before gender parity becomes a reality.

There is a clear economic case for addressing the pay gap but Anna Ritchie Allan, manager at Close the Gap, says the pace of change is “glacial” and TUC general secretary Frances O'Grady likens it to a snail’s pace.

O’Grady says: "The full-time gender pay gap is closing at a snail's pace. At this rate, it will take decades for women to get paid the same as men.

"We need a labour market that works better for women. This means helping mums get back into well-paid jobs after they have kids, and encouraging dads to take on more caring responsibilities.”

Women work on average 39 more days a year than men and on average 50 minutes more a day than men, data from the WEF's Global Gender Gap report suggests.The report says the prevalence of unpaid work burdens women and estimates that economic inequalities between the sexes could take 170 years to close. The gap in economic opportunity, the WEF says, is now larger than at any point since 2008.

Nearly a quarter of a billion women have entered the global workforce over the past decade, and although men do 34% more paid work than women, women still spend more of their time on unpaid work such as housework, childcare and care for older people. When this is factored in, the WEF calculates women work more than a month more than men per year.

In addition, Scotland’s rates of female business ownership are persistently low compared to similar countries. A recent survey calculating the contribution of women’s enterprise to the economy estimates that if the ‘enterprise gap’ was closed, the contribution to Scotland’s GVA would increase to nearly £13 billion, equivalent to a 5.3% growth in the size of Scotland’s economy.

Yet the unconscious bias prevalent in business today means that we are still working in an environment wheremore than one third (34%) of women business owners (across the UK) have experienced discrimination as a business woman. According to a survey of women members, the Federation of Small Businesses found instances in which a woman’s role in the business was mistaken, or an assumption made that a male employee was the business owner were common.

Anna Ritchie Allan is manager of Close the Gap, she says the stubborn gender pay gap shows that women continue to face discrimination and disadvantage at work and that the causes of the pay gap go far beyond pay discrimination.


“The stark segregation between the different types of work that men and women do finds women doing undervalued, low-paid jobs such as cleaning, caring and retail. Women still do the bulk of unpaid caring, and coupled with a lack of flexible working, it makes them less likely to be found in higher-paid, senior positions.


“In the post-recession labour market, women’s employment is becoming increasingly precarious with drastic cuts to public sector jobs and an increase in temporary and zero hour contracts. Women make up the majority of workers living in poverty, with many juggling two or three low-paid, part-time jobs as they try to manage ever-shrinking household budgets.”


To address what she calls the “glacial pace of change on the pay gap”, much more needs to be done to realise equality for women at work. Initiatives aimed at increasing the number of women on boards and in senior positions are laudable, says Ritchie Allan, but of little relevance to most working women. What we need, she insists, is substantive action to lift women on the bottom rung of ladder out of poverty, and she makes a number of serious suggestions:


  • Gender equality needs to be mainstreamed into Scottish Government policies and strategies so that addressing women's labour market inequality is at the core of the labour market and economic strategies.

  • National enterprise and skills agencies must take substantive action to mainstream gender equality, and ensure economic development policy and skills policy takes account of the gendered barriers women face in accessing and progressing in employment.

  • Schools and early years education providers should implement early intervention measures to address gender stereotyping which significantly contribute to the assumptions that there are 'women's jobs' and 'men's jobs'.


It’s also the case that women are increasingly acquiring more qualifications at all levels and yet very often are working in jobs in where their skills are not being used. Ritchie Allan says the onus shouldn't be on women to address the inequality and disadvantage they experience, as they alone can't address structural barriers such as a lack of flexible working, occupational segregation and systemic pay discrimination.


Employers should provide flexible working, including quality part-time work (i.e. part-time jobs at senior levels), to ensure that women are able to work in jobs commensurate with their skill and qualification level. And employers should do an audit of their employment policies and practice to ensure that recruitment and progression practices are fair and transparent, and not determined by informal networks, to which women are less likely to have access.


There is a clear economic case for addressing the pay gap. A lack of quality part-time work means women are simply in the wrong jobs for their skill and qualification level. This economic inefficiency is a drag on growth as employers are failing to harness women's skills and talents, and that's worth £17bn to Scotland's economy. Supporting women returners is key to harnessing women's skills and talents.


 Talat Yaqoob, director, Equate Scotland, says in order to close the gender pay gap we need to overcome occupational segregation, which means ensuring that women have access to the jobs that are stereotypically considered to be “for men”, and this is why increasing the number of women in STEM professions is critical. Equally, she says, we must value the career paths where women are disproportionally present – childcare, social care and catering professions need to be respected and better paid.


“From a young age we stereotype,” says Yaqoob. “We encourage boys to pursue science, technology and engineering related toys and interests, this means they are more likely to pursue these as subjects at school and later as careers.


“We have an outdated idea that STEM subjects or careers are better suited to men. There is no evidence that tells us this, in fact, when girls take these subjects they outperform boys. We must open the doors to STEM to girls at a young age, but equally we need to support the small percentage studying STEM in higher education and who are already building their career there – we need to support them to stay and highlight them are role models.”


Women in STEM is critical for Scotland’s economy – it is estimated that increasing the number of women in STEM jobs is worth £170 million to our national income. Yaqoob says more women in the sector would have a huge impact, particularly on the advancement of technology.


“STEM products are used by everyone, naturally, so if you have a diverse team behind product design you consequently have a product that is more likely to be representative of the needs of more people.


“Similarly to increasing the number of women in STEM, we must open the doors to business and entrepreneurship to women – that means challenging biases and misconceptions and having a business industry that values women’s leadership.”


Equate Scotland has been funded for a year by the Scottish Government to support women returners to STEM – this project will work with STEM employers to provide women who have qualifications in tech and engineering but have been out of paid employment, with placements to update their skills and engage them back into STEM.


“This project is one example of what can be done,” says Yaqoob, “And we hope the project will expand across the years to reach as many women as possible.”

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