Accessed
4th September 2013
20
August 2013 Last updated at 16:39
Viewpoints: Should equal gender pay be enforced?
New salary figures released by the Chartered Management
Institute (CMI) have documented that the gender gap in basic salaries has
increased at senior levels.
The pay gap between
men and women is exacerbated by bonus payments given to male managers which are on
average double those for women, says the CMI.
Male managers' average
bonus payments were £6,442 last year compared with £3,029 for women.
The gender pay gap
increases with each rung of the management ladder, says the CMI, with male
salaries already almost 25% higher than women's before bonuses are even taken
into account.
Male managers'
earnings across all levels are rising faster than women's for the first time in
five years, according to the study, while male directors' earnings rose 5.3%
over the last year, compared to just 1.1% for female directors.
The gender pay
imbalance has remained in place despite the 1970 Equal Pay Act being in force
for several decades.
Experts give differing
opinions below on whether equal gender pay should be enforced and how the gap
should be addressed.
Charlotte Bowyer, of the Adam Smith Institute
The gender pay gap
persists for complex reasons, and legal enforcement of equal pay risks harming
women.
Sexism does exist in
the workplace: some employers undervalue less traditionally
"masculine" attributes and skills, leading them to compare women
unfavourably against conventionally "male" skills. But that isn't the
only reason for the pay gap. Less women occupy senior positions, which can be reflected
in terms of bonus payouts, whilst women are less likely than male counterparts
to single themselves out for rises and financial rewards.
Women can also be
costly to employers in terms of maternity leave, getting "back up to
speed" and higher days off dealing with domestic emergencies. Lower pay
can therefore compensate for the opportunity costs sometimes incurred when
hiring women.
Blunt enforcement of
equal pay doesn't address these problems, and can instead have the perverse
effect of discouraging employers from hiring women. If taking women on simply
becomes more expensive, some employers will be less inclined to do so.
Addressing the gender
pay gap should be a social issue and not a legal one. The market is amoral and
well-intentioned attempts to make it fairer will fail if they come from the top
down.
As having women in
senior corporate positions becomes less of a novelty and more of a given,
workplace discrimination is likely to diminish.
Furthermore, shifts
towards flexible childcare choices and increased paternity leave uptake are
likely to level the playing field and reduce "maternity risk".
Enforcing equal pay
does little to tackle the reason behind pay inequality and can easily be
invasive, costly and distortionary. It's an easy answer, but it's the wrong
one.
Geraldine Healy, professor of employment relations at Queen Mary
Although individual
pay is shrouded in secrecy, it is well established that the gender pay gap has
been resilient over time, despite improvements claimed in recent years.
The overall pay gap is
19%, 15% for full-time workers but 34% for part-time workers. Given we have had
an Equal Pay Act in force since 1975, we have to conclude that legislation has
not been sufficient.
The problems with the
Equal Pay Act lie in its construction and implementation, not in its intention.
The law has required greater diligence from the public sector through the
Gender Equality Duty and now the Public Sector Equality Duty requirements,
which should also cover the private sector.
The introduction of
fees to take a case to tribunal in July 2013 has made implementation more
difficult. Individual claimant costs to lodge equal pay and discrimination
cases are now £250 plus an additional £950 to hear a case, prohibitive for all
but the well-paid. The current legislation is loaded against the claimant who
needs huge courage and tenacity to pursue an equal pay case.
There is little doubt
that the law is important and needs to be strengthened and simplified for it to
be effective. However, the underlying institutions of the law need to be more,
not less, accessible.
It is undoubtedly the
case that, unless we have greater transparency in pay and in bonuses in both
the public and the private sector, the prospect of equal pay remains a laudable
aim rather than a target to be achieved. Thus equal gender pay regulation, not
voluntarist approaches, remain essential and should be protected and
strengthened, not diluted.
I would prefer the
market to decide. I do certainly agree with equal pay for equal work, and I've
done that throughout my career, but I'm not too certain that I like the idea of
legislation to enforce it.
Then you start getting
quotas, saying you have to have "so" many women and "so" many
men. I'm not sure that by forcing quotas necessarily means you get the right
person.
When you give somebody
an increase [in salary] you do it for performance purposes hopefully, and that
is obviously very subjective - and if you start saying equal pay then you're
really saying: "Forget the idea of doing performance-related pay - just
scrap that and give everyone the same salary," and I don't agree with that
either.
The only thing I can
think of is maybe something along the lines of companies getting certain tax or
capital gains advantages, according to the percentage of the women they employ
- in certain bands or certain categories - and the differential in average
salaries between the male and female side. [You could] give the company some
sort of tax advantage or, if you like, disincentive if the gap is too wide.
I think it's better
done with a carrot rather than a stick.
Sophie Goddard, of Cosmopolitan magazine
Laws on equal pay have
existed for more than 40 years, but women are still paid less than men - and
it's getting worse. At the current rate of change, a baby girl born this year
won't achieve equal pay until she's 97 years old.
Something obviously
has to be done - no woman should be paid less than a man doing the same job
simply because she's a woman.
But I don't think
enforcing equal pay is the answer - comparing jobs and salaries across the
board is mind-bogglingly complex and it's never going to be as simple as giving
both sexes who share a job title the same salary.
Last year, Cosmo ran a
campaign calling on the government to make equal pay auditing compulsory. If
companies employing 250 people or more had transparency operations in place,
sharing the average wage of women employees compared to male employees (say on
companies' websites), then we could finally begin to tackle the problem.
After all, if we can't
see how much less women are getting paid on a smaller scale, then how are we
expected to take measures to close the gap? It's by no means a simple solution
and needs to be paired with things like flexible working hours and better
sponsoring and mentoring for women in the workplace. But it would be a good
start.
Suzanne Horne, partner at law firm Paul Hastings LLP
Notwithstanding almost
40 years of legislation and case law, the difference between men's and women's
average earnings is still 20.2%. Therefore, the report today by the CMI comes
as no real surprise.
In 1975 the government
implemented the Equal Pay Act 1970 in line with European Treaty obligations. It
was replaced by the Equality Act in 2010.
Over the years, there
have been notable cases where the legislation has been enforced but case law is
still developing even decades later.
Only last year, a
hugely significant ruling by the Supreme Court found that female workers of
Birmingham City Council could have six years from termination to bring their
claims in the High Court, rather than six months if the claim is before an
employment tribunal. The claim arose from the fact that they were denied
bonuses paid to male workers.
The decision means
that the Council had to pay millions of pounds in back payments but it sets a
precedent that can be applied to others, right up to female senior executives
at board level.
After all of these
developments, why then do we not have pay equality?
The answer is that a
legal rule alone will not result in permanent cultural change. There needs to
be business-led initiatives to drive a change in attitudes and pay practices.
The solution to this from the companies' perspective is merit-based pay
(whether salary or bonus) that stands up to objective scrutiny.
If they are not willing to do this, then they leave themselves
exposed to the risk that the women can decide if they wish to enforce equal
gender pay in the courts.
Anna Bird, deputy CEO of The Fawcett Society
Today's CMI survey
shows that even when women have supposedly "broken through" the glass
ceiling, they still face entrenched discrimination when it comes to pay.
Women at all levels of
the workforce face a lifetime of earning less than their male counterparts - on
average, women in the UK earn about 15% less than men. That means that for
every £100 men take home, women are typically earning about £85.
A range of things
contribute to the pay gap - these include the undervaluing of "women's
work", where jobs traditionally done by women are generally less well paid
than those where men dominate, a lack of flexible work opportunities - this
means mothers, who still tend to do the bulk of unpaid caring for children, can
find it hard to combine paid work with family responsibilities.
A sizeable proportion
of the gap can be attributed to plain old discrimination - where women are paid
less than men for doing the same work.
This disparity in pay
is one of the starkest indicators of how far we have to go before we achieve
equality between women and men. The UK
lags behind much of Europe on this issue.
Stamping out this
injustice once and for all means ushering in a more modern approach to work
with greater access to flexible models of working, a more open and transparent
culture around pay, and more effort to ensure women are enabled to play a full
role in the workforce.
Given the lack of
progress in narrowing the gap in men and women's pay, the government should
show leadership on this issue. The coalition's action to increase access to
flexible working and shared parental leave is a step in the right direction and
signals to businesses that they must also do their bit. The Fawcett Society
would urge the government to match this with similar action on pay
transparency.
