Viewpoints: Should equal gender pay be enforced?
- 20 August 2013
- From the section UK
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.
Roger Ellis, of the British Business Alliance
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.