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Gender pay gap discrepancies – age dependent?

gender pay gapThe gender pay gap for full-time workers under 40 has closed to around 1%, so states a recent Government report, based on the results of the Annual Survey of Hours and Earnings from the Office of National Statistics (ONS). This survey monitored pay trends between 1997 and 2013 and shows the gender pay gap closed during this time for every age group except those over 60.

While this 1% is a positive, the discrepancy rises substantially when part-time workers are included in the statistics, which depict a much less positive picture. In 2013 the median pay gap, when part-time and full-time workers are combined, was 19.7%, up from 19.6% in 2012. The reason why the median pay gap remains so high is that there is a huge pay inconsistency between men and women in executive level roles and also a much larger proportion of women (43.2% compared with 13.7% of men) in part-time positions, which can often be subject to lower pay rates.

The ONS data also shows the increased part-time working across all sectors, with the number of people taking reduced hours because they are unable to find a full-time position having reached its highest level since 1992. The study also found that pay inequality tends to widen the higher the income with 7.2% for workers in the lowest 10th percentile of earnings compared to 23.4% for the highest.

Here are some of the key findings:

How does age affect the gender pay gap?

  • At 26.7%, the biggest gap in pay is among those aged 40 to 49 while the lowest gaps are for 18 to 21 year-olds at 3.5% and 22 to 29 year-olds at 5.3%.
  • For full-time workers, the pay gaps under the age of 40 are around 1%, but this climbs to 15.7% for 40 to 49-year-olds and 17.5% for 50 to 59-year-olds.
  • For part-time workers, women earn more up until the 40 to 49 year-old group, where men earn 7.5% more, climbing to 11.8% more when 60 and older.

Results by sector

  • The sector with the highest gender pay gap is the skilled trades, such as plumbers and electricians, in these male dominated industries it is up to 30%.
  • Women have more equality in sales, customer services and caring occupations where the difference is between 6.5% and 7%.
  • Professional services, including HR, stands at 9%.
  • The difference between full time and part time earnings was greater for men than women across all occupations except professional occupations, where part-time workers earned more.
  • At 20.2%, it is at manager and director level across all sectors where the pay gap is most stark.

Progress has clearly been made with men and women in their twenties and thirties now earning very nearly the same. However, whilst factors like ongoing gender discrimination and occupational segregation are still evident, they cannot be the only reasons for the notable pay gaps in the 40+ age categories.

It cannot be ignored that the continued gender pay difference is partly due to the different working lifecycles for a high proportion of men and women throughout their careers. Many men will work right through their lives to get to the top and build their salaries while women will often, for various reasons, take a break at some stage or choose to work either part time or flexible hours. This is likely to be connected with the fact that many women have children and the time taken out of the labour market, combined with career choices they make subsequent to this, may impact on their future earnings.

For that cultural reality not to be a factor in pay inequality would require a monumental change on so many levels. However, companies and the Government do need to be proactive in closing the pay gap at all ages and many positive steps are being taken to make this a reality. Many that have taken action believe that targets need to be set at all levels of a business for gender equality in pay as well as a balance in the gender split within organisations.

A couple of examples of note include the TUC, who have called for all new public sector jobs to be made part-time or flexible, so that women don’t have to “trade down”. And secondly, under the Equality Act 2010 more widespread disclosure of pay scales, although only in larger organisations, is already envisaged. Continued focus by all stakeholders on gender pay gaps at every level is critical to ensure that when the 2014 ONS survey results are published, we see this latest increase reversed.