The wage gap leaves women in part-time ghettos


Women make up nearly half of Britain's total workforce, thanks to a huge rise in our participation in the labour market during the past 20 years. Those years have coincided with the operation of equal pay and sex discrimination legislation introduced by the last Labour government.

The good news is that pay inequalities betwen men and women have shrunk during that time. The bad news is that they have not been eliminated. The lead of men's wages over women's has declined from a whopping 58 per cent in the early 1970s to around a quarter in the 1990s.

On top of that, there is new evidence of a growing polarisation in the jobs market between part-timers - mainly women but more and more men - and full-timers, men and women. In the late 1970s, part-time women's hourly wages were about 80 per cent of full-timers' pay. By the early 1990s they had droped to 72 per cent.

The gender gap has been overtaken by a status gap, and it has worrying implications for the British economy. The jobs market is polarising into a shrinking high-skill, high-pay full-time segment and a rapidly growing low-skill, low-pay part-time segment. This is not a sensible strategy for an economy whose most serious problem has been repeatedly diagnosed as a lack of skills.

A recent Department for Education and Employment working paper* written by two City University researchers analyses the pattern of pay for two groups of people for whom information on education, family circumstances and jobs in a particular year is available. The data gives a detailed snapshot of a large group of 32-year-olds in 1978 and 33-year-olds in 1991. Between those two years women's participation in work, especially part-time, increased dramatically. In 1978 nearly one in five women worked full-time and nearly as many part-time. In 1991, 23 per cent worked full- time and 58 per cent part-time.

Men in the 1978 group had a pay lead of 64 per cent on women, and 36 per cent on full-time women. Full-time women's pay was 40 per cent higher than for part-time women. By 1991 these gaps had changed, to 40 per cent, 20 per cent and 52 per cent respectively. Hourly wages for men were pounds 7.38, for full-time women pounds 6.14 and for part-time women pounds 4.04.

The authors, Pierella Paci and Heather Joshi, look at all the possible explanations for these changes furnished by economic theory and try to measure their separate contributions. Any parts of the wage gaps unexplained by the theories represent raw discrimination.

The central element of an economist's attempt to rationalise unequal pay is the notion of human capital. Workers are rewarded for their productivity, which depends on their educational attainments, other skills and job experience. More training and more experience build human capital, while episodes out of a job diminish it.

There was a marked improvement in these measures of women's human capital between the 1978 and 1991 groups. For example, among the first group - born in 1946 - 8 per cent of full-timers and 2 per cent of part-timers had a university degree, compared with 10 per cent of men. In the later generation - born in 1958 - full-time women were more likely than men to have a degree, at 17 per cent versus 15 per cent. But only 7 per cent of part-time women had qualifications at that level. There were similar increases in women's job experience and tenure between the two groups.

Not surprisingly, improving educational standards turn out to provide part of the explanation for the observed changes in wage gaps. Not very much, though - after all, full-time women are now better qualified on average then full-time men, but still get paid less. As the recent special women's issue of the New Yorker observed, there is no such thing as a glass ceiling - it is a very dense layer of men.

The DFEE paper therefore turns to the next possible theoretical explanation, which is that women and men have different sorts of jobs. Industries can have varying market structures and compensating job characteristics which could explain different wage rates. There are clearly "female ghettos" in the labour market. The highest concentrations of men are in industries such as engineering and transport. Full-time women are concentrated in finance and education. Part-time women are most concentrated in catering. Part-timers are also more likely to work for small firms.

Taken together with the human capital explanation, job characteristics help explain a lot more of the wage gap - especially the difference between full and part-time rates. However, a significant part of the gap between men's and women's pay remains unexplained.

Part of the remainder - a small part - is due to the well-known penalty to motherhood. While bosses often reward male employees for their parenthood with a pay rise, clever things, mothers' pay suffers. The authors note, however, that this decline in earnings power affects only women who quit their job. Those who take maternity leave and return to the same employer are not penalised.

These findings are fascinating in themselves but also lead to some important conclusions. First, even though sex discrimination in pay is not yet a thing of the past, employers have in full-time women a resource which is more skilled and productive than male employees. This ought to make firms keen to conserve their stock of female human capital by introducing family-friendly policies such as flexible hours, maternity leave and child care.

This keeness is, however, noticably absent. In today's tough labour market such measures are seen as unnecessary luxuries.

Heather Joshi observes: ``There is a clear trend towards casualisation and a cheap labour strategy. Government policy has favoured that strategy rather than the alternative of nurturing the quality of labour.''

This effect of labour market deregulation is at odds with the Government's repeated desire to see Britain compete effectively in high-skill, high- value-added industries.

Secondly, this trend means the pattern of employment is polarising between haves and have-nots. Ms Joshi says: ``To compete for secure and well-paying jobs, people on the inside are working themselves like crazy. People on the outside are insecure and badly paid. It reduces the quality of everybody's life and the quality of their work.''

Unfortunately, there is not much evidence that this increasing polarisation is slowing down - if anything, the reverse. There will be no change in the trend without government policies that encourage firms to enhance their man and woman-power rather than exploit it.

* Wage differentials between men and women, Pierella Paci and Heather Joshi, Department for Education and Employment research paper no. 71. Jan 1996.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Supporting role: at the Supreme Court, Rhodes was accompanied by a famous friend, the actor Benedict Cumberbatch
booksPianist James Rhodes on the extraordinary legal battle to stop the injunction of his memoirs
Arts and Entertainment
Jesuthasan Antonythasan as Dheepan
filmDheepan, film review
Steven Gerrard scores for Liverpool
peopleComedian star of Ed Sullivan Show was mother to Ben Stiller
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?