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Reporting gender pay inequality is not the same as tackling it

Firms can get away with paying women less because they don't have to tell us what our colleagues earn

Jane Merrick
Tuesday 14 July 2015 16:36 BST
In a drive to 'end the gender pay gap in a generation', businesses with more than 250 staff will have to disclose the difference between the salaries of male and female employees
In a drive to 'end the gender pay gap in a generation', businesses with more than 250 staff will have to disclose the difference between the salaries of male and female employees (Rex )

In my first job I received £7,500 a year and a sharp lesson in the gender pay gap. A male colleague, I found out within a few weeks of starting, was on £8,500 a year – even though we had the same qualifications and had arrived at the firm within a few days of each other. I was furious, and so asked my employers why. The excuse was quite creative – my colleague had a car to run, while I did not. Did they not think I might have been able to afford a car if my salary had nudged closer to his?

The real reason, of course – even if it was a subconscious one on the part of my bosses – was because I was a woman. If you’ve never experienced this, let me tell you how it feels: it is humiliating and upsetting to find out that the company you’re working for thinks you are worth less than a man.

That was nearly 20 years ago, yet the gender pay gap still yawns widely today. Sure, it’s closed substantially since I cried over my first payslip, but women, even in like-for-like jobs, are still paid less than men. For full and part-time workers it is 19.1 per cent less, which means for every £1 a man earns, a woman gets 80 pence – the sixth largest pay gap between the sexes in the European Union. Women have a right to demand that extra 20p.

The fact that I knew my male colleague was on £1,000 more than me was unusual because we, as a society, have a terribly British attitude to talking about our income. While Americans are open about their pay packets, I wheedled the information out of him while we were in the pub. Firms can get away with paying women less because they don’t have to tell us what our colleagues earn, and we workers don’t like to talk about it.

Now David Cameron is to change that, by requiring companies with more than 250 employees to publish pay differentials between male and female workers. The difference published will be the average, so individual workers won’t be able to mount challenges against another employee.

The government will consult with employers about how much information is published – will it be percentages, or actual salaries? – and whether this done monthly or annually. But the Prime Minister, in the sort of bold statement he can only make mere weeks after winning an election, has pledged to use this information to close the gender pay gap completely within a generation, and this is admirable.

The CBI doesn’t like it, and would rather businesses carried on with a voluntary approach to the matter. Yet voluntary reporting has been around for five years and in that time just five companies – credit to Tesco, Friends Life, PwC, AstraZeneca and Genesis – revealed their pay gaps. It is clear that positive action has to be taken to get other companies to follow suit.

But while I applaud the government for doing this now, why did they not back this measure in coalition? The Liberal Democrats wanted mandatory reporting but were overruled by the Prime Minister in the last parliament. It was only after Nick Clegg, in one of his last acts as Deputy Prime Minister in March, got the House of Commons to force mandatory reporting within a year, did the Conservatives put it into their election manifesto. And why is Britain only doing this now, more than four decades after equality legislation was first published?

The government also needs to be more open about what will happen with the information once it is reported. There is a risk that firms will feel they have cleansed themselves of blame by merely reporting their pay gaps, rather than actually taking steps to close them.

Cameron, announcing this progressive policy in an article in The Times, claimed that reporting would “create the pressure we need for change”. But with publication must come action, or else the measure is meaningless: something like an annual audit, suggested by the shadow equalities minister Gloria de Piero, is needed.

It would be wonderful to think that wages for women will rise as a result of this move, but household incomes for the poorest families are set to fall because of the cuts to tax credits announced by George Osborne last week.

As women are the main beneficiaries of tax credits, the government needs to be wary that closing the gender pay gap in the workplace doesn’t just help out senior female executives in large firms.

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