Employment solicitor Alex Christen and HR Consultant Cathryn Foreman explain the Gender Pay Gap, and what it means for all generations in the workplace.
It won’t surprise readers to know that ‘generation millennials’ (i.e. those typically born in the 1980s) are benefiting from the lowest gender pay gap compared with their ‘generation X’ and ‘baby boomer’ counterparts. This is thanks, no doubt, to the hard work of previous generations in campaigning for equal rights – coupled with the trickle down effects of equal pay and sex discrimination legislation.
Recent statistics show that millennials in their 20s have a 5% average gender pay gap, which compares with a 9% gap experienced by generation X at the same age and a 16% gap experienced by baby boomers. While this seems promising for future generations, the gap significantly widens again as millennials hit their 30s – perhaps due to women having children and taking time out of the labour market before returning to work, quite often on a part time basis. Statistics show that at age 30, the pay gap is 9% for millennials – a big jump from the 5% gap that they experience up until then. But, it’s still less than the 10% for those in generation X, and the whopping 21% for baby boomers at that age.
What is clear is that progress has been made to close the gap. Some of the changes will be due to the increase in the number of women taking higher education courses and moving into careers which, in the baby boomer days, may have been primarily dominated by men and where work opportunities for women were for ‘administration’ or ‘support’. Clearly however, there is always more that can be done.
With mandatory reporting obligations coming into effect this April, understanding and analysing the difference in pay between men and women will be top of the agenda for many organisations. The revised regulations provide clarity on how businesses should report their gender pay gap data. Interestingly, women on maternity leave are now excluded from the reporting obligation if they receive less than full pay. This means the distortive effect of statutory maternity pay (or no pay) on figures is removed, allowing employers to concentrate on the differences in full pay between men and women. However, some would say that maternity pay figures should still be included in the overall pay picture.
Whether the improvement in the gender pay gap will continue with each generation entering the workplace remains to be seen. While it is perhaps the millennials that will benefit the most from the continued changes, that does not mean that the baby boomers in the workplace should not continue to campaign for a change in attitudes, opportunities and equality.
The gender pay gap has lowered to five per cent among UK workers in their 20s, according to a study by the Resolution Foundation. However, the discrepancy widens once women hit their 30s and start a family. The thinktank found that whilst the gender pay gap for women aged 20 to 29 has fallen to five per cent, as women’s careers go on, they will earn significantly less than men. When female workers get into their 30s and 40s, they face a "rapid rise" in pay inequality, a discrepancy of almost 30% by the time they are in their mid-40s unless there is further government intervention - the report says. Similar research published last year by the Institute for Fiscal Studies (IFS) found that men in their 30s tend to see their wages increase, while women's wages tend to plateau.