Tackling the gender pay gap reduces other kinds of inequality too

Increased female participation can lead to more equal incomes across the board

 

From today until the end of the year, women effectively work for free. That’s the finding from the Fawcett Society, which has calculated that this year’s gender pay gap for full time workers stands at a ridiculous 14.2 per cent.

It’s a tiny reduction from last year’s gap of 15.7 per cent. If the pay gap were reduced at current rates, we would achieve parity in 54 years, by which time a young woman starting her first job now would already be drawing her pension.

Women are disproportionately likely to be in part-time work, which is itself skewed towards low-paid roles. When we take into account all workers, not just full-time, the gender pay gap rises to over 19 per cent.

This absurd unfairness needs to be addressed urgently so that women are justly rewarded for the work they do.

But there’s another positive effect of tackling the pay gap. Greater gender equality plays an important wider role in reducing overall economic inequality.

The UK has the fourth most unequal incomes of 30 developed countries, and our poor record has been noted by economic heavyweights who have joined up the problems of gender inequality and how economically divided a country is.

In September, the World Economic Forum identified our gender pay gap and relatively poor rates of female participation in the labour market as major barriers to inclusive growth. More recently, the IMF produced evidence that gender inequality and income inequality are strongly interlinked, even after controlling for other drivers of income inequality.

Greater inequality between men and women is strongly associated with higher income shares going to the already-rich top 10 per cent, and it also goes hand in hand with lower income shares going to the poorest 20 per cent.

There is broad agreement that policies like paid parental leave for both men and women, high quality affordable childcare, and of course equal pay, can set a country on the right track for the increased female participation that can lead to more equal incomes across the board.

So it’s positive that the government has legislated for statutory shared parental pay and leave, and is doubling its free childcare offer.

The effect of these measures on inequality reduction (both gender and income) remains to be seen, but in the meantime, we still have a very long way to go if women effectively stop getting paid eight weeks before the year is out.

It’s obvious that women matter for the shape of our economy: we’re half the population. But strong evidence that tackling gender inequality can help reduce income gaps for everyone and leads to healthy growth leaves even less room for political and business inertia.

Lucy Shaddock is Policy and Campaigns officer at the Equality Trust

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