From the TUC

Public sector job cuts and pay freezes can only mean one thing for the gender pay gap

08 Dec 2010, by in Equality, Labour market

At a time of seemingly relentless bad news stories for women, a narrowing gender pay gap represents a very welcome chink of light. The Office for National Statistics reported today that the gender pay gap has fallen by almost a whole percentage point to 15.5%, based on the mean average earnings of full-time workers.

It’s great when when an unexpected piece of good news comes along but we can’t afford to be complacent about the huge gulf that still exists between men’s and women’s earnings.

The ONS figures provide a timely reminder of the stark difference in the size of the gender pay gap in the public sector (10% for full time employees) compared to the private sector (19.8% for full time employees).  The median hourly wage for a woman working part-time in the private sector is just £6.96 – barely a pound more than the minimum wage (currently £5.93).

With women comprising approximately two thirds of employees in a public sector which is set to haemorrhage hundreds of thousands of jobs over the next few years, it’s clear that the narrower gender pay gap seen in the annual survey of hours and earnings (ASHE) today is likely to be short lived.

Come next April when the ONS takes the next snapshot of earnings, many thousands of women in the public sector will have already lost their jobs and the narrowing of the gender pay gap is likely to have stalled.

The Government remains optimistic about the ability of the private sector to provide employment for the hundreds of thousands of newly redundant public sector employees. Even if it is true that the private sector will come to the rescue – a scenario that seems increasingly unlikely given that recent CIPD/KPMG survey of employers found that 30% of private sector employers were planning to cut jobs in the next three months – how many of those women seeking employment in the private sector will find themselves on the median part time rate mentioned above of just £6.96 per hour?

Earlier this year, a study by Chartered Management Institute and XpertHR found that male managers still earned £10,000 more than their female counterparts. The IT industry came out of the report particularly badly with women on average getting paid £17,736 per year less than men. The pharmaceutical industry generally paid its female workers £14,018 less than males. Indeed at the current rate of progress, the report found that it would take 57 years for women to achieve equal pay in the UK.

Lynne Featherstone commented last week that the government was scrapping plans to compel employers to publish pay data because:

“We want to move away from the arrogant notion that government knows best, to one where government empowers individuals, businesses and communities to make change happen”.

Yet the figures published today remind us that, left to their own devices, “individuals, businesses and communities” are either not able or not willing to take steps to close the gender pay gap. In 2008 Lynne Featherstone herself admitted that “a voluntary audit system for private industry is hardly worth the paper it’s printed on.”

The fact that the gender pay gap in the private sector remains nearly twice as great as the gender pay gap in the public sector just goes to show that “empowering businesses to make change happen” simply isn’t enough.

2 Responses to Public sector job cuts and pay freezes can only mean one thing for the gender pay gap

  1. gerontius
    Dec 8th 2010, 7:56 pm

    The public-private difference is startling, as are the implications for developments in the economy-wide gender gap that you have pointed to. Why is the gender gap in the private sector so much worse? Is it because private sector employees have a lower rate of unionisation?

  2. Jonathan Green
    Dec 13th 2010, 10:40 am

    A couple of additional points on the ASHE figures:

    Although the table for full-time mean weekly earnings shows that women’s gross pay has risen slightly faster than men’s (2.4% & 1.6% respectively), when you look at the sub-totals there has been a significant growth in male additional earnings compared with women (8% compared with 1.2%). Overtime, bonuses and shift pay have all picked up reflecting the recovery in the economy. This is also shown by a growth in men’s weekly paid hours which have increased by 0.3 hours compared with an increase of just 0.1 hours for women. But there has been a drop in part-time hours over the last year, which impacts more on women than men. At the moment these effects are balanced out by the growth in earnings excluding overtime which has reduced the gender pay gap, but as your article points out, the impact of the public sector pay freeze and the cuts will impact more on women and as a result is likely to reverse this trend in future years.