Written by 11:01 am Money & Lifestyle

Equal Pay Day: The gender wage gap means women are essentially now working for free

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Equal Pay Day this year falls on Friday 20 November, symbolically marking the time when women in the UK effectively start working for free thanks to the gender pay gap. 

Researchers use the full-time mean average gender pay gap to calculate the date and this year it looks like the UK’s pay gap has reduced – down to 11.5% from 13.1% – meaning that Equal Pay Day is almost a full week later than in 2019. 

On the surface this is good news. It’s progress. 

But it’s also tentative. On releasing the data, Sam Smethers, CEO of the Fawcett Society, says, “We only have a partial picture because the impact of coronavirus means a quarter of employers are missing from the data set. They are likely to be the ones hit hardest by the pandemic. Even on the figures we do have, we will need to wait until next year to know if there really has been a significant fall. The short-term impact of furlough also makes the figures less clear.” 

New research, released on Equal Pay Day by the Fawcett Society, shows that 43% of working women saying they are worried about their job or promotion prospects due to the pandemic. However, it also shows that whilst over a third (35%) of working mothers say they have lost work or hours due to a lack of care childcare, it also reveals that the amount of time fathers spend caring for their children has doubled during the pandemic and many want to play a greater role in parenting.

It’s also worth noting that in April 2018, the government brought in new legislation that forced companies with over 250 employees to report gender pay gaps within their businesses. The findings for 2019 were grim, to say the least. Around 80% of UK firms were found to pay men more, on average, than women. A quarter of those companies and public sector bodies also had a pay gap of 20% or more in favour of men.

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Yet on March 24th 2020, the day after the UK went into lockdown, the government quietly suspended pay gap reporting. This was despite being only two weeks away from the annual deadline. 

As a result, nearly half of 10,000 eligible employers chose not to submit their figures this year. The Financial Times, doing their own analysis of the 5,822 businesses that did submit their figures, revealed an increase in the average gap between what men and women are paid, from 11.9% to 12.8% in the year to April. 

The fact is that Equal Pay Day this year throws into sharp relief the impact of Covid-19. Whilst the gender pay gap isn’t all down to pay discrimination (paying a woman less than a man for work of equal value), it is a very good reason to talk about pay (in)equality. Especially now. 

We’re headed into a recession. We’ve had a year of turbulence and unrest and protests. Women are significantly more vulnerable to the economic impact of the pandemic than men. This is even more true in Black, Asian and minority ethnic communities, where women are said to have been hardest hit by the financial and psychological fall out from Covid-19.

So what can we do this Equal Pay Day to ensure that the result of the pandemic is not to turn back the clock by a generation? How can we take this reminder of the gender pay gap and make sure that next year, Equal Pay Day doesn’t fall earlier in the year instead of later?  

Tackling equal pay starts with talking about our salaries 

If you find talking about money awkward, it’s fair to assume that you probably don’t particularly like talking about what you earn either. 

And that’s fair enough. 

For most of us, discussing our salaries is considered not just uncomfortable, but uncouth. It’s something we’ve been taught never to do, like asking the age of an elderly aunt. 

But the manners around money – that ingrained politeness that encourages us to avoid conversations about pay – don’t actually help anyone. They hold us back from reaching pay equality across genders, ethnicities, social class and ability. They allow pay discrimination to continue despite the Equal Pay Act (1970) being over fifty years old. They protect a false narrative around economic opportunity. As Katica Roy, an gender economist told Sophia Bush on the Work In Progress Podcast, “You can’t hold back a segment of the population and then have positive economic outcomes. The maths doesn’t work.” 

Yet, by minding our manners and not talking about salaries, we keep obscuring that bad maths. It allows the issue of pay inequality to continue on and perpetuates issues like the wealth gap in turn. 

There’s power in knowing the value of your work and that of others.

Since pay gap reporting started, many people I know have spoken to me about their experiences with pay inequality. One friend told me that she’d learnt she was earning nearly £10,000 less than a male colleague at the same level. Another found out after her promotion that she was earning significantly less than junior teammates, despite receiving and initial raise. Another was offered a senior role at a startup but was being denied her salary expectation despite knowing they paid several people of the same level that fee despite having less experience.  

Every story I’ve heard is defined by frustration and anger and hurt. But in these examples, every single one of the women was able to turn their situation around because they were able to work out what they should be earning and decided to fight for it. They spoke to their colleagues, their peers at other companies, their friends. They checked out Glassdoor and read up on the legislation. In the first two cases the women were eventually given their raises, one with back pay. In the last, she decided to take her knowledge to another startup where she was given the money she wanted and wasn’t being patronised about her ability.  

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Of course, not everyone feels able to fight unequal pay. 

Around half of women who responded to a survey by the Young Women’s Trust said they wouldn’t want to question their employer over their salary. 

But no wonder – the fact is that in many cases where women suspect pay discrimination, the act of challenging their employer can feel like a choice between having less money or no money. This is an issue of power – with women from lower and working class backgrounds, black women, minority ethnic women, and disabled women facing the toughest imbalances of power. The pay gap for people with disabilities is 20% in the UK, meaning their Equal Pay Day was recognised in mid-October. Black and minority ethnic women continue to experience bigger pay gaps than white women, with figures suggesting that black women won’t see equal pay until 2124 and similarly ensuring their Equal Pay Day would be earlier than that of ‘women on average’. 

Sam Smethers says the Fawcett Society’s data also demonstrates that Black, Asian and minority ethnicity women are the ones who have suffered disproportionately, revealing that half (50%) of employed BAME women say they are worried about their job or promotion prospects due to the pandemic, compared to 35% of employed  white men. Sam comments, “We must recognise the racial and gender inequality that exists in the UK and how they intersect. This is why we need gender pay reporting by ethnicity.”

Intersectional feminism – particularly financial feminism – is essential. As 2020 and the Black Lives Matter movement has shown us, it’s vital that we recognise the different experiences of women from different backgrounds and the power imbalances that may mean it’s easier for a white, middle-class woman to fight for her right to equal pay than a black woman or a disabled woman. 

Equal Pay Day 2020 is another opportunity to reflect on the last year and recognise what we need to build back better from the pandemic. 

As the Fawcett Society’s Sam Smethers says, we are at a Coronavirus crossroads but there is potential to make the future better and more equal rather than taking us backwards. “Throughout the last century, crises comparable to the pandemic have been forks in the path of history. The Second World War gave birth to the welfare state; the winter of discontent led to a new Thatcherite era. The coronavirus crisis puts us at a crossroads again, and it is clear that this applies to the gender pay gap.”

Katica Roy said on the Work In Progress podcast, “We are putting it on women to basically put their economic security on the line in order to receive equitable pay. That’s madness.” And it is. 

We need to shift the balance so that women are not disadvantaged by seeking pay parity. There are ways to do this through salary transparency and breaking the taboos around talking about money. We can find out the facts for ourselves by talking to male co-workers and friends, and we can pay attention to the data

We can hold ourselves to account. In the same way that pay gap reporting is something we should demand of more businesses, we can advocate for greater pay transparency – starting with ourselves. This means broaching that awkward conversation about salaries. It also means recognising wider inequalities across age, ethnicity and ability. If you feel able to, you may also want to look at ways to mentor younger women or support workplace initiatives that encourage diversity and gender empowerment.   

We must recognise that it’s not about “women vs men” too. Men are also held back by gender inequity. Women are only one half of the conversation and men are the other, with huge implications for men’s mental health and financial wellbeing. There’s also figures suggesting that for men from BAME backgrounds, the pay gap may even be wider than it is between men and women on average. 

Finally, we can campaign. There are initiatives like the Fawcett Society’s Equal Pay Implementation and Claims (EPIC) Bill that we can support. This bill hopes to update UK Equal Pay legislation so that women who suspect they are not getting equal pay will have the ‘Right to Know’ what a male colleague doing the same work is paid. This would give women the opportunity to resolve equal pay issues without having to go to court. It would also demand that all companies with over 100 employees would have to report the gender and ethnic pay gaps. Given that 40% of people in the UK apparently didn’t know that women have a right to equal pay for work of equal value, this seems like a positive step towards women’s financial empowerment. You can show your support for Right To Know by signing the petition on Change.org.

At ikigai, we’re trying to build a gender equal company and we believe in the power of financial feminism. This week, as we acknowledge what Equal Pay Day means for the conversation around women and wealth, let’s also recognise the crucial role that all of us play at an individual level, business level, and social level. 

After all, wouldn’t it be nice if one day we could celebrate Equal Pay Day on the 31st December?  

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Maurizio & Edgar, Co-Founders, ikigai

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Last modified: 2 December 2020