Equal pay audits: the wrong tool in the box?

Once upon a time, a long, long time ago, a newly-elected Prime Minister claimed to have invented a wondrous thing: joined-up government. From now on, the purer-than-pure premier said, ministers and their departments would work together to ensure both that an initiative in one policy area would not have unwanted consequences in another, and that only the best and most effective policy tools were selected and prioritised to tackle any particular policy problem. But the years passed, a number of wars were launched, and Tony Blair gradually lost his enthusiasm for joined-up policy making.

This was unfortunate, as ‘joined-up government’ was undoubtedly one of Blair’s better ideas. For decades if not centuries, far too much government policy has been made in silos, with ministers in one department giving little if any thought to how policy ‘owned’ by other departments (or even just by other ministers in the same department) might be reformed or developed to help them achieve their own policy objectives. And, frankly, much the same can be said of many of the campaigning and lobby groups that seek to influence government policy.

This fundamental flaw in the policy process came to mind in recent weeks, with a set-piece speech on the gender pay gap by Gloria De Piero MP, Labour’s shadow minister for women and equalities, and a survey report on the gender pay gap among senior managers by the Chartered Management Institute and XpertHR, setting off a wave of outraged comment pieces and renewed calls for the introduction of mandatory equal pay audits for large employers (i.e. of the sort promised by Ms De Piero).

In the Guardian, noting that, at the current rate of change, it will take 60 years to close the current gender pay gap of 19.7 per cent, columnist Lauren Laverne posed the question: “we have to wait a hundred years for the 1970 Equal Pay Act to work? Are you on glue?” Meanwhile, over on the paper’s Women in Leadership pages, the first of Harriet Minter’s five proposals “to end the gender pay gap” was: “make reporting on pay data mandatory”. According to Minter, this would “bring an end to the madness” of “women being paid less than men”, and “guarantee a fair and equal wage for all”. And, noting the CMI/XpertHR finding that male company directors take home £21,000 more each year than their female counterparts, the Work Foundation’s Professor Stephen Bevan found it “hard to resist the conclusion that equal pay audits should now become mandatory”.

Hmmm. The problem with that line of argument is that it assumes – or, at least, conveys the message – that (a) the gender pay gap is all about women being paid less than men to do the same job; and (b) this is all due to wicked employers having gender discriminatory rates of pay. Accordingly – or so the argument runs – all you have do to close the gender pay gap is shame all those wicked employers into paying their staff equally by making them conduct and publish equal pay audits.

In reality, it’s a lot more complicated than that. Discriminatory pay by employers is just one of many factors behind the gender pay gap, and is quite possibly one of the least influential, overall (which is no consolation if you are one of the all too many women subject to such discrimination). As Professor Bevan notes, “a range of factors are frequently shown to have strong explanatory power, including occupational segregation (and a lower societal value placed on so-called ‘women’s work’), [and] the impact of part-time working both on pay itself and the life-time accumulation of ‘human capital”, as well as “both direct and indirect discrimination”. In 2012, research commissioned by the Government Equalities Office could find only 13 successful ‘equal pay’ employment tribunal claims against employers other than the NHS and local authorities in the three-year period 2009-11, and only 41 such claims between 2004 and 2011.

Furthermore, most if not all of those calling for mandatory equal pay audits are in fact proposing only that they be mandatory for large employers – that is, those with more than 250 employees. Yet such companies employ less than 10 million (40 per cent) of the national workforce of some 24.3 million. So equal pay audits wouldn’t bring any benefit to 60 per cent of the workforce.

Accordingly, as supportive as I am of gender equality and of tackling sex discrimination in the workplace, it’s never been entirely clear to me how or why mandatory equal pay audits would effectively address such a complex range of factors. Furthermore, even if such pay audits did eliminate gender discriminatory pay rates, a gender pay gap would still remain, due to the influence of other, arguably more powerful factors – not least the significant impact on women’s earnings of taking time out of the labour market to have and care for children.

As FlipChartRick demonstrates this week in a must-read blog post, the gender pay gap is not spread evenly among women of all ages and all pay brackets. Far from it. Citing analysis by David Richter of Octopus HR, FlipChartRick argues that “the full-time pay gap at the median has almost disappeared for those in their twenties, with women earning slightly more than men [on average] in recent years”. And “there has been a significant fall in the gender pay gap for those in their thirties”.

Moreover, while “the pay differential for those in their twenties is fairly narrow, even at the very top level [of pay], the pay gap for those over 40 is significant at all levels of the pay distribution but much higher at the top”. In short, “age and position in the earnings distribution has a significant effect on the gender pay gap. Women over 40 and/or in the upper income bracket earn significantly less”. That is, “the gender pay gap appears just at the point in the age distribution when many women have children” and “children have more of an impact on women’s pay than men’s” because it is women “who take on most of the childcare responsibilities”.

FlipChartRick concludes that introducing mandatory equal pay audits “might yield some interesting information for pay data geeks to pore over, but I doubt that it [would] tell us much that we don’t already know, or even whether it [would] reveal some major employers to be significantly worse than others. It is unlikely that the gender pay gap will disappear until equal proportions of women and men take equal responsibility for childcare”.

Which brings me back to my point about joined-up government policy-making. In recent weeks, as part of her “mission to promote shared parental leave”, a policy reform intended to make the proportions of women and men taking responsibility for childcare more equal, the BIS minister Jo Swinson has given a number of major media interviews – including in the Independent, the Evening Standard, and with Family Networks Scotland.

However, while Ms Swinson used these interviews to make much of “recognising that dads want to have a bigger role in their child’s life from the first days” and boosting parental choice, she signally failed even to mention the gender pay gap and the central role that shared parental leave (and more shared parenting) might play in closing it. And the Minister’s omission is even more surprising when one considers that, in the middle of her media push on shared parental leave, she also launched the Liberal Democrats’ campaign to “deliver equal pay in the workplace”. Which consists entirely of – you guessed it! – “plans to require large companies [i.e. those with over 250 employees] to publish the difference in pay between male and female workers”.

Of course, the nine months before a General Election is not the best time to find joined-up thinking within a government made up of two competing political parties, or even just within each political party. But perhaps after May 2015 both elected politicians and the relevant campaign and lobby groups will pay greater attention to the (rather obvious) link between the gender pay gap and the need for more shared parenting. And then we might just see progress on policies – such as increasing the shockingly low rate of statutory maternity and parental leave pay – that would help close the former while facilitating the latter.

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