Women earn £300,000 less than men over working life

Gender pay gap

Women are likely to earn £300,000 less than men over their working lives, according to a new analysis that has sparked fresh calls for more shared parental leave to close the UK’s stubborn gender pay gap, reports The Guardian.

Before International Women’s Day on Tuesday, figures show a gap of £5,732, or 24%, in average full-time annual salaries between women and men – more than four decades after the Equal Pay Act of 1970 was introduced.

Over a career of 52 years, that gap translates into a lifetime earnings shortfall of £298,064 for female employees, according to the analysis by the recruitment company Robert Half.

The Fawcett Society, a women’s rights organisation, said the analysis was the latest evidence of a financial price paid by many women after having children.

“The gender pay gap becomes a significant lifetime pay penalty. The gap widens for older women and becomes a significant pensions gap in retirement,” said the Fawcett Society’s chief executive Sam Smethers.

“The impact of having children means that as men’s careers take off, women’s often stagnate or decline,” she said.

“Their salaries never fully recover. We have to make it easier for men to share care, create flexibility first at work and open up more senior roles as quality part-time jobs.”

The analysis by Robert Half also highlighted faster growth for men’s full-time salaries of 1.6% compared with 1.4% for women in the year to April 2015, based on earnings figures from the Office for National Statistics (ONS).

That took the median gross pay for full-time male employees to £29,934, compared with £24,202 for women. The average for men and women combined was £27,645.

Katy Tanner, a director at Robert Half UK, said there were important lessons for employers as they increasingly report skills shortages.

“As in-demand candidates continue to be in the driver’s seat, employers are needing to offer competitive remuneration and benefits packages above industry averages,” she said.

“International Women’s Day provides a platform to highlight the importance forrewarding all employees fairly on the basis of their contribution to the organisation, rather than their gender or indeed any other point of difference.”

While this new analysis puts the gender pay gap at 24%, the ONS estimates the shortfall is 9.4%.

The two measures differ because the ONS compares median hourly earnings – rather than annual earnings – and excludes overtime. It does this because overtime can skew results, given that men work relatively more overtime than women. Using hourly earnings better accounts for the fact that men work on average more hours than women, in the ONS’s view.

The pay gap of 9.4% in April 2015, the latest figure available, marked a drop from 9.6% in 2014 and was the lowest since records began in 1997 – but the ONS noted “the gap has changed relatively little in recent years”.

Commenting on the potential £300,000 lifetime gap highlighted in Monday’s analysis, the TUC general secretary, Frances O’Grady, said: “Far more must be done to tackle the UK’s gender pay gap. We need more quality part-time jobs, better-paid fathers’ leave and more free childcare from the end of maternity leave to help mothers get back to work after having children.”

A government spokesman said: “This government has gone further than ever before in tackling the gender pay gap. Only last month we unveiled a raft of measures requiring companies with more than 250 employees to publish their gender pay gap and we are extending that duty across the public sector.

“We are making progress with business towards the elimination of the gender pay gap. There will always be more to do but we expect that progress to continue as we continue towards a truly equal workforce in all sectors.”

David Cameron has vowed to “end the gender pay gap in a generation”, and last year set out new rules forcing every company that employs more than 250 people to publish the pay differences. The UK has also introduced shared parental leave, but equality campaigners are concerned too few families can afford for fathers to take it.

The UK has made headway in some respects on gender equality at work, according to separate research published on Monday that shows the country rising up a “women in work” league table.