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What is the gender pay gap?

We hear about the gender pay gap a lot in the media – but what does it really mean and how bad is it? Here’s a straightforward guide to get you up to speed…

Yes it’s the 21st century, but we’re still a long way off achieving true equality in the workplace. Research has shown that women, ethnic minorities and disabled workers are all paid significantly less than other groups, and that white, non-disabled men still dominate senior management positions in many industries.

Shockingly, women are paid around 17% less than men in the UK. Last year, 10th November marked Equal Pay Day; the day women effectively start working for free relative to men because of the gender pay gap. That’s a whole 51 days of unpaid work.

It’s an issue that affects everyone from recent graduates to senior workers – in fact, Save the Student found that the gender pay gap begins even at university, with women anticipating a salary £3,325 less then men.

But tackling pay gaps is a lot more complicated than just paying everyone the same – there’s a whole range of factors that create them. Here’s your complete guide to exactly what pay gaps mean, why they exist and most importantly, what is being done about them.

What is the gender pay gap?

It’s important not to confuse the gender pay gap with equal pay.

People often assume the gender pay gap is caused by men and women getting paid different amounts of money for doing the same job – while this is part of the problem, the gender pay gap is a much more complex issue.

What’s the difference between the gender pay gap and equal pay?

  1. Equal pay As stated in the Equality Act 2010, it is illegal to pay men and women differently for performing equal work
  2. The gender pay gap – This measures the difference between men and women’s average earnings across an organisation or the labour force as a whole.

Equal pay is a legal issue, while the gender pay gap is a much broader problem in society.

This basically means that the gender pay gap is caused by much more than men and women being paid differently for the same jobs – factors such as the different types of jobs men and women tend to work in also play a big part.

A range of different factors contribute to this, including the different types of work men and women do, the seniority of roles, the difference between full-time and part-time work, socio-economic status, attitudes to maternity leave and much more.

Is there a gender pay gap in the UK?

People have lots of different opinions about the gender pay gap in the UK, and some will claim it doesn’t actually exist at all.

However, research shows that the gender pay gap in the UK very much exists, with The Office for National Statistics (ONS) reporting:

The official figure for the gender pay gap stands at 17.9%, based on the mean average hourly earnings of all workers, both full-time and part-time.

This basically means that for every £100 a man earns, a woman earns £82.60. While this is an improvement on previous years, it’s obviously still a shocking figure and change is very much needed.

This gap is also far larger if a women is also part of a minority ethnic group or disabled, as will be explained below.

Why does the gender pay gap exist?

There is a wide range of reasons why the gender pay gap exists – it’s not just about pay itself, it’s about the kind of jobs women tend to do and their working habits in comparison with men. Here are some of the biggest factors:

  1. Part-time work

    According to the Office for National Statistics, 41% of women worked part-time in April – June 2016, in comparison to just 12% of men. For both men and women, those working in part-time work tend to get paid less per hour than their full-time colleagues.

    Women choose to work part-time for a number of reasons, but one of the main ones is for childcare. Which leads us on to…

  2. Having and caring for children

    The statistics show that even though the gender pay gap does exist among younger workers, it gets significantly larger for those aged 40+. This is most likely due to women leaving or reducing their time in the workforce to have children.

  3. Industry

    We all know there’s no such thing as ‘girl jobs’ and ‘boy jobs’. But some occupations are dominated by a certain gender, and the earning potential between sectors can vary.

    For example, women dominate the caring and leisure industries, where they earn less than those who work in management or director roles – and these are roles that tend to be dominated by men.

While these factors explain why the gender pay gap exists, they shouldn’t be taken as excuses to explain away the gender pay gap. It’s still a problem and needs addressing, but the solution clearly isn’t as simple as just paying men and women the same.

Childcare provision, attitudes to maternity leave and parenthood in the workplace, increasing accessibility in certain industries and much more is needed in order to tackle this problem.

How is the gender pay gap calculated?

As you can imagine, calculating something as complex as the gender pay gap isn’t exactly straightforward, and figures vary depending on what method is used.

For example, you’ll see different numbers cited depending on whether the average is calculated as a median or mean, or whether part-time jobs have been included.

The official figure is based on the average hourly pay of workers, excluding overtime hours. It is presented as a percentage of men’s earnings, which can be a little misleading. If the pay gap was at 30%, for example, women would be earning 30% less than men.

The gender pay gap can be recorded in a couple of different ways, which is why you might see variations of official figures. This is because sometimes it’s reported as the mean average, and sometimes as the median average. So, what’s the difference?

Median

The median is recorded by sorting all female employees from lowest to highest paid and selecting the employee directly in the middle. The difference between that employee’s salary, and the median male’s salary becomes the gender pay gap.

Mean

The mean is recorded by adding up the wages of all employees and then dividing that figure by the number of employees. Again, the difference between that and the mean male salary becomes the pay gap.

This method can skew the results, however, if there is a small group of people in very well or poorly paid positions.

As a result, the median is often considered a more accurate representation of the gender pay gap, and that’s why we’ve used it here.

The numbers given represent a percentage of men’s income. So for example, if the average gender pay gap at UK universities is 18.4%, that means women earn 81.6p (18.4p less than £1) for every £1 a man earns.

Is there a graduate gender pay gap?

A lot of people think of the gender pay gap as something that won’t affect them until they’re much older. But our National Student Money Survey found that the pay gap can have an impact before you even enter the workforce.

We asked over 3,000 UK students to estimate how much they’re anticipating their starting salary to be when they leave uni.

Both men and women students are expecting salaries well below the national average, but women are predicting salaries £3,129 less than men.

Other research has shown that across almost all degree subjects, women are earning less than men in the first year after graduation. Even in nursing, a subject dominated by women, men were typically earning £2,000 more after graduation.

Some of the highest pay gaps were in subjects typically dominated by men, such as engineering and computer science. In engineering and technology for example, women are on average earning £4,300 less than men five years after graduation.

Reports also show that Pakistani, Bangladeshi, and Black Caribbean women graduates face some of the worst pay gaps.

University gender pay gaps

Gender pay gap data share

In 2018, all companies with over 250 employees were legally required to record their gender pay gaps for the first time in history.

You can search the results of all the companies here, where you’ll find everyone from Disney to Deloitte. There’s over 10,000 companies in total, reporting the pay of over 15 million workers.

The results show that 8 in 10 companies pay men more than women, with construction, finance and insurance, and education reporting the largest gaps.

The reporting is a crucial first step in naming and shaming the worst offenders and forcing companies to look at ways to tackle inequalities in the workplace.

This new knowledge should hopefully empower employees at companies with a large gender pay gap to make internal changes and suggestions to drive change.

However, it remains to be seen whether this will have a direct impact on reducing gender pay gaps at these companies.

The data needs to be updated annually though, and with it being so readily available to the public, it’s in the companies’ best interests to make improvements and avoid damage to their reputation.

What’s the gender pay gap at your university?

For the first time in history, all universities in the UK have been legally required to record their gender pay gaps – and the results make for interesting reading.

York St John University and Harper Adams University came out worst, each having a gender pay gap of 37.4%.

Other unis to feature in the top 10 worst offenders list include the University of East Anglia, the Royal Veterinary College and the University of Hull, with pay gaps ranging from 27.8% – 34%.

The only Russell Group university to appear in this top 10 is Durham University, with a pay gap of 29.3%, while University College London was the Russell Group with the smallest gender pay gap at 8.9%.

However, Russell Group universities reported an average gender pay gap of 16.7%, suggesting that research-intensive universities have a particular problem with gender inequality.

Based on these reports, the average gender pay gap across all universities stands at 18.4% – almost double the national average of 9.7%.

The only universities who pay women more than men are The University of Law and The Royal Central School of Speech and Drama, with gender pay gaps of -2.5% and -1.9% respectively.

Every university reported a higher proportion of women in their lower-paid quartile of workers, but even those universities with more women than men in their top quartile still had gender pay gaps.

In the case of York St John University, 55% of employees in their top quartile are women, yet they still have the highest gender pay gap.

University gender pay gaps ranked

What are universities doing about their gender pay gaps?

Although all universities were legally required to report their gender pay gap data, commenting or explaining what they were doing to tackle it was optional.

That said, a number of universities have issued statements addressing the issue.

A spokesperson for York St John University, which has the joint highest gender pay gap out of all universities, defended its figures.

The Vice-Chancellor at Harper Adams University, an institution which specialises in agricultural and rural disciplines, also explained why the university has the highest gender pay gap.

Interestingly, this is not an issue faced by the Royal Agricultural University, which recorded a gender pay gap of 0%.

Durham University fared the worst out of all the Russell Groups, and their Vice Chancellor, Stuart Corbridge, stated the university’s commitment to tackling the issue.

Clearly, the government hopes that by making the data public, organisations will be encouraged to take steps to rectify the situation and improve their standing.

Some universities have already stated plans of action, such as the London Business School. LBS is taking measures to increase the number of women in tenure positions and has created a ‘family-friendly task force’.

However, it remains to be seen what direct action will actually be taken in most cases.

How do universities compare to other sectors?

When looking at the full results of the survey, the education sector’s median pay gap ranks the third worst out of all industries.

While the university pay gap averages out at 18.4%, the education sector as a whole has a pay gap of 19.5%, which ranks just behind the worst offenders in the country.

The sector comes in third behind construction (24.8%) and finance and insurance (22.1%).

Some of the sectors with the lowest gender pay gaps included accommodation and food services (1%), health and social work (1.6%) and administration and support services (6.7%).

What about the other pay gaps?

bme and disability pay gaps

So remember earlier when we said that black and minority ethnic/disabled workers face even harsher discrimination?

BME workers are often paid significantly less, particularly black women and women of colour. Pakistani and Bangladeshi women are reported to face a 26% pay gap in comparison to white British men, while black African women experience a gender pay gap of 19.6%.

BME and disabled workers also face serious under-representation at universities. According to statistics collected by charity Advance HE, only a small segment of university professors were from BME backgrounds.

Don’t believe us? Well, the figures don’t lie.

In the 2016/17 academic year, there were just 25 black female professors out of a total of about 19,000, while white women made up 4,735 of all professors. 14,000 white men were recorded as working professors, while only 90 were black men.

According to figures provided by the BBC, on average, compared with white male professors:

The disability pay gap in the period 1997 – 2014 was 13% for men and 7% for women (this is based on median rather mean average pay – the current gender pay gap equivalent stands at 9.1%).

Unfortunately, figures regarding the disability pay gap at universities are scarce for the time being.

What can we draw from this? Well, while recording the gender pay gap is a great initiative, and it needs to be extended to include other social groups if we’re to achieve true equality in the workplace.

How you can help to close pay gaps

Pay gaps based on gender, ethnicity or disability aren’t going to disappear overnight. It’s going to take employers, educators and the government coming together to create some real change.

We need better education, awareness and shifting attitudes to create real equality and fairness, but now that thousands of companies are being legally required to reveal their gender pay gap for the first time, the first steps are being taken.

However, we can all do our bit to help close these pay gaps. If you or someone you know thinks they’re being affected by an unfair pay gap at work, always report it to your manager or HR department.

Talking more openly about our salaries will also help. People often shy away from talking about pay, but this only allows pay gaps to continue. Pay gaps can only be called out and challenged if people know they exist after all.

Finally, we can all do our bit to help and support each other in the workplace. While we need the government and employers to take real action, helping those around us where possible can help create a more inclusive atmosphere.

Speaking up about pay gaps takes confidence. Build yours by reading our guide on what to expect from your first job!