Time to Question If There Really Is Equality in U.K. Pay Gender Pay Gap

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(Bloomberg Gadfly) -- Britain's recent survey of the gender pay gap found -- surprise -- that the system tilts overwhelmingly in favor of men. But many companies were quick to point out that a gender pay gap isn't the same thing as pay inequality. They insist men and women in comparable roles are rewarded equally -- as the law requires.

The reason for the gap, they say, is due to the distribution of their workforce: there are more men in senior, higher-paid roles. While women languish in junior, lower-paid functions -- or work part-time -- the overall figures will tilt toward men. The handful of companies that provided numbers adjusted to account for working patterns, role mix, maternity leave and other leaves of absence show a reduced gap.

So, do companies discriminate? At this point, we only have their word that they don't. A look at data from the U.K.’s Office for National Statistics is suggestive. If you compare median hourly pay for full-time employees (excluding overtime) by age and occupation, you can start to take into account those structural reasons why women are traditionally on the losing end in pay.

The gap is small for younger employees and gets larger as workers age -- possibly due to the accumulation of experience, which adversely affects women who leave the workforce after giving birth. Even in occupations where women dominate, such as in caring and administrative roles, men still earn more than women on a median basis. And in high-level positions, male managers, directors and senior officials are paid more than their female counterparts.

To be clear, these data -- gathered from tax records representing 19 million full-time jobs -- are suggestive, not conclusive. The ONS says they don't provide evidence of pay inequality. For one thing, they compare similar occupations and not specific roles. They don't account for geography, tenure, sector or company size.

This lack of clarity only highlights the need for more transparency about compensation. It’s tricky because there is a risk of legal liability here: companies have a powerful incentive to emphasize fairness in their pay structures because of U.K.’s equal pay laws. Little surprise, then, that most are less than keen to talk about this.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Elaine He is Bloomberg Gadfly's data visualization columnist in Europe, focusing on business and markets coverage. Before joining Bloomberg, she was a graphics editor at the Wall Street Journal and the New York Times.

©2018 Bloomberg L.P.

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