The Consequences of the Gender Pay Gap

 Lesley Brennan

Equal Pay Day  7 November 2013

The gender pay gap arises from several sources such as women being encouraged to participate in relatively fewer areas of employment, family caring responsibilities, the lack of suitable affordable childcare and the under-valuation of women’s work.

It is a measure of the difference in earnings between men and women.

It has both current and long term consequences for women.

In the present, many are struggling to live on meagre pay and to raise a family in dire economic times, clearly exacerbated by austerity cut backs in public expenditure and services.

They do not have the security that a comfortable job brings , and they cannot make choices in their lives while they do their utmost to make ends meet against rising prices, pay freezes and reduced hours of work.

Few can afford to save money for life in the longer term, and so a working lifetime of under-payment can mean a retirement built on uncertain finances.

In addition women are penalised by the “motherhood penalty” which can take various forms .

Women seek to balance family caring responsibilities with employment by choosing part-time work.

Success at work is put on pause to raise a family and the part-time work that is available may not be of the same quality as the previous full time job.

The median (middle) hourly rate of pay for women in Britain working part time at present is just over £8 per hour.

The Living Wage is currently £7.45 per hour outside of London , being the estimated amount a person needs to pay for a basic cost of living.

Consultants KPMG found in a study published this month that 27 per cent of women are not paid the Living Wage, compared with 16 per cent of men.

It found as well that 43 per cent of part-time workers were paid below the Living Wage standard whereas the figure for full-time workers was 12 per cent.

To put these percentages into some perspective, the number of people earning less than the Living Wage in Britain is put at almost 5 million.

On returning to work women face the formidable obstacle of the rising cost of childcare which may prove to be prohibitive when compared alongside earnings from part-time work.

Child poverty is linked to the gender pay through the inter-connections between part-time work, low-skilled work, low pay and caring duties, with likelihood of poverty amongst children related to the income of the mother.

Today the house where no one is at work is by no means the sole or main home of children living in poverty.

The report by former Labour Cabinet Minister Alan Milburn, “The State of the Nation” revealed that two-thirds of poor children in the UK – 2 million of them -  are from families where at least one person is in paid employment.

It stated :

“The nature of poverty has changed. Today child poverty is overwhelmingly a problem facing working families, not the workless or the work-shy. Two-thirds of Britain’s poor children are now in households where an adult works. In three-quarters of those households someone already works full-time. The problem is that those working parents simply do not earn enough to escape poverty.”

"Today the UK has one of the highest rates of low pay in the developed world. The 5 million workers, mainly women, who earn less than the Living Wage desperately need a new deal.”

Ed Miliband has already proposed a year’s tax break for firms who pay workers the Living Wage.

This will be to women’s advantage and will help to reduce the gender pay gap.

It cannot be acceptable that the cost of raising a family means involves being employed at rates below the Living Wage.

Nor can it be acceptable that many women’s potential goes untapped.

The Fawcett Society highlight research which indicates that removing the barriers to increasing women’s participation in jobs traditionally regarded as “men’s work” could contribute between £15 and £23 billion to the national economy.

Allowing women to reach their full potential benefits us all.