mind the gap

Gender Pay Gap v Equal Pay – The Difference and Why

With the forthcoming Economy, Jobs and Fair Work Committee’s current inquiry into the Gender Pay Gap in Scotland I thought it would be helpful to outline the distinctions between equal pay and the gender pay gap. Many think we don’t have a pay gap in our economy due to equal pay legislation.

Equal Pay and the Gender Pay Gap are two completely separate issues.

Equal Pay is covered by the Equality Act of 2010 which means that men and women in the same employment performing equal work must receive equal pay.

The Gender Pay Gap is the difference between men and women’s average earnings in a business or across the labour market. The Pay Gap is expressed as a percentage of men’s earnings.

The Gender Pay Gap exists for a whole host of reasons.

Women are still more likely to work in part-time and low paid roles compared to men. In Scotland, women account for 76% of all part-time workers.

The average gender pay gap across the UK is 18% however in some sectors it is much higher including financial services where it is estimated to be as high as 39%. Simplistically we can say that is because in this sector there is likely to be more men in higher paid roles than women.

The Gender Pay Gap isn’t unique to Scotland or the UK. Global estimates suggest that it could take another 140 years for the gap to close at a global level.

So in Scotland – how do we tackle the gap that remains? This is complex and there is no one correct answer but taking a detailed and evidenced based approach to understanding the facts is a start.

If we know what the gap is key industry sectors in Scotland we can start to look at how we use the tools available to us to close it. These include encouraging more girls into Science and Technology at a younger age and maintaining this interest beyond school to lead to career opportunities. For women in employment, how do we support more women to move from part-time to full-time work? How do we look at developing more women in work into senior leadership roles? How do we reward success in our companies? Are promotions solely based on presenteeism, finding someone in the boss’s own image or through closed networks?

This is a massive challenge but also a huge opportunity for Scotland’s economy. More women working and earning means more economic growth – inclusive economic growth.

We all have a part to play and the Economy, Jobs and Fair Work Committee’s inquiry is an important step in the journey.

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