We're solving the pay gap - the wrong way

Time for a better debate about what is happening to the pay of women and men.

One of the longest-running campaigns in modern British politics is that for equal pay. As many have pointed out it's over 40 years since the Equal Pay Act yet the gender gap still persists. The good news is progress - even if it is all too slow - is being made. The bad news is that the reason that progress is being made is due to male wages stagnating.

Figure 1: Full-time pay gap, 1997-2011 (median £ hourly pay excluding overtime)

But first, let's pause on what we mean by the "gap". Typically the headline measure used (favoured by the ONS) is that between full-time male and female median pay - that is, typical full time wages (others argue that the "mean" wage should be used as this captures big gender inequalities at the top of the earnings spectrum). But any headline figure cloaks the reality that if you segment the jobs market by age, occupation, or income a different story emerges about pay inequality.

Take age. There isn't a pay gap for the under-25s, and only a pretty modest one for the under-30s. A larger gap starts to open up for those in their 30s, which then increases dramatically for those 40 and above.

Or look at part-time work, which is excluded from the headline pay gap figure. The part-time pay penalty affects millions of women, appears to be getting larger over-time, and, sadly, is bigger in the UK than anywhere else in the EU. There are certain types of jobs that tend to be offered part-time and they are concentrated in low-paying sectors. The result is industrial scale occupational downgrading following childbirth - 48 per cent of mothers on low to middle incomes take a lower-skilled part time job after having children (the figure for graduates is 42 per cent). The price is paid by individual women but also by the wider economy too. The part-time penalty is also likely to reflect a major power imbalance in local jobs markets: big employers appear able to hold down part-time wages in part because there are many women needing to work very locally often due to caring commitments.

There are, of course, many different reasons for the pay gap. And once economists consider some of the main factors such as skill levels, occupation, and time spent out of the labour market a chunk of the "gap" is accounted for (pdf) though a very large part isn't (studies often show that the majority remains unexplained).

How to interpret all this is a matter of some controversy. Those who want to dismiss gender inequalities often imply the "unexplained" gap is largely a mirage or a reflection of female preferences about the nature of the employment roles they want to undertake. Which is an account that entirely side-steps the crucial question of why it is that female-dominated sectors of our economy are so often afforded low status and low pay. I don't think we can put this down to a series of coincidences.

The question of how much of the headline pay gap can be "explained" is often where these discussions about gender and pay end. Except they shouldn't. Because vital though it is, on its own it doesn't get to the heart of some fundamental changes in the nature of gender, work and pay - changes which are also showing up in the shifting nature of poverty.

For a start, if our eyes are trained solely on the headline pay gap we may miss the fact that the reason it continues to fall is changing. Throughout the late 20th century we got used to the idea that with a growing economy typical male wages should generally rise, and female wages should slightly outpace them as they catch up. There would be two rising tides, but the female one would rise faster.

Not now. The progress made on the pay gap over recent years has resulted from female wages climbing slowly while the typical man's pay has flat-lined. This isn't how it was supposed to be.

Figure 2: GDP per capita and full-time wage growth by gender, 1971-2011 (indices of GDP and median wages 1971 = 100)

Dig deeper, as new work by Paul Gregg with the Resolution Foundation does, and we find the pay gap between mothers and fathers has been closing significantly faster than that between men and women more generally - suggesting shifts in earnings responsibility occurring within the family. Moreover, we are also seeing important changes in pay within the genders. Among women we see that since the mid 1990s mothers have experienced faster wage growth than other women. The opposite has happened among men: the wages of fathers' have fallen behind those of other men, to the tune of almost four per cent over the same period. All of which is pretty striking. And none of which is illuminated in changes in the headline pay gap.

We don't know for sure what is behind these trends. But we do know that the pay inequalities within families tends to be self-reinforcing. Couples often arrange their affairs to benefit the career prospects of the highest earner - for instance, in terms of who opts to go part-time following childbirth, who does overtime, or indeed whose job prospects it would be worth moving house to further. These decisions tend to greatly magnify any pre-existing pay differentials within the family. In the past this would have overwhelmingly boosted men's pay at the expense of women's. But with the pay gap for those in their 20s having largely disappeared it may be that there is a growing number of households where these family adjustments are benefiting the mother.

Another possible explanation would point to the rise in part-time working by men - a longer term trend that has accelerated over recent years due to the sharp growth in under-employment. Perhaps there is a bit more equality in how the part-time pay penalty is being shared out across the sexes (pdf), with more men now suffering too? There is bound to be some element of this going on. But this can't be the main explanation not least as male part-time working is still the exception rather than the rule, and because the increases we've seen have been more concentrated among men without children rather than fathers.

Figure 3: Rise of part-time work amongst men

Whatever the cause, it's pretty clear that the poor performance of men's wages - particularly fathers - is closely related to another little noticed trend we see: the steep rise in poverty rates among "single earner couples" (the great majority of whom still have a male bread winner). This group now accounts for a larger share of overall child poverty than out-of-work lone parents.

Figure 4: Poverty by family type, 1994-95 to 2009-10

Like many things in politics it's not hard to see how these shifting patterns of pay and family disadvantage could be used to help justify competing policy agendas. Some will react to the demise of the traditional male breadwinner family by claiming that this only reinforces the case for a transferable marriage allowance (let's leave to one side the fact that many of these single earner couples won't be married).

Alternatively, and for me far more convincingly, the pivotal role of female employment in securing rising living standards for low to middle income households, and the persistently low levels of child poverty in dual earning households, should be seen as a spur to a policy agenda that would increase the affordability of childcare, reduce the part-time pay penalty for women and men (by expanding higher quality part-time work) and favour welfare reforms that encourage rather than deter second earners (the impending universal credit is about to do the opposite).

Regardless of which of these views you favour, what should concern both sides of this debate is how little each has to say about the underlying cause of male wage stagnation - particularly among low-earning fathers and young men. That's an issue everyone across the political spectrum should be focussed on. Yet silence reigns. So let's rightly redouble our efforts to close the pay gap. But let's make sure we close it the right way.

 

40 years since Barbara Castle passed the Equal Pay Act, the gender gap still persists. Photograph: Getty Images

Gavin Kelly is a former adviser to Downing Street and the Treasury. He tweets @GavinJKelly1.

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At Labour conference, activists and politicians can't avoid each other – but try their best to "unsee"

My week, from havoc in the Labour family to a sublime act of real-life trolling – via a shopping centre.

I like to take a favourite novel with me to party conference for when it all gets too much, and this year I took China Miéville’s The City & the City. It takes place in the fictional cities of Besžel and Ul Qoma, two metropolises that exist in the same geographic space but must dutifully “unsee” one another or risk the sanction of Breach, the secret police force. It turned out to be a better allegory for what was going on outside my hotel than I had expected.

Labour, as I don’t need to tell you, is badly split on almost everything. Now that the acrid leadership race has reached its inevitable conclusion, activists and politicians on both sides are operating as if they had a standing duty to “unsee” each other. The atmosphere feels a bit like a family dinner after a blazing row: everyone is aware that things have been said that will take years to be forgiven, if they ever will be, so the conversation is largely banal and superficial.

The exception is the conference floor, the only place where Corbynites and Corbynsceptics cannot unsee each other, which was therefore the scene of several acrimonious confrontations after tricky votes. It’s difficult to predict where Labour goes from here. The Parliamentary Labour Party (PLP) is largely against a split, but its members surely can’t spend the next four years dutifully pretending not to see one another,or their activists?

 

Chaos and confusion

Would it have been better for Jeremy Corbyn if his defeated challenger, Owen Smith, had done a little bit better against him – not just in the final vote but throughout the contest? All summer, Smith distinguished himself only through his frequent gaffes, to the point where it felt more appropriate to describe him as a participant in the leadership race rather than a combatant.

The difficulty for both Corbyn and his critics is that his opponents in the PLP have no clear leader. As a result, their dissatisfaction is amorphous, rather than being productively channelled into a set of specific demands or criticisms, which Corbyn could then reject or accept. The overwhelming feeling about his leadership among the PLP is that “something must be done”. So whenever an MP embarks on a freelance assault – Margaret Hodge’s no-confidence motion, say, or Clive Betts’s attempt to bring back elections to the shadow cabinet – the majority leaps on the scheme. Corbyn’s critics reason that at least it’s something.

Although fractious Labour MPs might not see it that way, the decision not to restore shadow cabinet elections helps their cause. Taking away the leader’s ability to choose his ministerial team was a recipe for chaos – chaos that would, rightly, have been blamed on them.

 

Custody rights

If the Labour family would be, as I suspect, better off seeking a divorce, there is an irony that one of the things that they all agree on is the fate of the kids. The party is entirely united behind its leader in his opposition to grammar schools – as is almost every serious thinker on education policy, from Policy Exchange on the right through to Melissa Benn on the left.

Still, Labour will encounter a visceral type of resistance to its stance from the alumni of grammars, who, regardless of what the studies show, attribute their success to their attendance at selective schools. I can understand that. Although I went to a comprehensive, the emotional pull of one’s upbringing is hard to escape. I can, for example, read all the studies that show that children in single-parent families do worse – but I find it hard to experience it as anything other than an awful attack on my mother, to whom I owe everything.

Winning the argument over schooling will require a sensitive ear to those for whom the argument against the schools seems like an attack on their parents.

 

Pudding and pie

One of the nice things about being from a single-parent family is that I don’t have to admit to flaws – merely to unresolved kinks that would have been ironed out had my absent father stuck around. One such kink is my capacity for procrastination, which
results in my making decisions too often at the last minute.

This always comes back to bite me at party conference. At dinner events, I frequently put off picking my meal options to the point that I have to eat whatever the kitchen has left. At one meal this year, I was lucky enough to have three courses of pudding, but at another, my hastily cobbled-together starter seemed to consist entirely of pesto, taramasalata and rocket.

 

Too late

The best thing about party conference is sharing a panel with a politician you don’t know very much about who turns out to be highly impressive. It’s particularly cheering now, when my optimism about politics is at a low ebb. I try to meet them properly for coffee afterwards, although because of my capacity for putting things off, that doesn’t always happen.

Last year, I was chairing a particularly testy fringe on the Israel-Palestine conflict. The then shadow foreign secretary, Hilary Benn, was running late and an MP from the 2015 intake had to field all the questions on her own. She did this with immense poise and knowledge, while clearly having a sense of how unhelpful some of the louder, angrier voices were – during one lengthy monologue from the floor, she turned and rolled her eyes at me. Her name was Jo Cox.

I kept meaning to get to know her, but I never got around to ringing her office, and now I never will.

 

Banter and bargains

A colleague alerts me to a sublime act of real-life trolling. When Everton opened a second branch of its team store in Liverpool’s shopping centre, it picked an innocuous name: Everton Two. Innocuous, that is, until you realise that the shopping centre is called Liverpool One. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics. 

This article first appeared in the 29 September 2016 issue of the New Statesman, May’s new Tories