By Michael Scholes & Aidan Stennett
To highlight International Women’s Day, the following article updates our previous blog article examining the Gender Pay Gap in Northern Ireland, presenting the latest available data.
The UK Government defines the ‘gender pay gap’ (GPG) as:
… the difference between the average (mean or median) earnings of men and women across a workforce.
The GPG should not be confused with equal pay, which refers to paying men and women differently for doing the same work. This discriminatory practice was made unlawful in the UK by the Equal Pay Act 1970.
The UK Government has identified a number of factors contributing to a gender pay gap, including:
- A higher proportion of women choose occupations that offer less financial reward (e.g. Administration), whilst many high paying sectors are disproportionately made up of male workers (e.g. Information and Communications Technology.
- A much higher proportion of women work part-time (PT), and PT workers earn less than their full-time (FT) counterparts on average.
- Women are less likely to progress up the career ladder into high paying senior roles.
The reasons for these factors are complex and overlapping, which this blog does not address in detail, other than to note research undertaken by the Institute for Fiscal Studies (IFS) in 2018, which highlighted that:
- The pay gap widens when people are in their late 20s, with male wages increasing and female wages flat-lining. This is, the IFS believes, a result of women having children around this age. Following this, the gap continues to widen as women lose out on labour market experience, impacting their future wage potential;
- Women also tend to enter part-time employment following the birth of their first child, reflected in the high number of women working part-time. This part-time working also appears to be persistent. Even after a child has reached the age of 20, women are more likely to remain in part-time employment, potentially reflecting the impact of a loss of labour market experience; and,
- Choice of occupation, as noted above by the UK Government, also plays an important role in the development of a gender pay gap. In broad terms, women tend to work in lower paying sectors.
It is also worth noting that that if we are to understand the GPG, there is a need to examine the causes, using a range of techniques, to go beyond simple measures such as average hourly earnings. This allows more considered examination of the issue, and better understanding, ultimately serving to decrease the GPG. The rest of this blog explains measures that are widely used at this time in the UK, and how the extent of the GPG can depend on the measures used.
Measuring the GPG
There are various ways to measure the average earnings of men and women. A very different picture of the gender pay gap is presented, depending on which method of measurement is chosen. In the UK, the Office for National Statistics (ONS) and the Northern Ireland Statistics and Research Agency (NISRA) prefer to use FT median hourly pay – excluding overtime – as their headline measure of gender pay differentials. In their view, overtime can often distort the picture as more men than women tend to work overtime. The median is preferred because using the mean (another measure of averages) can misrepresent the data, due to small numbers of very high earners. NISRA also asserts that using hourly earnings:
…better accounts for the fact that males work on average more hours per week than females.
Impact of the COVID-19 pandemic
Collecting data and measuring the NI GPG in the midst of a global pandemic has presented certain challenges for NISRA:
The coronavirus pandemic impacted the ability of some businesses to return survey forms. A total of 6,207 returns were received by NISRA; 80% of those employees sampled, compared to 90% received in 2019.
A number of responses were received after the survey closed, including a number of responses from the Education sector. As is normal practice, those responses will be included in the revised 2020 outputs published in 2021.
Consequently, a robust assessment of the impact of the coronavirus pandemic on the NI GPG is not possible at this time.
GPG in Northern Ireland
Figure 1 plots changes in the NI hourly median gender pay gap (excluding overtime) for FT employees for each between 2000 and 2020. The figure shows that, using this measure, the difference in male and female pay has moved from males earning 11.7% per hour more than females in 2000, to females earning 3.6% more than males in 2020. This reverse gender pay gap has existed in NI for 11 years. In the UK as a whole, males working full-time earned 7.4% more than FT female workers 2020.
As noted above, there are a number of ways to measure the gap between male and female pay. Figure 2 illustrates NI GPG over different employment periods. It also shows the how the GPG differs in the public and private sectors in NI.
As we see from Figure 2, there is considerable variation in the gap between male and female pay. There is a GPG in terms of gross annual pay, weekly pay, hourly pay for all employees, hourly private sector pay and hourly public sector pay. Indeed in terms of gross annual pay, this is quite signicant – i.e. females earn 31.1% less than males.
Hourly pay for all employees also shows a signficant gap; with male employees earning 8.2% more than female employees. NISRA explains that the main reason higher hourly earning for all male employees for this is due to the “part-time effect”, stating that:
These higher earnings are primarily due to a larger proportion of males (84% compared with 57% of females) in full-time work, which has higher hourly rates of pay on average than part-time employment and proportionately fewer low paid jobs.
In other words, because more females occupy more PT jobs than males, and those jobs tend to be lower paid than FT jobs, this produces an overall effect of increasing the hourly GPG between all male and female employees (both FT and PT). A NISRA animation – published in 2018 – explains this in more detail.
However, when we look at hourly pay separated out into FT and PT employment, the picture becomes more complicated: both FT and PT produce a GPG in favour of female employees.
The data shows that the 2020 median hourly female FT pay – excluding overtime – was 3.6% greater than the male equivalent. Similarly, median hourly female PT pay – excluding overtime was 2.5% greater than the male equivalent.
Figure 2 also shows the gender pay gap to be much greater in the private sector (16.3% in favour of male employees) than the public sector (2.9% in favour of male employees). Drilling down in the data shows even greater variation in male and female pay across industries and occupations.
Figures 3 and 4 present the difference in median male and female hourly pay across standard industrial classification (SIC) of economic activities in two different ways. Figure 3 compares actual 2020 median male and female hourly pay – excluding overtime – for all employees in cash terms; whereas Figure 4 presents percentage pay gap in each sector. As can be seen from both these figures, the widest gap between male and female pay in 2020 was in the education sector, where male employees earned £5.74 (36.0%) per hour more than female employees. Significant gender pay gaps in favour of males existed in the following sectors: Professional, Scientific and Technology (£3.21, 20.7%); Other services (£3.27, or 26.6%); Real Estate (£2.64, or 19.0%); Construction (£1.52, or 12.4%) and, Manufacturing (£1.47, or 12.4%). In two sectors, females earned slightly more than males in 2020. The Arts, Entertainment and Recreation sector, where females earned £1.08 or 0.11% more than males, and the Administration and Support sector, where females earned £0.30 more or 0.03% more than males per hour (excluding overtime).
Figures 5 and 6 present similar information to that presented in Figures 3 and 4, but examines standard occupation classifications rather than industry. It is noticeable that measuring according to occupation type identifies smaller pay gaps between all male and female median employee pay – excluding overtime – on an hourly basis in 2020, than the gaps identified at industry level. As can be seen from Figures 5 and 6 females earned less than males across all occupations in 2020. The widest pay gap in percentage terms was in skilled trade occupations (£1.39 per hour, or 12.4%). According to NISRA, 94% of those employed in skilled trade occupations are male. In 2020, there was a small reverse gender pay gap in manager, director and senior official occupations where females earned £0.54 or 2.7% more the males.
The final figure, Figure 7, looks at the variation in male and female pay across different age brackets. Again, the figure looks at median hourly pay for all employees – excluding overtime – in 2020. It presents the age groups in accordance with the size of the pay gap. The figure shows that the GPG varied across age groups. To this end, female employees earned more than male employees did (£0.64 or 7.8%) in the 18-21 age range. In every other age range, male employees earnt more than female employees. The largest gap was found in the 60+ age range where male employees earned £2.11, or 17.27% more than female employees.
To conclude, it is evident that using NISRA’s headline measure of the GPG in NI – i.e. the difference in median FT male and female hourly pay, excluding overtime – females were paid more in NI than males in 2020. This is contrary to the UK as a whole, when using the headline measure. However, to avoid a distorted perception of the GPG in NI, there is a need to look beyond the headline figures, which does reveal a more complicated picture. A more considered examination reveals that the differential between male and female pay significantly varies depending on the measure used, and the group examined, e.g. sectors, occupations and age groupings. As noted early in this blog, COVID-19 pandemic has impacted upon the collection of data. This ensures that a full picture of the impact of the pandemic has not yet emerged. This is something that will likely require further investigation once revised 2020 data is published in 2021.