Gender Pay Gap Reduced to 5%

Published: 17/01/2017 and written by Toni Hart

Gender Pay Gap Reduced to 5%

The pay gap between men and women in their 20s is now down to 5%, reports have found. However the report also found that women will still earn significantly less than their male colleagues throughout their career. Mr Lender, a UK based short term loan provider, looks into the gender pay gap and what the future holds for women in the workplace.

Gender pay gap now at 5%

The report, carried out by the Resolution Foundation, found that women entering the world of work now would still earn less throughout the course of their career. This is despite seeing a slightly more equal wage during the first ten years.

It was found that women could earn up to 30% less than men by the time they reach 40. According to the Institute of Fiscal Studies, the pay gap widens for both men and women after having a child. It has been claimed the pay gap widens significantly over the first 12 years of the child’s life.

Sarah Champion, the Labour Spokesperson for Women and Equalities, said “it is encouraging to see the pay gap closing while people are in their 20s, but it is also clear that this Tory government is failing to address its underlying long-term causes.

Many women are still trapped in chronically low-paid, low progression sectors of the economy, while the cost of childcare has soared under the Tories. Thousands of new mothers are forced out of their jobs each year due to maternity discrimination, and the vast majority of tax and benefit changes have fallen on the shoulders of women”.

A government Spokeswoman claims that from September, working parents of 3-4 year olds will receive 30 hours of free childcare. This is twice the current allowance.

The Spokeswoman said “the gender pay gap is at a record low but we have to push further to eliminate it completely. Shining a light on organisation’s pay gaps means employers can take action to tackle the causes and drive change.”

The Resolution Foundation report found the pay gap has significantly decreased over the last 70 years. It found that women born between 1946 -1965 would’ve seen a pay gap of 16% throughout their 20s. Women born from 1966-1980 would’ve seen a difference of 9%, while millennials today have a pay gap of 5%.

Senior Policy Analyst at the Resolution Foundation, Laura Gardiner, said “young women today face relatively little disadvantage in terms of their pay packets compared to what their parents and grandparents faced.”

The Resolution Foundation said the report “shows that the gender pay gap has closed for every subsequent generation of women. This reflects positive trends, including rising higher educational participation which women in particular have benefited from, and more women breaking into high-paying industries and occupations”.

Gardiner also said “it’s important not to overlook the positives. The rate of progress between generations is really welcome, particularly with Generation X. Even in the child-rearing years there are still really big gains.”

The future for the gender pay gap

From April, companies with more than 250 employees will have to begin calculating how much they pay their staff. This includes both salaries and bonuses as well as any commission. The gender pay gap reports will then be published in April 2018.

These changes are likely to affect around 8,000 employers across the UK. Employers will need to make the report available to their staff and also publish it on their websites. The report will need to be republished every year, and it will need to be signed off by senior executives.

It is hoped that this change will entice employers to reduce the pay gap between their staff. Upon being made Prime Minister, Theresa May used her first statement to underline the pay gap. She pledged to create a “Britain that works for everyone”.