Equal pay and the problem with applying UK headlines to Scottish realities

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Is the gender pay gap in Scotland higher than any part of England? Well yes, but probably less dramatically than the headlines suggest.  John Robertson examines why.

‘Scots gender pay gap ‘worst in UK’ (BBC Scotland)

‘Scotland has worst gender pay gap in UK, report claims’ (The Herald)

‘Report: Scotland has UK’s highest gender pay gap’ (Daily Record)

‘Scotland the worst in UK for gender pay divide’ (Daily Express)

John Robertson
John Robertson

The BBC and other mainstream media reports have offered some contextualisation and explanation of the results of the Chartered Management Institute (CMI) study they have headlined so loudly on August 23, but they have left their dramatic bad news value essentially unchallenged so as to allow some to interpret the figures as just more SNP failure in government.

Only The Herald noted that the CMI figures were ‘much starker’ than those from the UK Office for National Statistics in June 2016 but seemed content to leave the CMI figures uncontested despite their more subjective basis, as we shall see below. While it is tempting to reject the CMI study as less scientific and thus probably exaggerating the situation, we must remember that the same is likely to be true of the figures for the English regions too so even if the Scottish gap is smaller than portrayed here it probably remains higher than that in England.

I spend much of my time trying to offer a Scottish perspective on national trends. Often I reveal that things are better in Scotland especially with regard to the performance of the Scottish NHS and welfare system, against their troubled English equivalents. So, when I find some issue where Scotland seems to be doing less well than all parts of England, I must resist the temptation to hide it away.

The gender pay gap, in the CMI study, is demonstrably worse in Scotland than in any part of England and much worse than in some, especially the North–East and London, according to data which I was able to get from the fast, efficient, kindly and hopefully well-paid Jenny Jakubowski of RBI-UK. Here are the data:

Reportable Region: Basic salary (2016) gender pay gap (MEAN)
  Male Female GPG £ GPG % Male Female
Mean Mean Mean Mean n n
Inner London 49,600 41,092 8,508 17.2 2,190 3,506
South East 35,587 27,147 8,440 23.7 2,234 3,450
South West 36,941 28,984 7,957 21.5 2,136 3,312
East Anglia 34,427 25,340 9,087 26.4 651 1,328
Midlands 35,828 27,304 8,524 23.8 4,029 6,958
North West 34,440 26,491 7,948 23.1 1,440 2,356
North & North East 30,787 25,280 5,507 17.9 1,525 2,287
Scotland 37,261 26,399 10,862 29.2 1,114 1,987

 

 

Reportable Region: Basic salary (2015) gender pay gap (MEAN)
  Male Female GPG £ GPG % Male Female
Mean Mean Mean Mean n n
Inner London 47,812 39,867 7,945 16.6 2,190 3,506
South East 34,154 26,274 7,880 23.1 2,234 3,450
South West 35,884 28,329 7,555 21.1 2,136 3,312
East Anglia 33,331 24,584 8,746 26.2 651 1,328
Midlands 34,615 26,489 8,126 23.5 4,029 6,958
North West 33,402 25,806 7,597 22.7 1,440 2,356
North & North East 29,766 24,632 5,134 17.2 1,525 2,287
Scotland 36,114 25,627 10,486 29.0 1,114 1,987

The gap, according to the CMI study, in contrast with other more objective research, seems even to have worsened between 2015 and 2016. I’m not going to try and magic this away but it is worth mentioning two reservations. The observant may have noticed that the difference between the male and female sample sizes for Scotland and for East Anglia is greater than for the other regions listed. For these two areas the ratio is around 2 females for 1 male respondent whereas for the others it is typically 3 to 2.  So, I wondered about this and asked one of the researchers:

‘Do you think the gap may have been inflated as a consequence of the larger F sample, especially in the worst cases – E Anglia and Scotland?’

She replied quickly to say:

‘Yes I’m sure, which is influenced by the types of company taking part in our surveys and the roles they provide data on – industries and roles which have tended to see a higher incidence of female workers in roles which have traditionally not attracted the higher salaries.’

So, the Scottish gap may actually be inflated by having a disproportionately larger female sample. Further complicating the interpretation of the data are, as she points out, the types of company which took part.

The second reservation is that these results derive from self-reporting and not objective measures and so may be exaggerated. Of course this is likely to apply to the English results equally unless you think Scottish women have greater tendency than English women, to exaggerate how badly they are paid.

However, accepting that there remains a very real problem beyond any sampling error or subjectivity in self-reporting, what might explain it? Here’s one well-supported reason discussed on Good Morning Scotland:

‘Petra Wilton, director of strategy at the organisation [CMI], said progress to address the gender pay gap had stalled. She told BBC Scotland’s Good Morning Scotland programme that Scotland’s strong manufacturing tradition combined with a “motherhood penalty” for women had resulted in less opportunity for promotion for female staff. “That probably accounts for, in part, why Scotland is particularly suffering that 29% pay gap, compared with 23% nationally”, she said.’

Further explanatory evidence comes from the Scottish Government publication based it seems on the UK Office for National Statistics figures,  ‘NEW PERSPECTIVES ON THE GENDER PAY GAP: TRENDS AND DRIVERS’ which starts with the surprising assertion, after reading the media reports based on the CMI study, that the full-time pay gap in 2015 was only 7.3%. Here’s an extract from this report which reveals the complexity of such matters and the consequent limitations imposed on any (quality) political or journalistic headlines:

‘There are many versions of the gender pay gap, but the main ones are: 

 The full-time pay gap (7.3% in 2015): this measure gives a direct comparison between women and men working full-time only. It therefore removes the effect of differences in working patterns, i.e. more women working part-time. However part-time work is generally lower paid, and the associated cultural and economic drivers which channel more women into part-time work are not fully reflected in the full-time pay gap. 

 The overall pay gap (16.8% in 2015) reflects all workers, full- and part-time. It reflects wider drivers that channel more women towards lower paid part-time work, and can be presented alongside the full-time pay gap for a fuller discussion of the pay gap. 

 The part-time pay gap (-9.1% in 2015) shows that median part-time pay for women is higher than for men. However many more women than men work part-time and it is generally lower paid than full-time work. The official statistics tend to give prominence to the full-time median pay gap. Unless otherwise stated, where sections below refer to “the pay gap‟, this refers to the full-time median gender pay gap. 

The pay gap in Scotland has reduced substantially.

There have been substantial reductions in the full-time and overall pay gap over past decades. But it remains persistent in some age groups, and recent years suggest a current pause in the decline in Scotland. However the overall long term trend is declining – the pay gap reduced from 18.4% in 1997 to 7.3% in 2015. The pay gap differs greatly by age group. 

In Scotland, there was a negative full-time pay gap of -1.7% (women paid more than men) for the 25-34 age group in 2015 3 compared to 11.9% for the 50+ age group. 

Since 1997, the pay gap has declined for age groups under 50 but remain persistent for those older than 50. The overall pay gap was 16.8% in Scotland in 2015 and has also reduced substantially since 1997 (26.6%). The overall pay gap shows similar patterns to the full-time pay gap when broken down by age.’

The Scottish Government figures do suggest that the CMI study may be eccentric and overstating the problem. The media reports are thus over-dramatic and lacking in evidence. Nevertheless, accepting that the gender pay gap remains, which I do, what further light can be shone on it? Some interesting and controversial insights come from the US site Freakonomics :

‘Some of the best studies that we have of the gender pay gap, following individuals longitudinally, show that when they show up right out of college, or out of law school, or after they get their M.B.A. — all the studies that we have indicate that wages are pretty similar then. So if men were better bargainers, they would have been better right then. And it doesn’t look as if they’re better bargainers to a degree that shows up as a very large number.  But further down the pike in their lives, by 10-15 years out, we see very large differences in their pay. But we also see large differences in where they are, in their job titles, and a lot of that occurs a year or two after a kid is born, and it occurs for women and not for men. If anything, men tend to work somewhat harder. And I know that there are many who have done many experiments on the fact that women don’t necessarily like competition as much as men do — they value temporal flexibility, men value income growth — that there are various differences. But in terms of bargaining and competition it doesn’t look like it’s showing up that much at the very beginning.

If you take women who don’t have caregiving obligations, they’re almost equal with men. It’s somewhere in the 95 percent range. But when women then have children, or again are caring for their own parents or other sick family members who need care, then they need to work differently. They need to work flexibly, and often go part-time. They often get less-good assignments because their bosses think that they’re not going to want work that allows them to travel, or they’re not going to be able to stay up all night, or whatever it is. And so then you start — if you’re working part-time, you don’t get the same raises. And if you’re working flexibly your boss very typically thinks that you’re not that committed to your career, so you don’t get promoted.

Having made much of childcare demands as the dominant explanation, Freakonomics goes on to wonder if attempts to change things by changing women’s thinking and behaviour would actually be beneficial.

‘Making men kinder and gentler and more interested in their kids — how can there be any cost to that? Making women more respected in their jobs, how can there be any cost to that? Making women fiercer and better bargainers and more competitive? Meh. I can see a cost to that.’

Where are we at the end of all that? Well, there is gender pay gap difference and it is probably a bit bigger in Scotland than elsewhere in the UK. That is a serious problem and it needs to be tackled. I don’t doubt the SNP commitment to doing something about it but there are limits to what any government can do against the forces of masculine conservatism so embedded in, especially, our private sector employers. As always our mainstream media makes a pretty poor job of informing us fully on what is an inevitably complex area. I know staffing is tight in the newspapers but BBC Scotland has more researchers than it can count, even though it could afford one just for counting how many it has.

Sources:

Good Morning Scotland:  http://www.bbc.co.uk/news/uk-scotland-37162985

Scottish Government: http://www.gov.scot/Resource/0050/00502056.pdf

Freakonomics: http://freakonomics.com/podcast/the-true-story-of-the-gender-pay-gap-a-new-freakonomics-radio-podcast/