Before the lockdown, the UK’s women were underpaid by £126 billion. What can they expect when the world wakes up again?
In the post-pandemic world of work, might we return to something better than normal by closing the gender gaps that have prevailed over the last half century? This is the big question being asked in a new report published today by charity Pro Bono Economics.
The report claims that the official gender pay gap of 8.9 per cent includes a direct ‘pay penalty’ for being female that amounts to £1,190 a year for every woman of working age in the UK. But the study argues that the full extent to which women’s work is undervalued is even greater, because of the much higher share of unpaid tasks that women undertake in households. The unpaid work done by women aged 16-65 – including such tasks as childcare, cooking and cleaning – is worth £4,840 more a year than the unpaid work carried out by men of the same age.
This means that the average woman finds her work being undervalued by just over £6,000 a year. And collectively, the UK’s working-age women are losing out on £126 billion each year, a sum which represents just under half (47 per cent) of the £267 billion paid in total to female employees in 2019.
The Pro Bono Economics report, Women’s Work: policy, pay, progress and the penalties that remain, details the gains made by women in the labour market over the last half century – with, for instance, the gap between male and female employment rates narrowing from 38 percentage points in the early 1970s to 8 percentage points at the end of 2019. But it also highlights the need to narrow the substantial gender gaps that persist in relation to job quality, pay and the burden of unpaid work.
Pre-pandemic, women accounted for 47 per cent of all those in paid employment, and for 50 per cent of all employees. Yet they comprised 74 per cent of people working part-time, 54 per cent of people on a temporary contract, 56 per cent of people on a zero-hours contract, and 61 per cent of low-paid employees. Women also spent 60 per cent longer than men each week undertaking unpaid work.
Pro Bono Economics points out that public policy has played an important role in narrowing the gap between men and women in the formal workplace over the last 50 years, but argues that a new policy focus now needed.
The organisation says it has found evidence of an appetite for change among the public in this regard. Notably, 54 per cent of those polled as part of Pro Bono Economics’ study said they would be prepared to disclose their salary details if it helped to narrow the gender pay gap. Just 9 per cent said they wanted to keep the current uneven balance of unpaid work across men and women, with two in five saying their preference was for some form of basic income payable to those with caring responsibilities.
Developing the right policy interventions rests on securing better data, says Pro Bono Economics, citing a strong case for including questions about unpaid work in government statistical studies.
Matt Whittaker, Chief Executive of Pro Bono Economics and co-author of the report, commented:
“Massive though it is, the economic shock associated with today’s crisis should prove temporary. In the fullness of time, economic activity should return to something like normal and we might then expect past labour market trends to reassert themselves.
“But the transformative effects of the crisis should not be underestimated. Millions of people now find themselves reliant on the state for their income, and there is a new respect for men and women working in lower-paying roles – from nurses to supermarket cashiers to refuse collectors. Family dynamics are also shifting as parents juggle the demands of home-working and childcare, and there is an upsurge in volunteering as people support efforts to tackle the crisis at both a national and a neighbourhood level.
“There is, then, a real possibility that the UK will ultimately emerge from today’s turmoil a more united country. We are likely to achieve a greater understanding of the economic pressures arising from entirely unexpected changes in circumstances, and consequently a greater understanding of each other. The lockdown might also lead to a change in attitudes to the balance between paid work and home life, and between the demands of economic ‘activity’ and the need for a focus on wider wellbeing.
“Ultimately, we have the chance not simply to return to normal, but to return to something better.”
Caroline Criado Perez, journalist, activist and author of the bestselling book Invisible Women: Exposing data bias in a world designed for men, commented:
“Women’s unpaid work has, historically, been invisible. Excluded from official GDP figures, it has been taken for granted by successive governments, and seen as a costless resource to exploit. But as this report shows, women’s unpaid work has a significant economic value — and our failure to account for it has consequences for us all.
“An accurate measure of the economy is crucial to drawing up effective economic policy; by depending on a GDP figure that is compromised by a gender data gap, successive governments have allocated resources inefficiently. This has compounded women’s over-representation in low-paid, part-time and insecure work, and had a knock-on negative effect on tax revenue. It has also made women more exposed to the economic consequences of the coronavirus pandemic, which has magnified already existing social inequalities.
“But there is room for hope. COVID-19 has forced the UK to reckon with the huge amount of unpaid and low-paid work this country relies on, and which is predominantly done by women. Meanwhile, the new data presented in this report shows that a majority of us are open to recognising the true value of “women’s work”. By making this work more visible than ever, this pandemic brings with it the hope that we can return to something better than normal. All we need is the data — and the political will to act on it.”
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Key report findings include:
The gender pay gap still stood at 8.9 per cent in 2019
- The headline gender pay gap (which captures the difference between median full-time pay for men and for women) has improved over time, but progress has slowed in recent years. It fell from 17.4 per cent in 1997 to 10.1 per cent in 2010; since then, however, it has drifted only marginally lower and in 2019 stood at 8.9 per cent.
The ‘pay penalty’ for women stands at 6.5 per cent, or £1.08 an hour
- While the overall gender pay gap in part reflects differences in the types of industries and roles filled by men and women, a significant part of the gap is a pure pay ‘penalty’ associated with being female.
- Using data for 2015 to 2019, statistical analysis shows that a 6.5 per cent (or £1.08 an hour) gap remains between the hourly pay of men and women even after a variety of personal and job characteristics (such as age, education, industry, occupation and contract type) are controlled for. That means two-fifths of the overall ‘raw’ gap (16.5 per cent or £2.76 an hour) that is recorded between men and women aged 22-64 cannot be attributed to obvious differences in personal experience.
- The pay penalty is larger still for some groups:
- Among women aged 30-50 who have children, the penalty (relative to men of the same age with children) rises to 10.8 per cent (or £2.01 an hour).
- Among black, Asian and ethnic minority (BAME) women aged 22-64, the penalty (relative to white men of the same age) is 16 per cent (or £2.40 an hour).
- Among BAME women aged 22-64 with a reported disability, the penalty (relative to white men of the same age) rises to 18.8 per cent (or £2.81 an hour). That means women in this group are paid £2.81 an hour less than white men with the same qualification levels who are undertaking broadly the same roles in the same industries.
Women’s unpaid work has a huge value
- As of 2015, women spent an average of some 25.5 hours a week on unpaid tasks (including volunteering). That is 60 per cent more than the 16 hours spent by men.
- It also happens that the unpaid activities undertaken by women would have a higher market value than those undertaken by men (childcare vs driving, for example). In other words, they are suffering significant ‘lost earnings’. In 2015, if women had been paid for these activities at the prevailing market rate, they would have earned, on average, an additional £260 a week. Men, by contrast, would have earned just £167 more for their activities.
- Over time, the gender balance in the area of paid and unpaid work has become more even. Between 1974-75 and 2014-15, the amount of time that men aged 16-65 spent on unpaid work increased by just over six hours a week. Over that same period, women reduced the time they spent on unpaid work each week – but only by 0.3 hours. They also substantially increased the time they spent on paid work: overall, in 2014-15 they worked 4.4 hours a week longer than they did in 1974-75, equivalent to 30½ full-time days a year.
- In 2014-15, the total female working week of 51.9 hours was in fact two hours longer than the male average. It was even marginally longer (by 0.3 hours) than the male week in 1974-75. This defies the long-term downward trend in the length of working weeks across most advanced economies.
Women are underpaid by £126 billion
- If the hourly ‘pay penalty’ of £1.08 is applied to the average number of hours now worked by women aged 16-65, each woman can be thought of as being underpaid by around £1,190 a year. Additionally, each woman is missing out on roughly £13,500 for the unpaid work undertaken each year. Each man, meanwhile, is missing out on around £8,665 a year for his unpaid work. This means that, relative to a man, the work of each woman aged 16-65 is undervalued by just over £6,000 a year. On a national scale, that equates to around £126 billion underpayment in total – a sum which is just under half (47 per cent) the total of £267 billion paid to female employees in 2019.
There is appetite for change among the public
- The YouGov survey commissioned by Pro Bono Economics, and carried out on 12 and 13 March 2020, found that just over half (55 per cent) of non-self-employed working adults in Great Britain feel they are underpaid for what they do, with no real difference between women (54 per cent) and men (56 per cent).
- Among all non-self-employed adults, 54 per cent said they would be prepared to reveal their salary to colleagues if it meant that women would become more likely to achieve equal pay. The proportion was unchanged among men and women, but rose to 61 per cent among those aged under 45 and dropped to 46 per cent among those aged 55 and over.
- Looking across all adults in Great Britain, four in ten (39 per cent) said they would favour a basic income for caregivers as a means of recognising the additional burden of unpaid work falling to women. One in three (33 per cent) said they would rather see a rebalancing of unpaid work between men and women without the payment of any income. Overall, just 9 per cent said they would prefer to keep things as they are.
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NOTES TO EDITORS
About the report – Women’s Work: policy, pay, progress and the penalties that remain
This report was originally written to sit alongside Pro Bono Economics’ 2020 Annual Lecture, which was due to take place on 26 March 2020. The lecture was to be delivered by Caroline Criado Perez, with a subsequent panel discussion featuring Samira Ahmed, Professor Diane Coyle and Vicky Pryce. The coronavirus outbreak caused that event to be postponed, and a new date is yet to be confirmed.
The report has been produced for Pro Bono Economics by Jon Franklin and Matt Whittaker, with analytical support kindly volunteered by Kathleen Henehan and Fahmida Rahman of the Resolution Foundation. We are very grateful for their support, and for comments on an earlier draft from Caroline Criado Perez and Sam Smethers. All views and errors remain those of Pro Bono Economics.
All quoted survey figures are from YouGov Plc. Total sample size was 2,287 adults. Fieldwork was undertaken between 12 and 13 March 2020. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
About Pro Bono Economics:
Pro Bono Economics helps charities and social enterprises understand and improve the impact and value of their work, matching professional economists who want to use their skills to volunteer with charities. Set up in 2009, Pro Bono Economics has helped over 400 charities large and small, covering a wide range of issues including mental health, education, employment and complex needs.
Pro Bono Economics is supported by high-profile economists, including Andy Haldane (Bank of England), Sir Dave Ramsden (Bank of England), and Clare Lombardelli (HM Treasury) as Trustees, and Diane Coyle (University of Cambridge), Kate Barker, Lord Jim O’Neill, Robert Peston, Martin Wolf and Lord Adair Turner as patrons. Lord Gus O’Donnell has been Chair of the Board of Trustees since September 2016.