There was a lot of talk in 2020 and 2021 about the impact of the pandemic on women and the extent of the setback to their finances. As inflation exploded into double-digit territory between September 2022 and March of this year, the wider conversation understandably shifted to the struggles of all consumers in the face of the cost-of-living crisis.
Only a fortunate few have not been affected to some degree by the surging cost of energy, fuel, food, and nearly everything else. And while inflation is receding, it is still far too high with prices going up from a baseline inflated by the energy price shock. When every penny is a hostage, pay disparity becomes much more significant.
So with International Equal Pay Day having just passed, what do we know so far about the Covid impact on the UK’s gender pay gap?
According to the latest data on this subject from the Office for National Statistics (ONS), the UK’s gender pay gap has fallen by about a quarter over the last decade. However, the gap is fluctuating.
Women who worked on a full-time basis in 2019 earned 9% less than their male counterparts. Following the upheaval of the initial wave of the pandemic, including the distorting effect of the widespread use of furlough to preserve jobs during lockdown, the gap fell to 7.7% in 2021. But by 2022 it was back up at 8.3%.
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The trend for part-time workers remained on a downward trajectory, albeit from a higher level: 2019’s gender pay gap of 17.4% dropped to 15.1% in 2021 and edged a bit lower again to 14.9% in 2022.
The reason for the substantive difference between the two is because women fill more part-time jobs than men, and in comparison to full-time employment, part-time work has lower hourly median pay. So that’s fewer hours with less paid per hour, and for many women a further penalty of nearly 15% compared to their male counterparts.
The gender pay gap is a stark representation of inequality and has been public knowledge for years, yet many still choose to overlook or dismiss it. Launched in 2019, International Equal Pay Day is marked by the United Nations on September 18 to recognise this ongoing injustice which it attributes to “the historical and structural unequal power relations between men and women”.
Women around the world picked up more of the extra chores and childcare during the pandemic, sharpening the focus on the issues that already existed for female professionals.
One study by De Montfort University Leicester from the opening months of lockdown in 2020 found that among co-parenting couples, 75% of women were responsible for children’s activities compared to just 18% of men. When is came to meal planning and provision, 67% of women took the lead versus 29% of men, while cleaning and tidying saw 64% of females taking responsibility versus 14% of males. Findings such as those were repeated again and again and again in thousands of studies from countries around the world.
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Childcare is of course again available, but the average cost in the UK for 25 hours per week of nursery care for a child under the age of two now stands at more than £7,700 per year. For many the numbers simply don’t add up – a career break (most often for mum) to stay at home with the kids is the most sensible option.
This brings us back around to those latest statistics from the ONS which support the theory of the “career break penalty” for those with a gap in their CV.
Looking at the gender pay gap by age range, the ONS found it to be the lowest (3.2%) among those under the age of 40 who work full-time. But between the ages of 40 and 49 it jumps to 10.9%, reflecting the lost years of earnings and promotion opportunities.
All age groups in the UK experienced a decrease in the gender pay gap between 2019 and 2020, and in 2021 the gap across all age groups increased from the previous year. In 2022, the pay gap rose again for those between the ages of 22 and 29, 30 and 39, and those aged 60-plus.
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All of these figures are distorted by the effect of furlough and job losses that tended to fall heaviest in sectors such as retail and hospitality where female employees predominate, so it will require a few more years of data to establish firm trends. The same goes for the more uplifting revelation that the largest fall in the gender pay gap since before the pandemic was among managers, directors and senior officials, from 16.3% in 2019 to 10.6% in 2022.
This reflects some signs of more women holding higher-paid managerial roles. This occupation group has one of the highest median pay levels for full-time employees, and therefore a strong impact on the overall gender pay gap figure.
There was further positive news yesterday in a study from Fidelity International which found that despite the financial challenges, many women are gaining confidence in managing their money as a result of the pandemic and ensuing cost-of-living crisis.
When asked to reflect on the last five years, 31% of women said they feel more confident about managing their own money and day-to-day spending. While there are many factors behind this, 66% of those surveyed said the pandemic and double-digit inflation have forced people to take more control of their money.
There is much still required to level the financial playing field, but even slow progress is welcome. With the business benefits and financial returns that accompany diversity at all levels within an organisation, it would be great to see the campaign for pay equality gather steam – and it certainly can’t afford to shift into reverse.
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