Current Pay Gap Gender Reassignment

Britain’s gender pay gap among full-time workers has fallen to the lowest level since records began 20 years ago, but the TUC warned the UK was still “decades away” from equal pay for men and women.

The gap between what male and female workers earn – based on median hourly earnings – fell to 9.1% in April, from 9.4% a year earlier, according to the annual snapshot of hours and earnings from the Office for National Statistics. It was 17.4% in 1997 when the ONS first collected the data.

But Frances O’Grady, general secretary of the TUC, said progress was too slow and urged the government to put more pressure on firms to close the gap.

“The full-time gender pay gap has inched a bit smaller. But there is still a chasm between men and women’s earnings. At this rate it’ll take decades for women to get paid the same as men,” she said.

“The government needs to crank up the pressure on employers. Companies shouldn’t just be made to publish their gender pay gaps. They should be forced to explain how they’ll close them. And those bosses who flout the law should be fined.”

Men working full-time earned an average of £592 a week in April compared with £494 for women. At 34%, the occupations with the biggest pay gap among full-time workers were town planners, musicians, and assemblers of vehicles and metal goods.

Real pay fell for the first time since 2014, according to the ONS survey, as prices rose at a faster pace than wages. Weekly earnings adjusted for inflation were 0.4% lower in April compared with a year earlier.

Lack of pay growth has left workers £38 a week worse off than they were before the financial crash, O’Grady said.

“Most families still haven’t recovered from the financial crash, yet their pay packets are now taking another hammering. It’s leaving millions of working people facing hardship and getting deeper into debt,” she said.

It is the latest evidence of the incomes squeeze suffered by UK households in the aftermath of the Brexit vote, which triggered a sharp fall in the value of the pound, pushing up the costs of goods imported from abroad and feeding through to higher UK inflation and shop prices.

Inflation was 2.6% in April, compared with just 0.7% in April 2016. It has since risen to 3% in September, the highest in almost five and a half years.

Carole Easton, chief executive of Young Women’s Trust, said young people were being hit hard by the fall in real wages.

“With wages falling and interest rates set to rise, young people – many of whom are not earning enough to cover the basics and are falling into debt – are at the sharp end,” she said.

“It’s even harder for young women, who still face a significant gender pay gap. At the current rate of progress, the pay gap will still exist by the time today’s young women are retired.”

Average gross weekly earnings for full-time workers, before adjusting for inflation, were £550 in April, up 2.2% from £539 in 2016. Pay rose 2.8% to £532 a week for private-sectors workers, and 0.9% to £599 for those working in the public sector.

The ratio of women’s and men’s median annual earnings was 80.5 percent for full-time, year-round workers in 2016, an improvement of 0.9 percentage points since 2015.[i] This means a gender wage gap for full-time, year-round workers of 19.5 percent. Women’s median full-time, year-round earnings in 2016 were $41,554 compared with $51,640 for men; women’s 2016 earnings increased by 0.7 percent compared to 2015 while men’s declined by 0.4 percent.[ii]

 

If the pace of change in the annual earnings ratio continues at the same rate as it has since 1960, it will take another 43 years, until 2059, for men and women to reach parity.[iii]

 

An alternative measure of the wage gap, based on the ratio of women’s to men’s median weekly earnings for full-time workers, was 81.9 percent in 2016. The annual gender earnings ratio for full-time year-round workers, which includes self-employed workers, tends to be slightly lower than the ratio for weekly earnings (which excludes the self-employed and earnings from annual bonuses, and includes full-time workers who work only part of the year). The the gender earnings ratio based on weekly earnings also showed a slight increase between 2015 and 2016 (Figure 1).

 

Figure 1. The Gender Earnings Ratio, 1955-2016, Full-Time Workers

Both earnings ratios (for weekly and for year-round, full-time workers) reflect gender differences in hourly wages and the number of hours worked (among full-time workers); 62.2 percent of women with earnings worked full-time, year-round in 2016, compared with 74.8 percent of male workers, an increase compared with 2015 for both genders.[iv]  If part-time and part-year workers were included, the ratio of women’s to men’s earnings would be lower, as women are more likely than men to work reduced schedules, often in order to manage childrearing and other caregiving work. Women are also more likely than men to work in occupations where fewer jobs are offered on a full-time basis or where hours vary from week to week.[v]

 

Real median full-time, year-round earnings increased or stayed unchanged for women in all major race and ethnic groups except Black women (Table 1).[vi] Earnings for Black women working full-time, year-round declined by 1.3 percent between 2015 and 2016. White women’s earnings increased by 4.9 percent, Asian women’s by 2.8 percent, and Hispanic women’s by 0.1 percent. Men’s earnings increased or stayed unchanged for every major race and ethnic group except Black men. Women of all major racial and ethnic groups earn less than men of the same group. With the exception of White workers, earnings increases were more substantial for men than women of the same race or ethnicity.

 

Black and Hispanic workers of both sexes earn considerably less than White and Asian workers; as a result, the gender earnings ratio based on earnings of men of the same race or ethnicity is higher than the ratio for women of all races considered together, meaning the within-race gaps are narrower. The gender earnings gap based on comparison with men of the same race/ethnicity widened for all groups apart from White workers in 2016. The gender earnings ratio for White workers increased from 75.3 percent in 2015 to 79.0 percent in 2016. The gender earnings ratio fell substantially for Hispanic workers, from 87.2 to 84.4 percent, and for Black workers from 88.1 to 87.5 percent (Table 1). Asian workers as a group have the highest median annual earnings, primarily because of historically higher rates of educational attainment for both genders; however, Asian women earned only 76.9 percent of Asian men’s earnings in 2016, a marked decrease compared with 78.3 percent in 2015.

When the gender earnings ratio is measured using White men’s earnings as the comparison, it shows marked disadvantage for Hispanic and Black women. Hispanic women earned just 54.4 percent (unchanged from 2015) and Black women earned just 62.5 percent (down from 63.3 percent in 2015) of White men’s median annual earnings in 2016 (Table 1). Median earnings for a year of full-time work for Hispanic women are below the qualifying income threshold for eligibility for food stamps for a family of four; in 2016 this was $31,641 per year, 130 percent of the federal poverty threshold for a family of four.[vii]

Table 1. Median Annual Earnings and Gender Earnings Ratio for Full-Time Year-Round Workers age 15 Years and Older by Race/Ethnicity, 2015 and 2016

Notes: White alone, not Hispanic; Black alone or in combination (may include Hispanic); Asian alone or in combination (may include Hispanic); and Hispanic/Latina/o (may be of any race).

Source: U.S. Census Bureau, Current Population Survey. 2017. “Historical Income Tables: Table P-38. Full-Time, Year-Round Workers by Median Earnings and Sex: 1987 to 2016.” <https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-income-people.html>

 

Closing the wage gap is not a zero-sum game—gains for one gender do not require losses for the other. For the gender wage gap to close, women’s real wages must rise faster than men’s, and as the economy becomes more productive, one would expect real wages to rise for both men and women. Yet, as can be seen from Table 2, since 1975 real annual earnings for men have remained virtually unchanged (and fell in 2016), while women’s real earnings have increased across the same time period (but are also only maginally higher than they were a decade ago, in 2007). Over the same period, women’s earnings have become increasingly important to family incomes.

Table 2. The Gender Wage Ratio and Real Earnings, 1955-2016, Full-Time Workers

Notes for Figure 1 and Table 2: Annual earnings data include self-employed workers; weekly data are for wage and salary workers only. Annual earnings are for people 15 years old and older beginning in 1980 and people 14 years old and older as of the following year for previous years. Before 1989 annual earnings are for civilian workers only. Weekly earnings are for full-time civilian workers aged 16 and older in and are not restricted to full-year workers. Full-time is work for at least 35 hours per week, full-year for at least 50 weeks per year. Annual median earnings data are typically released in September by the U.S. Census Bureau, and the annual average of weekly median earnings in February by the U.S. Bureau of Labor Statistics. Both data series are derived from the Current Population Survey. Adjustments for data from earlier years to 2016 dollars are computed on the basis of the Consumer Price Index Research Series (CPI-U-RS); U.S. Bureau of Labor Statistics < https://www.bls.gov/cpi/research-series-allitems.pdf > (accessed September 2017). From 2014 onwards, the Census Bureau has used revised questions on income and earnings; in 2013, data was collected using both the old and the new questions; the gender earnigs ratio under the old methodology was 78.3 percent, und the new methodology 77.6 percent.6

Sources for Figure 1 and Tables 1 and 2: Annual data: 1955: Francine D. Blau and Marianne A. Ferber, The Economics of Women, Men, and Work, 2nd ed. (Englewood Cliffs, NJ: Prentice-Hall, 1992); 1960-2016 U.S. Census Bureau, Current Population Survey, 2016 Annual Social and Economic Supplement TableP-38. Full-Time, Year-Round Workers by Median Earnings and Sex: 1960 to 2016; <https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-income-people.html> (retrieved September 2017). Weekly data: 1980-2016: U.S. Bureau of Labor Statistics, Median weekly earnings of full-time wage and salary workers by selected characteristics, Annual Averages <http://www.bls.gov/cps/cpsaat37.pdf> (retrieved February 2017).

Notes

[i] Jessica L. Semega, Kayla R. Fontenot, and Melissa A. Kollar. 2017. “Income and Poverty in the United States: 2016.” Current Population Reports P60-259 U.S. Census Bureau. <https://www.census.gov/content/dam/Census/library/publications/2017/demo/P60-259.pdf>; p.10-11.

[ii] Jessica L. Semega, Kayla R. Fontenot, and Melissa A. Kollar. 2017, op.cit., p.6; the changes are not statistically significant.

[iii] Institute for Women’s Policy Research. 2017. “Women’s Median Earnings as a Percent of Men’s Median Earnings, 1960-2016 (Full-time, Year-round Workers) with Projection for Pay Equity in 2059. IWPR Publication #Q064. <https://iwpr.org/publications/women-men-earnings-ratio-1960-2016-pay-equity-2059/>

[iv] Jessica L. Semega, Kayla R. Fontenot, and Melissa A. Kollar, op. cit. p.11.

[v] Elyse Shaw, Ariane Hegewisch, Emma Williams-Baron, Barbara Gault. 2016. Undervalued and Underpaid in America: Women in Low-Wage, Female-Dominated Jobs. IWPR Report #D508. Washington, DC: Institute for Women’s Policy Research <https://iwpr.org/publications/undervalued-and-underpaid-in-america-women-in-low-wage-female-dominated-jobs/>.

[vi] Percent change in women’s median annual earnings calculated by IWPR based on the U.S. Census Bureau, Current Population Survey, 2017 Annual Social and Economic Supplement TableP-38. Full-Time, Year-Round Workers by Median Earnings and Sex: 1960 to 2016. <https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-income-people.html>

[vii] The federal poverty threshold for a household of four in 2016 was $24,339 (U.S. Census Bureau. 2017. “Poverty Thresholds.” https://www.census.gov/hhes/www/poverty/data/threshld/ (Last revised September 8, 2017). At 130 percent of poverty (the threshold relevant for food stamp eligibility) this is $31,641 annually, or $608 per week (assuming full-time work for 52 weeks).

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