The Prime Minister David Cameron has announced that all companies who employ more than 250 people will now have to publish the average earnings for the men and women in their company. But the decree has sparked anger as free market campaigners have pointed to a body of evidence showing that the gender pay gap is a myth.
Writing in The Times, David Cameron said: “Under the coalition government, the gender pay gap narrowed. For full-time workers under 40, it is almost zero. But overall, a woman still earns just 80p for every £1 earned by a man. That is a scandal — and I’m determined to close the gap.
“We have already introduced equal pay audits for those companies that have lost employment tribunals. But today I’m announcing a really big move: we will make every single company with 250 employees or more publish the gap between average female earnings and average male earnings. That will cast sunlight on the discrepancies and create the pressure we need for change, driving women’s wages up.”
He cited the rise in minimum wage to “over £9 by 2020”, as announced by the Chancellor George Osborne in his budget last week, as a measure which will “help close the gender pay gap. But,” he added, “we need to go further, and that’s why introducing gender pay audits is so important.”
Other measures to tackle gender equality in the workplace will include widening “girls’ horizons” with a new “career service”, and “campaigning to drive up the number of girls doing science, tech, engineering and manufacturing”; helping “more women to reach the top” by lobbying business to hire more female managers and CEOs; and addressing childcare by legislating “for 30 hours of free childcare for all three and four- year-olds.”
Mr Cameron said: “As a father of two daughters, I want them to experience complete gender equality in the workplace when they start their careers.” The good news for Mr Cameron, and his daughters Nancy and Florence, is that they will: studies show that women in the early stages of their career actually earn more than their male counterparts; up to 20 percent more in some American cities. They’re also doing better at school and university, and have been for decades.
In fact, when variables such as level of education, time off to raise children, and hours worked per week into account, the gender pay-gap essentially disappears.
Commenting on David Cameron’s announcement, Head of Communications at the Adam Smith Institute Kate Andrews (a woman) said:
“It’s a sad state of affairs when even the Prime Minister is promoting the gender pay gap myth. According to the ONS, women between the ages of 22 – 39 working more than 30 hours a week earn, on average, more than their male counterparts.
“Forcing business with more than 250 employees to publish their ‘pay gaps’ will only promote more myths and confusion. There is no such thing as an ‘average salary’; education, previous experiences, negotiating tactics, and unique abilities all contribute to one’s salary, none of which can be known by comparing John and Jane’s annual take-home pay on a spreadsheet.
“Furthermore, men and women often choose to make difference career decisions – usually based on flexibility and rigor – so they can embrace other, equally meaningful parts of their life; this, naturally, can be reflected in their pay.
“The Prime Minster’s claim that the implementation of the National Living Wage will primarily help women in lower paid jobs is a weak justification for another recent policy faux pas. It is women, particularly who are less-skilled or less-educated, who are most likely to be part of the 60,000 who are estimated by the OBR to be cut by their employers when they are unable to afford this wage increase.
“FTSE 100 companies have met the proposed target for 25% female board members not because the government told them to, but because women, through their own abilities and determination, are thriving in the work place more than ever before. But leave it to the government to try to usurp their achievements.”