The 14th November 2019 is being incorrectly marked as Equal Pay Day in the UK by the Fawcett Society. By having a campaign name that conflates equal pay issues with the gender pay gap, the Fawcett Society runs the risk of misleading men and women in the UK in their understanding of what these two concepts mean.
If you care about statistics being used correctly then please lobby the Fawcett Society to rename this as Gender Pay Gap day instead.
If you care about issues to do with Equal Pay, then please support the #MeTooPay campaign instead. This is a new campaign, led by Dame Moya Greene, who are explicit about the distinction and are saying, quite rightly, that with the 50th anniversary of the Equal Pay Act taking place next year, cases of unequal pay should not be happening in this day and age.
I had intended to write a short snappy note but a can of worms soon opened! My article is organised as a series of questions & answers as listed below. The first 3 questions provide a concise explanation on the difference between Unequal Pay and Gender Pay Gaps with the other questions providing more depth to my explanation.
- What is Equal & Unequal Pay?
- What is the Gender Pay Gap?
- Why are they not the same thing?
- How is it possible for the 2 figures to conflict like this?
- How do you eliminate a gender pay gap?
- In what way does the Fawcett Society conflate the two?
- Surely unequal pay must be a contributor to the gender pay gap?
- Sorry I need another explanation of the difference!
- Are others conflating the two like the Fawcett Society?
- What is the connection between Bletchley Park codebreakers and gender pay gaps?
- What is the Fawcett Society’s response to this article?
1. What is Equal & Unequal Pay?
The law states that if you and I are doing the same (or essentially similar) job, we cannot be paid differently due to our gender. If one of us is paid less than the other either directly or indirectly due to our gender then an Equal Pay violation has occurred and the situation is called Unequal Pay.
The key to determining Equal Pay issues is that any comparison must be between actual people e.g. you and me or you and a group of people. For example, the BBC presenter Samira Ahmed used Jeremey Vine as her comparator in her claim of unequal pay against the BBC.
2. What is the Gender Pay Gap?
Since 2018, all employers with 250+ staff in the UK, must report the difference in hourly earnings between the median man and the median woman. This difference is known as the Gender Pay Gap. Whilst the median man & median woman will be two specific individuals they are extremely unlikely to be doing the same job. They are instead the chosen representatives of all men and all women working for the employer. If you don’t know what the median is, I explain it in the first point of my post “7 ways to misuse gender pay gap data”.
Employers are also required to report the difference between the average man and the average woman. In this case, the comparison is simply between two statistical artifacts and the average man and average woman need not exist in the employer.
3. Why are they not the same thing?
I hope you can tell from the descriptions I’ve given that they cannot be the same unless all employees in the employer are doing exactly the same job e.g. everyone working for an airline is a pilot. This is extremely rare.
Rather than use words, I will use this graphic instead which shows the hourly earnings of each employee for an employer. This fictional employer has 20 employees, 10 men and 10 women. There are four roles with five employees in each role. The lowest paid role are Administrators, the highest paid are Managers, with Engineers and Analysts in between.
Within each role, the female employees earn 20% more per hour than the male employees. Unless the employer can justify this differential at an Employment Tribunal, this employer is breaking the law as specified in the 1970 Equal Pay Act and are discriminating against men.
With 10 men, the median man is the average of the 5th & 6th men if the 10 men stand in a line in order of their hourly earnings. As highlighted in the graphic, the median man earns £30 per hour and is an Engineer.
With 10 women, the median woman is the average of the 5th & 6th women if the 10 women stand in a line in order of their hourly earnings. As highlighted in the graphic, the median woman earns £24 per hour and is an Analyst.
Therefore, the official Median Gender Pay Gap is 20% i.e. the median woman (an Analyst earning £24/hr) earns 20% less than the median man (an Engineer earning £30/hr). I prefer to state that for every £1 earned by the median man, the median woman earns £0.80.
4. How is it possible for the two figures to conflict like this?
The graphic shows an employer paying a woman 20% MORE than a man for doing the same job whilst at the same time paying the median woman 20% LESS than the median man.
The reason for the conflict is very simple. The majority of women (7 out of 10), who are being paid 20% more for doing the same job as men, work either as Administrators or Analysts earning £12/hr or £24/hr. The majority of men, who are being discriminated against based on their gender since the employer is breaking the Equal Pay Act, work either as Engineers or Managers earning £30/hr or £40/hr.
This tells you that what drives the gender pay gap is the gender ratio across the pay scales and job roles. Women make up 80% of the lowest paid role (Administrators) but only 20% of the highest paid roles (Managers). If there is a difference between the gender ratios then pay gaps can be expected to occur. I currently call this difference in gender ratios FIQG (Female Income Quarter Gap) but I am considering renaming this as the Gender Ratio Differential (GRD) instead.
5. How do you eliminate a Gender Pay Gap?
The first step is to have the same gender ratio for every part of the pay scale. Given that this employer is 50:50 men:women, this means all of the 4 roles need to have 50:50 male:female splits. Note the requirement is only to have the same gender ratios, not 50:50 men:women. So the employer can also eliminate their pay gap by having 80:20 men:women in all roles, a situation that exists when the Gender Ratio Differential is zero.
The second step is to comply with the equal pay act and not discriminate directly or indirectly on gender. So whilst I like to say gender pay gaps and unequal pay are very different things, it is more correct to say that the issue of unequal pay is only a small subset of the larger issue of gender pay gaps.
Finding out what is the best way of achieving these goals is, to my mind, the underlying purpose of the gender pay gap reporting system. By publishing action plans as to their intentions, employers can then report progress over the next few years. That way, we will build up an evidence base of what works and what doesn’t. I have blogged before that this is a Continuous Improvement philosophy, which is something that statisticians can offer considerable expertise in to employers.
6. In what way does the Fawcett Society conflate the two?
If you follow this link, you will see this quote from the Chief Executive, Sam Smethers, which is a response to the latest ONS figures showing the UK’s gender pay gap was 16% in 2018.
“Today’s data shows that this year’s Equal Pay Day , the day in the year when women effectively start to work for free, falls on 14th November. Progress to close the gender pay gap is dismally slow and at this rate it will take 60 years to eradicate it. As we approach the 50th anniversary of the Equal Pay Act women have waited long enough.“
As you can see, she starts and ends with references to Equal Pay and intersperses with two references to Gender Pay Gaps. This is wilful conflation of the two entirely separate concepts as I’ve explained in this post and must be stopped.
This is not the only mistake the Fawcett Society is making but this post would be far too long if I were to enumerate all the errors. I will simply list them and link to another post for explanations.
- Incorrectly comparing ONS ASHE figures with the GPG Reporting figures.
- Calling for pay gap reporting by ethnicity but failing to call for a different system than that used for gender.
- Incorrectly calling for smaller employers to be included in GPG reporting.
7. Surely Unequal Pay must be a contributor to the UK Gender Pay Gap?
As I stated earlier, unequal pay is a small subset of the much larger issue of gender pay gaps. The Fawcett Society itself lists many of the factors that can contribute to a gender gap in this briefing. Note they say in that link, they know unequal pay exists but they provide no data at all on its extent. They merely refer to anecdotal data.
#MeTooPay are going about this in the right way. They are calling for people to send them their stories. This could have the potential to generate a dataset that could be extrapolated into a national estimate of unequal pay (provided the extrapolation is done by a Statistician!).
But you don’t need any anecdotes to verify my statement that unequal pay can only be a small subset of GPG. Take a moment to answer these two questions:-
- What % of women in work are being paid less than they should be i.e. if these women were replaced by men, what % of jobs would see the man being paid more?
- Of those women being paid less than a man, how much on average are they being underpaid?
This is just a thought experiment but start with your friends, family and colleagues as a data set to answer the question. For myself, I find it hard to believe that the answer is greater than 20% for both questions i.e. at most 20% of women are underpaid and they are being underpaid by up to 20% on average.
Let’s now do the maths. 20% of 20% means that nationally, women are being paid 4% less than men. This is my estimate of the maximum extent of unequal pay issues. With a larger set of submitted data, as being collected by #MeTooPay, this estimate could be refined further. However, the ONS ASHE figure for the gender pay gap is 16% which shows that unequal pay can at most be contributing a quarter of this gap. Other factors must be more important.
Let’s turn it around. What would the answer to the two questions need to be to attribute the entire 16% to unequal pay? One answer is 50% of women are being underpaid by an average of 33%. That is pie in the sky.
8. Sorry, I need another explanation of the difference!
Supposed the ONS ASHE had reported a gender pay gap of zero. Would you celebrate this as a sign of success for the Equal Pay Act? Of course not, unequal pay can still occur and probably will still occur.
Alternatively, suppose a widespread series of equal pay audits was carried out in thousands of employers and none show an issue but the ONS still reports a gender pay gap of 20%. Would you celebrate the success of the Equal Pay Act? Of course you would, since no equal pay violations have been found.
9. Are others conflating the two like the Fawcett Society?
Yes they are unfortunately. Just do a search for “Gender Pay Gap” on any social media platform e.g. Google, Twitter, Facebook, Quora, etc and you will immediately find around a half of the search results will incorrectly conflate the two. Whilst giving evidence to the Treasury Select Committee in June 2019, I noted that Kamala Harris, a candidate for the Democrats presidential nomination in 2020, and the UN’s Women’s organisation had so conflated.
Going forward, I intend to track the degree of conflation on these platforms and I will report my findings on my blog.
10. What is the connection between Bletchley Park codebreakers & gender pay gaps?
Edward H. Simpson (1922-2019) worked as a codebreaker of Italian & Japanese codes at Bletchley Park between 1942 & 1945 and is more famous for his paper of 1951 which described an effect which became known as Simpson’s Paradox. As you can see, he died earlier this year and a collection of obituaries were published here.
I first learned about Simpson’s Paradox at Birkbeck College in 1997 when I was studying for my MSc. The example they used was the Gender Sentencing Gap whereby the average prison sentence men received was over twice that for women. Clearly this is an outrageous injustice that should motivate social justice warriors worldwide. Then they showed that when you broke the data down by type of crime committed, women in fact got longer sentences than men for the same crime.
Simpson’s paradox has been observed in numerous situations. One description that is sometimes used is an onion. When you look at the whole onion, say the ONS ASHE gender pay gap, you see one picture but when you strip away the top layer you see a different picture, say the GPG Reporting data. As you strip away further layers, more pictures emerge including some that are the complete opposite of what was seen before. This wikipedia link for Simpson’s Paradox describes a gender discrimination example for UC Berkeley where overall, men were more likely to be admitted than women but within the majority of departments, women were more likely to be admitted than men.
The ONS ASHE gender pay gap figure is the whole onion, unequal pay is one of the layers but the Fawcett Society has no idea how far down that layer is. Until they do, Equal Pay Day 14th November 2019 should be renamed Gender Pay Gap Day and they should collaborate with #MeTooPay to discover where Equal Pay Day actually is which I suspect is likely to be around Christmas.
11. What is the Fawcett Society’s response to this article?
“Fawcett marks Equal Pay Day as ‘the point in the year when, based on gender pay gap data, women stop earning relative to men.’ It’s a campaign initiated in America in the 1990s, run in numerous countries, and led by Fawcett in the UK.
We are very clear on the difference between pay discrimination (women’s right to equal pay for equal work) and the gender pay gap (the difference between the average hourly pay of women and men). Our briefing on that point is available here: https://www.fawcettsociety.org.uk/Handlers/Download.ashx?IDMF=7aed6cd4-5e2e-4542-ad7c-72dbbbe14ee3
However, we are also clear that a lot of evidence points to continuing pay discrimination against women in the UK, which requires a combination of legal and policy reform and cultural change to stamp out. That includes the cases brought against organisations like local councils, supermarkets, FTSE100 companies, and the BBC, finding that both individual women and groups of women continue to experience discrimination. Multiple statistical analyses also find a large residual effect on differences in pay of being a woman, after the often-cited causes of the gender pay gap have been taken into account. This cannot constitute proof of the size of discrimination, but it suggests that this is no small problem. Pay discrimination is by its nature hard to quantify.
We campaign on different issues impacting on workplace gender inequality each Equal Pay Day, from flexibility and caring responsibilities in 2017, to valuing work that women are more likely to do in 2016. Tackling pay discrimination has been and will be a key part of our campaigning, alongside our Equal Pay Advice Service offering legal support to people who have experienced it.
The difference between the gender pay gap and pay discrimination, and the link between them, are both important and we welcome anyone seeking to improve awareness of the continued difference in pay between women and men.“
– Need help with interpreting your gender pay gap? –
I offer the following services.
- Analytics – I can dig deep into your data to identify the key drivers of your pay gaps. I can build a model using a large number of variables such as pay band, seniority, job function, location, etc and use this to identify the priority areas for closing your gaps.
- Training – I run training courses in basic statistics which are designed for non-statisticians such as people working in HR. The courses will show you how to perform the relevant calculations in Microsoft Excel, how to interpret what they mean for you and how to incorporate these in an action plan to close your gaps.
- Expert Witness – Has your gender pay gap data uncovered an issue resulting in legal action? Need an expert independent statistician who can testify whether the data supports or contradicts a claim of discrimination? I have experience of acting as an expert witness for either plaintiff or defendant and I know how to testify and explain complex data in simple language that can be easily understood by non-statisticians as can be seen from my testimony to the Treasury Select Committee.
If you would like to have a no-obligation discussion about how I can help you, please do contact me.
– Want to know more about the gender pay gap? –
I have written a number of articles about pay gaps covering these topics:-
- What gender pay gap data tells us, what it doesn’t tell us and how it can be misused
- Three distinct errors that have been made by at least 10% of all organisations when submitting their gender pay gap data
- How to distinguish between a true pay gap and a pay gap that arises naturally due to the laws of chance
- My 12 steps to improve public confidence in gender pay gap data
- My evidence to the Treasury Select Committee on how gender pay gap reporting could be improved
- Calculate your gender pay gap by downloading my free spreadsheet calculator!
- Did the gender pay gap narrow in 2018?
- How to identify unusual year on year changes in gender pay gaps
- How to close your pay gap with DMAIC
- Should the UK introduce Ethnicity Pay Gap reporting?
- Frequently Asked Questions about gender pay gaps.
Finally visit my Twitter thread to see my comments on gender pay gaps in the media. Some notable ones are here.