The pay gap, record employment and an extra £23 billion to GDP: women and the workplace

Published: 21st Sep 2015

In brief

Claim

The gender pay gap is lower than it's ever been before.

Conclusion

This is true. The pay gap is at a record low for full-time employees and for employees overall.

 

There are more women in the UK in work than ever before.

 

This is true, but it's almost always true: employment grows as the population grows. The employment rate for women aged 16-64 was also at a record high.

 

If women in the UK reached their full economic potential it would be worth £23 billion.

 

This figure is from 2006. Some of the gains may have increased with the size of the economy, and higher prices mean that the cash figures would be larger. Some of the gains may already have been achieved.

Claim 1 of 3

Last week, we looked at some of the claims the new Shadow Chancellor John McDonnell made on BBC Question Time.

As promised, we've looked at some of the other claims made in the same broadcast. This time we've taken an exchange between Environment Minister Elizabeth Truss, and broadcaster and Women's Equality Party co-founder Sandi Toksvig on the economic fortunes of women.

"...If you unleash the full potential of women in this country it would be worth £23 billion"

Sandi Toksvig

The Women's Equality Party has told us this comes from a 2009 report by the Women and Work Commission. Its estimate, made in 2006, was that reducing the gender segregation of jobs and increasing women's employment could be worth £15-£23 billion (or 1.3-2% of GDP). It's hard to say whether these were reasonable estimates at the time as the report didn't lay out all of the calculations used to reach the figures.

Overall it's possibly not wise to treat decade old figures as currently applicable. For instance, the pay gap has shrunk over that period and women's employment rates have risen, so some of the gains envisaged by the Commission may already have been achieved.

On the other hand, the the economy has grown and prices have risen. Some of these gains will increase with the size of the economy and the number of workers who can move to more productive jobs, and higher prices mean that the cash figures would be higher in today's money.

"...We have more women in work than ever before"

Elizabeth Truss

This is true. In June 2015, there were 14.6 million women in employment in the UK, and  there were 26.6 million women over the age of 16 in the UK household population. Both of these figures were at record highs, just as they were in most months in the last year.

The number of women in employment was at a record high in 11 of the last 12 months, and the number of women in the country was at a record high in all 12.

The employment ratethe proportion of working age women who are employed— was also at a  at 69%, partly due to changes to state pension ages.

The employment rate is calculated for women aged from 16 to 64. As the state pension age for women rises from 60 to 65, women are likely to work longer. That increases the employment rate.

The employment rate is a more meaningful measure of how well we're doing getting women into work. The population is growing, and as it does so the number of people in employment will tend to grow with it (barring exceptional periods like the recession).

"...The gender pay gap is lower than it's ever been before"

Elizabeth Truss

This is true. The pay gap is at record lows for full-time employees and for employees overall. This followed a long term trend and it's not necessarily the case that the fall was driven by recent government action.

Many of the factors behind changes in the pay gap—like higher levels of university education and work experience—are the result of decisions taken decades ago.

The Office for National Statistics measures the pay gap by looking at the difference between what the middle earning man and woman get paid before taxes. Its preferred measure (for full-time employees) of the gap put it at 9.4% in 2014, while for employees overall it sat at 19.1%.

For part-time workers, the pay gap didn't change significantly and in fact it's actually widened over the long term. However, for part-time workers the pay gap is negative: the median earning woman earns more than the median earning man.

None of these statistics are designed to show differences in pay for the same work. They don't take into account relevant factors like the industry or role worked in, or the qualifications and experience of workers, for example.

 


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