The Gender Pay

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The Gender Pay The Scottish Parliament and Scottish Parliament Infor mation C entre l ogos. Financial Scrutiny Unit Briefing The gender pay gap – facts and figures 2016 26 January 2017 17/06 Andrew Aiton The Office for National Statistics released the Annual Survey of Hours and Earnings (ASHE) 2016 provisional results on 26 October 2016. This briefing provides an overview of the gender pay gap in Scotland. CONTENTS EXECUTIVE SUMMARY .............................................................................................................................................. 3 COMPARING PAY BY GENDER................................................................................................................................. 3 HOW IS THE GENDER PAY GAP CALCULATED? ................................................................................................ 4 WHY IS THE MEDIAN USED? ................................................................................................................................ 5 HOW DOES WOMEN’S PAY COMPARE TO MEN’S?............................................................................................... 5 WHAT IS THE FULL-TIME PAY GAP? .................................................................................................................... 5 How do the latest figures affect the National Indicator on the Gender pay gap? ................................................ 6 How does the pay gap compare by level of pay? ................................................................................................ 6 THE GENDER PAY GAP FOR ALL WORKERS ..................................................................................................... 7 PART-TIME PAY BY GENDER ................................................................................................................................ 8 ARE THERE OTHER WAYS OF COMPARING MEN’S AND WOMEN’S PAY?..................................................... 8 WHAT DOES THE MEAN PAY GAP LOOK LIKE? ................................................................................................. 8 HOW DOES THE PAY GAP IN SCOTLAND COMPARE TO THE REST OF THE UK? ........................................... 9 HOW HAS THE PAY GAP CHANGED OVER TIME?............................................................................................... 10 HOW DOES PAY COMPARE BY AGE? ................................................................................................................... 11 PUBLIC/PRIVATE SECTOR PAY ............................................................................................................................. 11 PAY GAP BY OCCUPATION .................................................................................................................................... 12 PAY GAP BY INDUSTRY .......................................................................................................................................... 13 ANNUAL SURVEY OF HOURS AND EARNINGS (ASHE) DATA ........................................................................... 16 SOURCES .................................................................................................................................................................. 17 RELATED BRIEFINGS .............................................................................................................................................. 18 2 EXECUTIVE SUMMARY This briefing looks at data on pay by gender from this year’s Annual Survey of Hours and Earnings (ASHE) (ONS 2016a) produced by the Office for National Statistics (ONS). It provides information on the gender pay gap for a number of different demographics and labour market conditions. More information about ASHE can be found in the annex. Key points from the latest data: When comparing median or typical pay for all employees men make more money than women. The pay gap for all employees in Scotland is 15.6% compared to 18.1% in the UK. The gender pay gap in Scotland for full time employees is 6.2%, lower than the UK overall at 9.4%. Since 1997 the gender pay gap in Scotland for full-time employees has fallen from 18.4% to 6.2%. Women are paid more than men for part-time work when comparing the median or typical pay. When looking at median pay, women across most age groups are paid less than men. The pay gap increases for women over the age of 40. Between the ages of 30 and 39 women are paid more than men. When looking at occupations, the largest pay gaps are found in skilled trades and management. COMPARING PAY BY GENDER Overall, women can expect to earn significantly less than men over their entire careers (Fawcett Society 2017). This section looks at the key issues when comparing women’s pay with men’s. The gender pay gap is made up of a complex set of factors. The main issues to consider when comparing pay by gender are set out below. Lack of flexible working: Women tend to take on caring responsibilities and due to a lack of flexible working, will end up seeking part-time work. 42% of women work part-time compared to 11% of men (nomis 2017). As full-time wages tend to be higher, the average income for women is likely to be lower. Figure 1: Proportion of employees working full-time and part time by gender in Scotland - Jul 2015-Jun 2016 Source: Annual Population Survey, nomis Occupational segregation: Women are more likely to work in low paid clerical work and “elementary” occupations such as cleaning and catering. They are also less likely to be found in senior positions. The European Commission highlights that even in those sectors dominated by women they are under-represented in senior positions. (EC 2014) 3 Figure 2: Proportion of men and women in employment by occupation in Scotland - Jul 2015-Jun 2016 Source: Annual Population Survey, nomis Discrimination: Despite the Equal Pay Act 1970 there is still discrimination in some pay systems where women are paid less for work that is similar, or the same value as male colleagues’ work. Men are more likely to work overtime: Women are less likely to work overtime due to caring responsibilities. Figure 3: Weekly median hours of paid overtime in Scotland by Gender - 2016 Source: Annual Population Survey, nomis HOW IS THE GENDER PAY GAP CALCULATED? Men’s and women’s earnings are compared by looking at the difference between their earnings as a percentage of men’s earnings, as set out in figure 4 below. This is known as the gender pay gap. To calculate the pay gap, the ONS uses median hourly pay excluding overtime, as it controls for men being more likely to work overtime. Figure 4: How to calculate the pay gap 4 WHY IS THE MEDIAN USED? ASHE provides both the mean and median values for earnings. As discussed above, the median is generally used to calculate the gender pay gap. The mean, or average, is calculated by adding together all the values within a data set and dividing the total by the number of values. This means that the mean result is susceptible to influence from outliers. The median is the middle value of a set of data and is therefore more representative of the “typical value” within a data set. Figure 5 compares the median and mean for a data set with a small number of outliers. Unless otherwise stated the median estimates have been used rather than mean. Figure 5: Comparing mean and median HOW DOES WOMEN’S PAY COMPARE TO MEN’S? Comparing pay for men and women is complex as there is no single measure which adequately represents the complex issues underlying differences between men’s and women’s pay. (Scottish Government 2016) This section looks at the pay gap for: Full-Time employees. All Employees. Part-time employees. Women working part-time and Men working full-time. WHAT IS THE FULL-TIME PAY GAP? The main indicator for the gender pay gap, used by the Scottish Government, is comparing hourly pay excluding overtime for full-time workers. Using full-time pay controls for the fact women are more likely to work part-time. The full-time pay gap in Scotland is 6.2% which is lower than the UK figure of 9.4%. Women in Scotland have higher median full-time pay than in the UK as a whole. 5 Table 1: Gender pay gap for full-time employees - 2016 Men’s hourly pay (£) Women’s hourly pay (£) Pay Gap Scotland 13.85 13.00 6.2% UK 14.16 12.82 9.4% How do the latest figures affect the National Indicator on the Gender pay gap? Scotland Performs is the Scottish Government’s tool for reporting on how the country is performing. It does this by measuring performance against a number of Performance Targets and National Indicators. One of the Indicators in Scotland Performs is: “Reduce the pay gap” The Government specifies that a decrease of 1.5 percentage points or more suggests that the position is improving an increase of 1.5 percentage points or more suggests the position is worsening. The decrease of 1.48 percentage points (when rounded to 2 decimal places) over the year means that the indicator is maintaining its performance. Figure 6: The Pay Gap National Performance Indicator – current performance Source: Scottish Government 2016c How does the pay gap compare by level of pay? At all levels of pay for full-time employees men earn more money. The largest gap in earnings is in the top 10% of earners. This can be explained as Men are currently more likely to work in senior positions than women. Men dominate the higher paid sectors such as engineering, finance and banking. 6 ASHE provides data on pay by different levels of income. It does this by splitting earners
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