Mind the (Gender Pay) Gap

While I don’t suppose it will protect me from accusations of ‘mansplaining’, I am going to preface this blog with two pre-emptive statements. Firstly, I am wholly committed to eliminating sex discrimination in the workplace, unequal pay, and the gender pay gap. And I have devoted a fair bit of my working life to that end, not least by making the case for public policy that facilitates and supports more shared parenting and eldercare, and that ensures effective access to justice via the employment tribunal system for workers subjected to discrimination or other unlawful treatment at work.

Secondly, I burn no candle for the ‘lifestyle’ retailer Oliver Bonas. I do shop there fairly often, mostly to buy jewellery as gifts for female friends and lovers*. So yeah, I like some of their stuff. But until last week I knew little more about the company than the location of two or three of its stores.

However, I am one of those doomsayers who have long expressed doubts as to whether the particular gender pay gap reporting regime which came into force in April 2017 – under which organisations with 250 or more employees have to publish gender pay gap data by 4 April this year (or 30 March this year for public sector employers), and annually thereafter – will do much if anything to change employer behaviour in a way that will reduce the overall gender pay gap (GPG).

This is partly because, as I noted in 2014, when policy wonking for Working Families, “discriminatory pay by employers is just one of several factors behind the gender pay gap, and is quite possibly one of the least influential, overall (which is no consolation if you are one of the all too many women subject to such discrimination).” Occupational segregation, and the substantial impact on women’s earnings of taking time out of the labour market to have and care for children, are arguably more influential factors. But it’s also because, as employment lawyer and blogger Darren Newman noted earlier this month, the Tory/Liberal Democrat Coalition-devised GPG reporting regime:

“requires absolutely no meaningful transparency about who gets paid what or how employers reward employees.  Instead we get some very selective statistics, shorn of all context and telling us next to nothing of any use.

And that is assuming that the figures being reported are even accurate. The Financial Times has done some really good work picking apart some of the more suspiciously improbable entries on the Government website. Just wait until there are more than 9,000 entries – how on earth will you be able to tell whose figures are accurate and whose aren’t?”

Given our doubts about the value of the data required by what we regard as a deeply flawed GPG reporting regime, some of us doomsayers have also worried aloud about the scope for misuse and misrepresentation of that data. Because, of course, unlike unequal pay, having a gender pay gap is not unlawful. And for good reason: at the level of an individual employer, as opposed to the economy as a whole, the existence of a gender pay gap is not necessarily sinister or indicative of poor practice, let alone of unequal pay.

So, much like President Jed Bartlet, I was shocked but not surprised when, the weekend before last, the Labour MP and tireless campaigner for gender equality, Jess Phillips – of whom I happen to be a big fan – used Twitter to call on women to boycott the retail chain Oliver Bonas, simply because of the company’s mean GPG of 9.6%, and median GPG of 1.4%, as listed on the Government’s gender pay gap reporting database and reported by the media.

 

 

 

 

 

 

 

 

 

 

 

Oliver Bonas’s mean GPG figure of 9.6% is in fact somewhat lower than both the national average (a mean GPG of 18.1% for all employees) and those of more than half of the 630 employers who have submitted the required gender pay report to date. As noted in the BBC report pictured by Jess in her tweet, for example, the Co-Operative Bank has reported a mean GPG of 30.3%, and a median GPG of 22.6%, but as far as I can tell Jess hasn’t called on women to switch to another bank.

Indeed, among the 630 employers, there are 132 with a mean GPG of more than 20%, and 38 with a mean GPG of more than 30% – including Virgin Money, the Office for Nuclear Regulation, and Price Waterhouse Cooper (PwC), one of the eight employers held up as examples of good practice on publishing gender pay information in the Government’s July 2015 consultation that led to the new regime.

And, if Jess thinks women should be “voting with their feet” in respect of a 9.6% mean GPG, then presumably women should also be avoiding the Home Office (10.1%), the Crown Prosecution Service (10.6%), Cambridgeshire Police (10.9%), the RNIB (11.8%), West Yorkshire Fire & Rescue Services (12.0%), John Lewis (13.9%), the National Gallery (14.4%), and the Health & Safety Executive (22.9%).

But in any case it is really not clear to me how boycotting a Living Wage employer with a workforce that is 83.6% female (and a part-time workforce that is 90.9% female) is supposed to benefit women, especially those who wish to work part-time in order to balance work with childcare and/or eldercare.

Nor is it entirely clear to me what Jess and others, including the former Coalition minister Jo Swinson, expect senior managers at Oliver Bonas to do that they aren’t already doing (or trying to do) – on Twitter, Jo said the company has “more to do, obviously” and that “obeying equal pay law is not sufficient”. That’s quite a statement. As the company notes in the gender pay gap report published on its website, it’s senior leadership team is 76% female, and

“As a lifestyle retailer, we predominantly attract female applicants resulting in our part time employee population being 90.9% female. [One] contributing factor to our [GPG] is that 72.3% of our Website Fulfilment and Warehouse teams are males who work full-time. We have worked hard over the last few years to encourage more male managers and team members to join our business.

Similarly, we have worked to increase the number of females working in our Warehouse and Web Fulfilment teams and continue to make good progress in these areas. We are planning on continuing to focus on creating a workforce across all areas of our business for 2018.”

In the circumstances, it seems harsh if not grossly unfair to pick on – and call for a consumer boycott of – a company that, given the nature of its business and customer base, seems to be working reasonably hard to avoid having an arguably near-inevitable gender pay gap. As Maya Forstater, visiting fellow at the Centre for Global Development, noted in response to Jess’s call for women to boycott the retailer Phase Eight, along with Oliver Bonas, Phase Eight is a “boutique-style women’s fashion retailer with high customer service – few staff in each store, bringing alternative sizes into changing room, giving opinion on outfits etc. – how many men want the job?” And there is absolutely nothing in the gender pay gap data to suggest that there is any unequal pay at Oliver Bonas (or, on the face of it, at Phase Eight, but I am resisting commenting on that company as I have not delved into their data or GPG report).

More to the point, perhaps, how – or why – does Jo Swinson, the driving force behind the new GPG reporting regime (and of whom I am a massive fan), conclude that Oliver Bonas has “more to do, obviously [sic]”? The clear implication of this statement is that any significant deviation from a mean GPG of 0% is somehow ‘wrong’, and that corrective action must be taken until that deviation is eliminated.

But does that also apply to the 90 organisations that have reported a negative mean GPG (i.e. in favour of their female employees)? Does the Equality & Human Rights Commission, which reports a mean GPG of minus 7.5%, have more to do? Or is that not so obvious? And what about the 50 organisations that report a mean GPG of between -1.0% and 1.0%? Do we give them all a gold star? Because among them I count at least four social care providers, and four cleaning companies. Oh, and the UK armed forces.

In short, transparency is all well and good, but not if it generates misinformed or groundless criticism of employers (and lets ‘bad’ employers off the hook). Because that can only lead to perverse incentives and a real risk of counter-productive outcomes in the years ahead. As Darren Newman noted in his tweeted response to Jess’s boycott call, “if a council contracts out its cleaners to Capita, its [gender] pay gap will fall”. And a private sector business unfairly threatened with a consumer boycott might well be tempted to do the same with a predominantly female/part-time/relatively low paid section of its workforce.

By the same token, ostensibly good gender pay gap figures don’t necessarily mean that all is fine and dandy in that organisation when it comes to gender diversity. A few days after Jess’s call for women to boycott Oliver Bonas and Phase Eight, prime minister Theresa May’s shambolic reshuffle of cabinet and other ministers was the subject of much critical analysis, with headlines such as “May’s reshuffle shows diversity and equality are not priorities” (Financial Times) and “Was Theresa May’s reshuffle really good for women?” (Stylist).

Yet, according to my number crunching – in line with the Government’s guidance to employers on how to calculate their GPG figures, and using the ministerial salaries published by the Government – following the recent reshuffle the Government as a whole (i.e. all 121 cabinet, middle-ranking and junior ministers, in both the Commons and the Lords) has a mean GPG of 5.0%, and a median GPG of 0%.

Furthermore, that 5.0% figure is slightly inflated by the fact that ministers in the Lords receive a lower total salary than their counterparts in the Commons, as their higher ministerial salaries do not fully compensate for them not receiving an MP’s salary of £76,011 (Lords ministers are not entitled to claim Lords Attendance Allowance). Among the 96 ministers who are an MP, there is a mean GPG of 4.9%, and a median GPG of 0%.

And, if we exclude the unpaid government post of Second Church Estates Commissioner (held by Dame Caroline Spelman MP), the mean GPG among Commons ministers falls to a fairly ‘impressive’ 4.0% (relative to, say, Oliver Bonas). Of the 630 organisations in the Government’s GPG reporting database, 447 have a mean GPG greater than 4.0% (and let’s not forget that many of those with a lower or even negative mean GPG only do so because they employ very few women).

Similarly, among the 22 full cabinet ministers (i.e. excluding the six middle-ranking ministers who attend the Cabinet), there is a mean GPG of 4.0%, and a median GPG of 0%. And, if we exclude Baroness Evans, the leader of the Lords (and the only Lords minister in the Cabinet), there is a mean GPG of minus 1.1% (that is, in favour of the women), and a median GPG of 0%.

But does this mean Theresa May has cracked gender diversity among the ranks of government ministers? No, it doesn’t. Of the 121 ministers, 82 (68%) are male, and just 39 are female. And, of the 96 ministers in the Commons, 66 (69%) are male, and 30 are female. Only six (27%) of the 22 full cabinet ministers are female.

To my mind, the new GPG reporting regime hasn’t got off to a terribly great start. And I fear things can only get worse.

* Sadly, there are in fact no female lovers. I made that bit up.

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About wonkypolicywonk

@wonkypolicywonk is a policy minion who has been lucky enough to work at Maternity Action, Working Families, Citizens Advice, the National Audit Office, the Law Society, and Amnesty International UK. He currently bangs his head on a desk in Parliament.
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