Labour has a plan to fine companies which persistently have a gender pay gap. A fine example of how we’ll never solve a problem unless we correctly diagnose the reason for the problem. On average, over the population, men and women tend to self-select into slightly different types of work. These different types have different values to employers – thus they pay different amounts. And that’s it. That is the cause of that gender pay, or more accurately gender earnings, gap.
This is also something not under the control of employers – fining them for it will therefore not work.
But, you know, the Labour Party:
Labour will fine employers who do not close their gender pay gaps, the party will pledge on International Women’s Day.
Under a Labour government, the party said all private and public employers who have 250 workers or more would not only have to audit their gender pay, but prove they are taking action to close the gap or face a fine from the government.
If it were that the pay gap resulted from discrimination by employers then this might be a solution. I would still oppose it simply because I’m like that but fining people who discriminate illegally does have a certain effectiveness to it. The problem with this solution is that it is already illegal to pay people different amounts for the same job based upon their gender. This also isn’t a problem in UK society – even the varied court cases wending their way through the system are based upon the idea of similar work, not the same.
The actual cause of the observed gap is:
This simple set of known facts, that average human reaction to the arrival of children differs based upon sex, does indeed explain all. Mothers earning perhaps 9 per cent less pay as the result of a child and fathers gaining some 8 per cent against non-fathers explains the “gender” pay gap. Sadly this seems to confuse, or addle, the best minds of our generation. UK companies now report their internal pay gaps. The truth of which is that, in one example, pilots get what pilots get, stewards stewards. There are more male pilots, more female stewards and that’s all.
It is not that men and women get paid different amounts for doing the same job. It is that parents appear to change their working habits, possibly even desires, upon the arrival of offspring.
Fining companies because mothers, more so than fathers and of course on average over the population, put their children before their careers isn’t something that is going to work.
The reason we’ve got this policy even being mooted, let alone announced, is because that underlying cause of the gap is being misidentified. It is about the personal choices of those going out to work, not decisions being made by employers.
The solution therefore just won’t work – not a recommendation for a policy change.