Page | 1 Older women, the labour market, and the gender pay gap Submission to the Women and Equalities Committee Enquiry into the Gender Pay gap and Older Women From Sheila Wild Sheila Wild http://www.equalpayportal.co.uk/ Older women, the labour market, and the gender pay gap Executive Summary Introduction Page | 2 Mapping the legislative advances towards equality over the past fifty years against age cohorts [see Annex A] shows that: Legislative moves to equalise opportunities for women have been late in arriving, and slow to mature. Rather than seeking from the outset to rebalance opportunities between men and women, Britain has tended to rely upon an expansion of the parttime labour market, an expansion which has had the effect of restricting the choices available to working women, thereby reinforcing gender inequality. Throughout most of the past fifty years, women and men have entered the labour market on different terms. This has not been a free choice (for either women or men), but a response to how the labour market has been structured. A woman has to be over 40 to have benefitted from even the most basic advances towards equality. Only women in their 20s will have benefitted from all the advances in equalities legislation and employment protection. These women have the potential to occupy the labour market on equal terms to men, but only if a more equal sharing of family responsibilities becomes a reality and not an aspiration. The implications: The explanation that the gender pay gap experienced by women over 40 is due to “the choices women make” once they have children is overly simplistic. Given both the length of time it has taken Britain to introduce a comprehensive system of support for workers with family responsibilities, and the British economy’s heavy reliance on low-paid, low skilled part-time work, women have had little option but to be the primary carers. In addition to varying between age cohorts, women’s experiences will also vary in respect of factors such as the level of intra-familial support for their careers and the infrastructure of the local economy. There is nothing in the measurement of the gender pay gap that will encourage employers to narrow the gender pay gap for older women. This could happen only if the metric being introduced were sophisticated enough to capture the intersection Sheila Wild http://www.equalpayportal.co.uk/ of age with gender and with hours and patterns of work (and, indeed, ethnicity – different age groups manifest different working and earning patterns according to their ethnic group), and employers were required to analyse the data and act upon the findings. Page | 3 The challenges: To redress the structural inequities experienced by women in the 45+ cohorts To ensure that women in the younger age cohorts do not suffer from similar structural inequities, i.e. that the ‘equal sharing’ model becomes a reality The potential solutions: Introduce a national strategy to upskill, and thereby improve the pay, of older workers, and in particular, those working part-time. This would entail working with employers in those industries where older women are clustered, such as the public sector and the caring and leisure industries. The strategy should include support for older women and men to stay in work while providing care for others. Introduce a consolidating Act of Parliament that brings all of the labour market provisions relating to workers with family responsibilities into one place. The aims of this legislation should be to: o Foster an equal sharing of family responsibilities between men and women of all ages o Make it easy for employers to accommodate agile working trajectories which match the needs of the workers and of the business Ensure that pay and reward systems are equitable as between women and men of all ages, and are transparent. This would entail: o Making it the norm for equal pay audits that include an analysis of rates of pay by age as well as by gender to be carried out on a regular basis, say, every three years, and to ensure that any actions arising out of these are embedded in the organisations’ overall pay and reward strategy. o Sharing information about the gender pay gap in all its dimensions, with employees. o Consulting with employees and putting in place an action plan to tackle the gender pay gap at workplace level. Sheila Wild http://www.equalpayportal.co.uk/ Older women, the labour market, and the gender pay gap Introduction 1. Annex A to this submission (Legislative standards impacting on the treatment of women and men in the labour market) charts the legislative framework governing Page | 4 women’s labour market participation; it shows that throughout most of the past fifty years women have entered the labour market on different terms to men. This has been most evident in the channelling of women into part-time work, an option which continues to be presented not as a labour market construct, but as ‘a choice women make’. 2. This differential treatment will have led to different outcomes for older women, not only as compared to men, but also as compared to younger women. If we want to redress the enduring nature of the disadvantages experienced by older women, then we need to target them directly. The legislative advances 3. The legislative advances have been not only in employment, but, most importantly, in education. Without girls having access to the same educational opportunities as boys, there can be no equality in employment and pay. However, the present cohort of 55 year old women will have been 15 by the time the Sex Discrimination Act 1975 made discrimination in education unlawful, and will not therefore have had the same educational opportunities as men of the same age, or as younger women. 4. Also relevant is the age at which a woman has her first child. A woman born in 1975 who did not have a child until she was 40 will have had access to a year’s maternity leave, to childcare, to employment protection when working part-time, and a right to request flexible working. In addition, her partner will have been able to take a short period of paternity leave. In contrast, a woman born in the same year, but who had her first child at the age of 20 will have had access to none of these provisions. Did the woman who, back in 1995, became a mother at age 20 really choose to work part-time, or was this the only option available to her at the time? 5. The decades after the implementation of the anti-discrimination legislation saw a massive expansion in the part-time labour force, and by the mid-1980s part-time employment accounted for 22 per cent of total employment and 45 per cent of women’s employment. And where women were employed in part-time work, they tended to remain in it, in contrast to men, for whom part-time work was a transient phase either at the beginning or end of their working lives. One commentator has remarked that the development of a large part-time sector was “part of a deregulation strategy with costs advantages to employers, lack of employment Sheila Wild http://www.equalpayportal.co.uk/ protection, uneven patterns of demand and tasks that require limited qualifications and limited hours to complete. Thus, part-time employment in Britain has acted as the main channel for women’s integration into the labour market, but it has also contributed to producing or reinforcing gender inequalities.” [Solera, 2009] 6. Part-time work was inherently disadvantageous, for it was not until the mid-1990s Page | 5 that part-time workers became eligible for the same employment protection rights as full-timers, and then only after legal action taken by the Equal Opportunities Commission. That such employment protection included the right to return to work after a period of maternity leave severely constrained the choices open to those women who are now in their 50s and 60s. 7. Also slow to come on stream were measures enabling parents to share the day-today responsibility for their children, a transformation in the balance of parental responsibilities that is essential if women are enter the labour market on equal terms to men. Included in this is the fact that the UK did not introduce a national childcare strategy until 1998, meaning that only women who became mothers after that date will have had access to the good quality affordable childcare necessary to enable them to remain in the labour market and maintain their human capital. 8. It is also important to recognise that during the period in question, there have been regressions as well as advances, with measures aimed at enabling women’s labour market participation occasionally becoming a political football. In the 1970s and early 1980s, for example, successive administrations increased or decreased the period of time a woman had to work before she became eligible for maternity leave. This was not only disadvantageous in itself, but it gave a clear message that a woman’s labour market participation was subject to the permission of others. A similar message was given when in the mid-1980s employer provided childcare was deemed to be a taxable benefit. This added an estimated £1000 a year to a working woman’s tax bill, and made the opportunity cost of remaining in employment higher for mothers than for fathers. The societal and demographic changes 9. The labour market behaviour of women in the 40+ age cohorts will also have been influenced by the demographic make-up of their immediate family and the level of intra-familial support for their careers. 10. In 1975, when the Sex Discrimination and Equal Pay Acts were introduced, and the current cohorts of 55 and 60 year olds were in secondary, or tertiary, education, society expected men to be the breadwinners and women to look after the family. Both the benefits system and the workplace were structured around such expectations, and the stereotypes proved hard to shift. As late as the 1980s, for Sheila Wild http://www.equalpayportal.co.uk/ example, a major high street bank settled an equal pay claim only when presented with the minutes of a meeting showing that, in recognition of their breadwinner role, the company had previously given a pay rise to the men with whom the women were claiming equal pay. 11. The majority of women in the 45+ cohorts will have been subject to these Page | 6 stereotypes, and many will have had to battle for a place in the labour market, not only at work, but in the home. Some girls will still be subject to such intra-familial stereotyping, and it is still the case that when their first child is born, men and women tend to grow more traditional in their gender attitudes towards parenthood. The reason for this may lie in the way in which, in organising work, we perpetuate structural barriers to involved fatherhood. Whether you are male or female, you have to be very confident and persistent to achieve an equal sharing of parental responsibilities, and it is likely that older women, having grown up in a world where the stereotyping was the reality, may have been less able to achieve this. 12. A key demographic change since the 1970s is the ageing of the UK’s population. This, coupled with an available pool of women already working part-time has resulted in many older working women carrying a ‘double burden’ of working while caring for parents and/or grandchildren, a balancing act which can substantially limit the type and hours of work they can undertake. 58 per cent of carers are female and 42 per cent male. It’s also important to recognise that caring affects men and women at different times in their lives. Women are much more likely to care in middle age, with 1 in 4 women aged 50-64 having caring responsibilities, compared to 1 in 6 men. 13. Finally, but most importantly, for some women, particularly those living in rural areas, the infrastructure of the local economy can be a key determinant of labour market behaviour: not the birth of a child, or the need to care for an older relative per se, that results in a reduction in hours worked, but the limitations imposed by inadequate public transport, and/or an absence of childcare or eldercare. The implications 14. The legislative framework has been slow to mature. The implication of this is that only women now in their twenties will have benefitted from the full range of opportunities and protections provided by equality and employment protection legislation. To say, as too many commentators do, that the gender pay gap for women over 40 is due to the fact of motherhood, is to do these cohorts of women a gross disservice. They had no option but to enter the labour market on terms very different to those enjoyed by their male contemporaries, and they are still feeling the effects of this. Sheila Wild http://www.equalpayportal.co.uk/ 15. It also misunderstands what the measure known as the gender pay gap actually represents. The gap is not a measure of whether women’s earnings equal those of men; it is a measure of labour market disadvantage, and it is therefore not surprising that the gap is wider for older women who have experienced a much longer period of disadvantage than have younger women. Page | 7 16. It follows from this that there is nothing in the current proposals on measuring the gender pay gap that will result in employers being able to narrow the gender pay gap for older women. This could happen only if the metric being introduced were sophisticated enough to capture the intersection of age with gender and with hours and patterns of work (and, indeed, ethnicity, for different age groups manifest different working and earning patterns according to their ethnic group), and employers were required both to analyse the data, and to take remedial action. 17. Even this might not be enough, for there is evidence to show that the earnings and working patterns of older people vary by gender, but we do not know how these variations are going to play out in the future. Older women workers, especially those over 55, behave in a particular way because their options have been limited, but it is reasonable to expect that as younger women age, they will behave differently because they have had more options available to them. The challenges 18. The challenges are thus: To redress the structural inequities experienced by women in the 45+ cohorts To ensure that women in the younger age cohorts do not suffer from similar structural inequities i.e. that the ‘equal sharing’ model becomes a reality 19. What is needed is to recognise the different labour market experiences of different cohorts of women and to target remedial action at the most disadvantaged groups: those over 55; those working part-time; those caring for elderly relatives; those living in rural communities and those still coming up against outmoded stereotypes about a woman’s role. The potential solutions: Introduce a national strategy to upskill, and thereby improve the pay, of older workers, and in particular, those working part-time. This would entail working with employers in those industries where older women are clustered, such as the public sector and the caring and leisure industries, to encourage them to provide full access to training opportunities to older women, and where appropriate, changes to job Sheila Wild http://www.equalpayportal.co.uk/ design and working hours to accommodate caring responsibilities. The strategy should include support for older women and men to stay in work while providing care for others, and awareness raising amongst employers of the barriers facing older women, and of the need to tackle these in the light of the raising of the state pension age – older women are in future going to be far less likely to exit the labour Page | 8 market in their late fifties and early sixties, and more likely to want to seek opportunities for quality employment. Introduce a consolidating Act of Parliament that brings all of the labour market provisions relating to workers with family responsibilities into one place. The aims of this legislation should be to: o Foster an equal sharing of family responsibilities between men and women of all ages o Make it easy for employers to accommodate agile working trajectories which match the needs of the workers and of the business Ensure that pay and reward systems are equitable as between women and men of all ages, and are transparent. This would entail: o Making it the norm for equal pay audits that include an analysis of rates of pay by age as well as by gender to be carried out on a regular basis, say, every three years, and to ensure that any actions arising out of these are embedded in the organisations’ overall pay and reward strategy. o Sharing information about the gender pay gap in all its dimensions, with employees. o Consulting with employees and putting in place an action plan to tackle the gender pay gap at workplace level. Sheila Wild, November 2015 Sheila Wild http://www.equalpayportal.co.uk/ ANNEX A Legislative standards impacting on the treatment of women and men in the labour market Year Age cohort 1950 65+ Relevant legislation Context 1958 Life Peerages Act enables women to sit in the House of Lords No equality of opportunity in education 1957 Article 119 of the Treaty establishing the European Economic Community provides for equality of remuneration without discrimination on grounds of sex 1959 Labour Party Manifesto commits to the right to equal pay for equal work. 1955 60+ 1960 55+ 1965 50+ 1970 45+ 1975 40+ 1967 UK applies to join the EEC, which will mean making legal provision for equal pay 1970 Equal Pay Act provides for equal pay and gives employers 5 years to equalise pay. 1975 (February) EC Council Directive 75/ 1 17/EEC provides for equal pay for work of equal value 1975 (December) Equal Pay Act 1970 comes into force, but does not provide for equal pay for work of equal value, and therefore cannot address unequal pay due to occupational segregation. Sheila Wild Advances Page | 9 Discrimination against women applying for jobs lawful e.g. banks advertising for girls with O levels and boys with A levels, with differing career trajectories Full-time employment the norm, e.g. availability for full-time work a requirement in order to be classed as unemployed Different retirement ages for men and women No maternity leave Little or no childcare provision Strong ‘male breadwinner’ welfare and tax regimes Strong gender stereotypes, especially with regard to women as the primary carers Pregnancy discrimination remains lawful Women become entitled to equal pay for like work and work rated as equivalent. Gender pay gap narrows at its fastest rate until the introduction of the national minimum wage in 1998. http://www.equalpayportal.co.uk/ Year Age cohort Relevant legislation Context Advances 1975 Sex Discrimination Act outlaws discrimination on grounds of sex, but excludes pregnancy, retirement age and the armed services. Women become entitled to equal treatment in education and in Page | 10 some, but not all, areas of employment. First steps towards a system of job protection for women as mothers. 1978 Employment Protection (Consolidation) Act 1978 introduces right to up to 29 weeks maternity leave for women with two years full-time or five years part-time employment. 1979 1980 35+ European Commission commences infringement proceedings against the UK Government for failing to provide for equal pay for work of equal value 1981 Jenkins v Kingsgate ECJ Part-time employment rules that a part-timer can claim accounts for 22 per cent equal pay with a full-timer of total employment and 45 per cent of women’s employment. 1982 European Court of Justice rules against the UK in respect of its failure to provide for equal pay for work of equal value 1984 Equal Pay Act amended to provide for equal pay for work of equal value 1985 30+ Sheila Wild 1986 Sex Discrimination Act equalised retirement ages for men and women A part-timer can claim equal pay with a full-timer. Women become entitled to equal pay for work of equal value – equal value is aimed at providing equal pay in situations where there is occupational segregation. Unequal retirement ages become unlawful. http://www.equalpayportal.co.uk/ Year Age cohort 1990 25+ 1995 20+ Relevant legislation Context Advances 1990 Dekker v Stichting Vormingscentrum Voor Jone Volwassen (VJV-Centrum) Plus ECJ rules that discrimination against a pregnant woman amounts to sex discrimination Pregnancy discrimination becomes unlawful. 1994 Regina v Secretary of State for Employment, ex parte Equal Opportunities Commission and another, found that less favourable treatment of parttime workers with regard to qualification for employment protection was unlawful. 1996 Employment Rights Act Full employment protection for parttimers has to be introduced. Page | 11 Employment protection for parttime workers. 1997 EC Directive 97/81/EC on part-time work 2000 Sheila Wild 1998 National Childcare Strategy launched Access to affordable childcare. 1998 National Minimum Wage Act National Minimum Wage helps to narrow the gender pay gap. 1999 Employment Relations Act provided up to 18 weeks paid maternity leave and introduced a period of parental leave Introduction of the possibility of men sharing responsibility for children. Discrimination against part-time workers outlawed. 2000 The Part-time Workers (Prevention of Less Favourable Treatment) Regulations outlaws less favourable treatment of part-timers 2002 Employment Act introduced a right for parents of children under 6 to request flexible working Right to request flexible working introduced. http://www.equalpayportal.co.uk/ Year Age cohort 2005 2010 2014 Relevant legislation Context 2003 Paternity and Adoption Leave Regulations gives men a right to one or two weeks paternity leave 2007 Right to request flexible working extended to carers of adults 2010 The Additional Paternity Leave Regulations entitle fathers to take up to 26 weeks of paternity leave 2014 Shared Parental Leave Regulations entitle parents to share parental leave between them Advances Paternity leave introduced. Recognition of caring. Recognition of role of the father. Recognition that parenting is a shared responsibility. References: Beck, V. (2013) 'Employers' use of older workers in the recession', Employee Relations, 35, 3: 257-71. Carers UK (2015) Briefing, Facts about Carers 2015 Maitland, A (2010) Working Better: the over 50s, the new work generation, Manchester: Equality and Human Rights Commission. Metcalf, H. and Meadows, P. (2006) Survey of employers' policies, practices and preferences relating to age. Department for Work and Pensions Research Report no. 325. Leeds: Corporate Document Services. Smeaton, D. and Vegeris, S. (2009) Older people inside and outside the labour market: a review. EHRC Research Report no. 22. Manchester: Equality and Human Rights Commission. Smeaton, D., Vegeris, S. and Sahin-Dikmen, M. (2010) Older workers: employment preferences, barriers and solutions. EHRC Research Report no. 43. Manchester: Equality and Human Rights Commission. Solera, C (2009) Women in and out of paid work: changes across generations in Italy and Britain, ISER, Essex TUC (2013) Older Women and the Labour Market Sheila Wild http://www.equalpayportal.co.uk/ Page | 12