Public Servant Lifestyle

The membership and terms of reference of the new Women and Work Commission - which will make recommendations on tackling the gender pay gap – has been announced.

Trade and Industry Secretary Patricia Hewitt, announcing the membership and terms of reference of the new ‘Commission said: "With more women in work than ever before, and more people working flexibly, workplace culture is changing fast. But with women's pay almost 20% behind men's - and double that for part-time work - women are rightly demanding a better deal in the workplace. That's why Tony Blair and I have asked Margaret Prosser to lead a new Commission on Women and Work, to bring the best people and ideas together to tackle the gender pay gap."

The creation of the Women & Work Commission was announced by the Prime Minister in July 2004. The Commission will investigate the pay gap over the next 12 months, meeting monthly, before reporting to the Prime Minister.

The gender pay gap currently stands at 18% for full-time workers. Although the gap has closed gradually over the last 30 years since the Equal Pay Act (1975), the Government has decided to investigate the underlying factors which mean that average pay for women is lower than that for men.

Earnings Gap

Earnings figures just published by the Office for National Statistics show that the gap between average hourly earnings - excluding overtime for full-time male and full-time female employees - was 19.5% in 2003 rather than 18%, as previously estimated.

In addition, the new statistics show that the gender pay gap has not narrowed as quickly over the six-year period from 1998 to 2003 as earlier figures suggested. According to the new estimates, the gap narrowed over this period by 1.7% points, rather than by two percentage points.

Commenting on these new figures Sally Brett, Assistant Editor at Income Data Services Diversity at Work publication, said: "These new estimates, which provide a more accurate picture of the position of men and women in the labour market, show that the gap between men's and women's pay is wider than previously thought. They highlight the persistent inequalities both in pay levels and in access to higher paid managerial and professional jobs. They remind us that much still needs to be done to ensure women are paid fairly and treated equitably in the workplace."

The latest statistics are derived by applying new methodology to the annual New Earnings Survey (NES), which is the main source of earnings data in the UK, and it is believed they give a better reflection of the actual levels of earnings in the economy.

In particular, the sample used by the NES has now been weighted to make it more representative of the make-up of the actual workforce. This has an impact on the gender pay gap because survey returns from high earners in managerial and professional jobs, who are more likely to be male, are given larger weights because they tend to have lower response rates, and were therefore previously under-represented in the sample compared to people in other occupations.

Department of Trade & Industry (DTI) research has shown that the pay gap can be attributed to a number of factors including:

Different levels of experience in the labour market

Different skills and education

Occupational segregation - the fact that men and women are concentrated in different types of career

Progression and promotion at work

Women's experiences in the labour market before and after having children

Pay discrimination

The Government is already working to tackle the causes of the pay gap in various ways:

Encouraging large organisations to do equal pay audits and funding the Equal Opportunities Commission (EOC) to carry out this work. The Government has also led by example, requiring every department to carry out its own equal pay review. Recent EOC figures show that 45% of large organisations had completed an equal pay review, were in the process of completing one or were planning to do so in 2004.

Tackling low pay - Three quarters of a million women benefit each year from the National Minimum Wage, which has contributed to a 2% drop in the pay gap since 1997.

Making it easier for women to get equal pay - the Government is simplifying existing procedures for tribunals for women who have suffered discrimination. It has also introduced a questionnaire procedure so that women can find out if they are being paid fairly in line with male colleagues.

New flexible working rights - so that mothers who want to work after having children can. The right was introduced in April 2003, and since then almost 4 in 10 eligible mothers have requested some form of flexible working arrangement, with employers accepting 8 in 10 requests.

Providing childcare - since 1997 the National Childcare Strategy has created over 1 million new registered childcare places benefiting over 1.9 million children. The Government has met its target of new childcare places for 1.6 million children by 2004.

The Women and Work Commission's full terms of remit is:

Progress

Women now make up 45% of the workforce, up from 38% in 1971. The Equal Pay Act and the Sex Discrimination Act in the 1970s were important milestones in breaking down the barriers to women's participation in the labour market. But wages are low in many occupations dominated by women and there is still a gap in mean hourly earnings between men and women: it is 18% among full-time workers and 40% for those women working part-time.

There are a number of factors influencing the gender pay gap. The DTI's review of maternity, paternity and flexible working legislation takes account of how caring responsibilities impact upon men and women's labour market attachment and their earnings. The new ‘Commission will examine the other key factors shaping the difference in hourly earnings between men and women, including labour market experience, skills and education and discrimination. In investigating the impact of discrimination, the ‘Commission will look at the measures necessary to strengthen equal pay legislation, including the case for equal pay reviews to be mandatory.

Making progress on the gender pay gap is a key priority because in a full employment economy, we have to draw on the skills and talents of all potential workers, men and women, and remove obstacles to women's greater participation in the labour market. But it is also important because women have the right to expect a fair deal in the labour market.

The aim of the new ‘Commission will be to look at these wide-ranging influences on the gender pay gap:

How men and women's educational experience and skills acquisition foreshadows occupational segregation

General factors shaping women and men's labour market experience, including entry into employment, occupational segregation, full-time and part-time work experience, progression in the workplace and the tax and benefit system, as well as discrimination

Women's experience in the labour market before and after having children

As a substantial employer of women, the public sector warrants particular examination. The Commission will make recommendations to the Prime Minister within twelve months from Autumn 2004, taking account of the importance of promoting employability, the wider benefits to the economy and the impact on employers and public expenditure. The ‘Commission will take account of the DTI review of maternity, paternity and flexible working legislation in shaping its recommendations.

The members of the Women and Work Commission are:

Chair: Baroness Margaret Prosser of Battersea
Members: Sarah Anderson (Chief Executive, the Mayday Group),
Chris Banks (Chair of National Learning and Skills Council),
Kay Carberry (Assistant General Secretary, TUC),
Naaz Coker (Chair, Refugee Council & Chair, St George's Healthcare NHS Trust),
Debbie Coulter (Deputy General Secretary, GMB),
John Cridland (Deputy Director-General, Confederation of British Industry),
John Hannett (General Secretary, USDAW),
Sally Hopson (Retail and Managing Director (North Division), ASDA),
Adeeba Malik (Deputy Chief Executive of Quest for Economic Development),
Stella Manzie (Chief Executive, Coventry City Council),
Julie Mellor (Chair, Equal Opportunities Commission),
Christine Ray (HR Director, The Rank Group),
Ruth Silver (Principal, Lewisham College),
Liz Snape (Head of Policy Development, Unison).

More information available in Incentives & Rewards