Photo: Getty Images
Photo: Getty Images

MONEY

The gender pay gap will screw you, even after you retire

Women take on the lion’s share of childcare costs meaning they end up with smaller pensions than men. It’s just another way women are being discriminated against in this maddeningly complex and sexist fight, says Rachel Shabi

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By Rachel Shabi on

If you thought that the gender pay gap was going to disadvantage you financially throughout your working life, here is some even more wearying news: it’s going to screw you into retirement as well. That’s the latest from the Fawcett society, which today put out a report showing that women are risking pension poverty by cutting pensions contributions to cover the cost of childcare.

It turns out that if women aren’t taking a career break to care for children, many are paying the lion’s share of childcare costs, in each case diverting funds from pension contributions. Scottish Widows has said that the Fawcett report’s findings echo their own, which show pensions contributions ticking along equally between employed men and women through their twenties, and then taking sharply different paths during the next decade. Not to make this scenario any more depressing, but it’s obviously worth remembering that all this is just exacerbating an already bad pensions situation: if you’re getting paid less than your male counterparts, you are paying in less in social security contributions, too.  I say “if” you’re getting paid less, but you almost certainly are: women are paid on average 20 per cent less than men in the same, full-time salaried roles, and the UK is number 13 on the global worst offender leagues (just after the US and before Germany).

What this gloomy news about retirement shows  – apart from highlighting the perpetually and unfairly skewed economics  – is just how interconnected are the factors causing pay inequality. Childcare has always been a big part of the picture – it is no coincidence that countries that do this more equally have a narrower gender pay gap. So Nordic countries, so often top of the league across all the measures of gender equality, get great grades over the pay gap precisely because men and women are able to parent more equally: that’s brought about by a winning combination of mandatory paternal leave, post-maternity re-entry programmes, affordable childcare and healthy parental leave benefits, making a work-life balance for parents a possibility, rather than a throwaway slogan used by government and HR departments.

Childcare has always been a big part of the picture – it is no coincidence that countries that do this more equally have a narrower gender pay gap

You could gripe that those high-achieving countries are wealthy enough to afford such generous schemes, but that’s a bit churlish coming from the world’s fifth biggest economy, and also a big chicken and egg: Nordic countries have strong GDPs and growth rates because they have higher female participation in the workplace. Meanwhile, it’s no use implementing just one helpful thing and ignoring the other components: the UK government introduced shared parental leave last year, but it turns out – surprise! – that few families can afford to take it.

Of course, childcare is only a part of the picture. There’s much more going on with the pay gap: unconscious bias (or just plain discrimination), lack of female representation at the higher salaried end of the payroll, lack of financial recognition for roles disproportionately taken up by women, lack of confidence which prevents women from asking for more money (and, anecdotally, not such a great reception, and especially from male bosses, when they do), long and inflexible working hours, organisational culture, a long list of issues that join up and conspire to result in women being paid less.

One of the most encouraging shifts in the UK is that the government, after much campaigning, introduced a law to compel companies with a workforce of over 250 to publish pay records by 2018 – because that kind of transparency is key to fighting the gap: how can you contest a pay discrepancy you don’t even know about? Companies will have to publish the numbers of men and women at each pay grade and will also have to reveal bonuses – so that the gap can’t be hidden there. Still, with no penalties planned for having gender pay gaps, it’s hard to see how anything will change on that side of the equation – indeed, some have noted that this might just end up being a box-ticking exercise.

It’s this glacial pace, plus the lack of willing to change things at the fundamental levels required (for example, offering flexible work patterns for every role advertised, not just when requested) that fuels the crushing forecasts about us managing to close the pay gap – in 118 years. And if that still isn’t enough to push for change, remember that the gender pay gap never quits: it won’t even stop working when you do.

@rachshabi

Photo: Getty Images
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women at work
Gender pay gap

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