How Wide is the UK's Gender Pay Gap?

It pays to be a man. No really, it does. Almost 40 years after the Equal Pay Act (1970) came into force, the gender pay gap may have fallen to its lowest level since records began, but it still leaves the UK in a poor position compared to rest of our European neighbours.

The pay gap in the UK is one third higher than the EU average, more than double that of Ireland, and one of the worst in Europe -- second only to Germany. So why, in an age of equality and political correctness, does a pay gap between the sexes still exist and, does the disparity affect all industry sectors?

In 1970, the gender pay gap stood at 35% with men earning significantly more than women both in full and part-time employment. Since then, significant strides have been made to narrow this gap and in 2008, the Trade Union Congress (TUC) produced a report suggesting that the full-time gender pay gap is currently 17.2%, while the part-time gap is 35.6%.

However, the Government's official figures produced by Annual Survey of Hours and Earnings (ASHE) for the National Office of Statistics reveal a more favourable position. They show that the median* hourly pay gap between women and men across all industry sectors and positions is continuing to show signs of narrowing and stands at 12.6% -- a 5% improvement on 1997.

Indeed, between 2006 and 2007, the median hourly rate of pay for women increased by a higher percentage rate than men, from 3.1% to £10.46 and 2.8% to £11.96. Yet weekly earnings for women in full-time employment remained unchanged from the year before with women taking home £394 -- or 21% less -- compared to their male counterparts who earned £498.

Although the gender pay gap on the whole has been reduced -- if only marginally -- over the last ten years, the same cannot be said within the management sector. More than one in three managers in the UK are women yet their overall annual earnings are £6,076 fewer than their male counterparts. And for the first time in 11 years, the gender pay gap among managers from trainees to chief executives has widened, according to the Chartered Management Institute (CIM).

In 2003, the gap stood at 13.6% and by 2005 this had fallen to 11.8%. But last year it widened to 12.2% across all management grades and, in a survey of more than 42,000 managers across all industry sectors, the CIM found that the average female manager earned £43,571 in 2006-7, while male managers typically earned £49,647.

But the biggest gap exists at senior management and director level, which saw a sharp rise from 20 per to 23% prompting the Equal Opportunities Commission to declare: "It is alarming to hear that for this section of the workforce the gender pay gap is actually getting worse."

And the gap is also largely dependent upon the industry you are employed. Male managers working in the food and drink sector, for example, will earn an average 46% more than their female counterparts, closely followed by the pensions and insurance sector where the gap stands at 43.2%.

The sector with the third largest gap is human resources. Charged with the responsibility of ensuring equality and diversity practices within their respective organisations, the human resources sector has a 40% pay gap between male and female managers.

Conversely, the most equal sectors are IT, the public and charity sectors where the gap is 11.7% and 0.7% respectively.

Dr Katherine Rake, director of the Fawcett Society which campaigns for women's equality, states: "At the current rate of change, it will take 140 years to close the pay gap." Dr Rake argues that companies are responsible for the existing pay gap and should be forced to undergo 'equality health checks.'

However, John Cridland, deputy director of the Confederation of British Industry (CBI) disagrees. He asserts that the results of a Government's commission's study in 2006 indicated that the gender pay gap is a consequence of 'stereotypes' and advice given in early life. He said:

"It is because of structural problems, it's because of young girls' choices in schools and the fact that our careers education system completely fails them to realise that the choices they make will determine what they earn."

Only two of the 100 FTSE companies currently have a female chief executive at its helm and, according to a recent Guardian survey, their pay substantially lags behind the male average.

Harriet Harman, Minister for Women, argues that the gender pay gap has lessened since Labour came into power in 1997, adding that "I just don't believe women are less committed, less hard-working or less able than men. So they shouldn't be paid less." Ms Harman stressed that the Government would introduce "tough new measures" to tackle unequal pay through the forthcoming equalities bill due to be passed within the next few months.

But, according to a spokesperson from the Fawcett Society, "UK women cannot afford to wait any longer. We need action from the Government now."

Clearly, the Government's proposed "tough" new policy won't go far enough to pacify some campaigners. And although progress has arguably been particularly slow to reduce the gap between the sexes, the fact still remains that progress -- even if sluggish -- has been made and the pay gap between men and women has closed by more than 50% since 1970.

*The Office of National Statistics' Annual Survey of Hours and Earnings recommend the use of the median as opposed to the mean when calculating the gender pay gap because the median avoids distortions that can be created by extreme values when using the mean. The median ensures that data is more representative of the population as a whole.