Cameron must work hard to engineer pay equality

The PM says he needs to honour his promise to raise women’s salaries by giving the people he chooses to tackle the problem adequate resources

Article taken from The Guardian Business Network newsletter and originally posted by The Gaurdian on  19/07/2015 and reposted by iQ Business Solutions – Small Business Payroll, Auto-Enrolment & Bookkeeping Solutions – ‘Working Smarter for You!

It is more than 40 years since the Equal Pay Act and still employers are only inching forward. In 2010 the coalition government put in place legislation allowing ministers to demand that employers conduct pay audits, and then promptly left it on the shelf.

Now David Cameron has dusted off the section of the coalition’s Equality Act related to pay audits and said he wants to go ahead. Yet, fearful of the potential impact on businesses, he has asked for a period of consultation over how audits should be handled – bringing more delay.

The attitudes of the men at the top of certain industries often hold women back. Illustration: David Simonds for the Observer * Cartoon by David-Simonds

The attitudes of the men at the top of certain industries often hold women back. Illustration: David Simonds for the Observer * Cartoon by David-Simonds

However, if the delay persuades him that a simple aggregate figure of total pay for men and women in an organisation is too simplistic, the wait will be worthwhile. That’s because unequal pay is a thorny subject and demands that some decent resources be thrown at identifying winners and losers.

A recent report by recruiters Michael Page found that, among a highly paid group of financial managers, male earnings were almost £45,000 a year more than women. Similarly, the annual salary of female health professionals is less than half the salary of their male colleagues.

This and many other studies have shown that women receive lower pay. The question is why?

According to the Office for National Statistics, women earn 0.2% more than men in their 30s, only to fall behind in their 40s when they earn 14% less in hourly wages.

It is not hard to see how this happens. Anyone who takes time out to look after children is going to see their income fall behind those who don’t. And mostly those who take on the burden of childcare are women.

But this fact puts Cameron in direct conflict with the big employers’ organisations like the Confederation of British Industry, which warns that publishing the gap in pay could be “misleading”. It says it prefers a voluntary approach, and wants the government to focus on the way “stereotypes” deter women from pursuing higher-earning careers – rather than take a hard look at the lack of childcare support and anything else that might add to their costs.

Of course there is stereotyping in the workplace, but family-friendly policies must be part of the equation. And stereotyping is not just about who gets promoted and who doesn’t, which is the focus of the Michael Page study: it stretches to the attitudes of entire industries – and, importantly for the gender pay gap, industries that pay better than average.

Look at the gender balance in the 2.3-million-strong engineering profession, which can only lay claim to a 6.7% rate of female participation. (In mechanical engineering the problem is even deeper: of its chartered members, only 1% are women.) The professions are rife with outmoded attitudes that persuade women they are not wanted, from male locker-room humour to a time-serving attitude to work. Outmoded management practices born in the era of empire that rely on people barking orders are also a big turn-off (although admittedly not just for women).

Cameron made a big splash with his commitment to raise the pay of women to equality with men. He said it was an issue whose time had come. He needs to honour that commitment. (Perhaps putting behind him the days when he was tempted to answer a woman who dared question him with “calm down, dear” would be one way to start.) But it is not difficult to see ways in which he could demonstrate his goodwill.

Finding a way to audit who in any organisation does a similar job, with virtually the same responsibilities, should not be beyond the wit of the many consultancies that work in employment. Cameron should insist they be given the time and money to provide their assessments. Britain needs a pay rise, Cameron has said. It shouldn’t just be the men who get one.

Zero-hours contracts still add up to a lot of injustice

Sports Direct’s sprawling mega-warehouse in Shirebrook, north-east Derbyshire, sits on the site of the town’s old colliery, closed by Michael Heseltine in 1993. It is Labour heartland, a constituency comfortably held by Dennis Skinner MP since 1970.

Regularly helicoptered into the site, however, is the man who keeps this business at the vanguard of 21st century Britain’s flexible labour , heralded by the Conservative party for keeping unemployment down during recent yearsmarket. Mike Ashley, whose personal fortune is estimated at £3.5bn, has made Shirebrook the engine of his chain of 660 sportswear stores.

Last week, the company said it was sharing its success with the workforce: shares worth £155m are to be handed out to about 2,000 of Sports Direct’s top managers and staff. At Shirebrook that could be about 300 lucky workers. That is because the rest of the 3,000-strong workforce are thought to be agency staff on zero-hours contracts. Many are on the minimum wage, having travelled from Poland for work. They won’t get the bonus. For these staff, incentives are about hoping for sufficient hours of employment to pay the bills.

In the runup to the election, Conservative politicians were happy to peddle the implausible line that the flexibility afforded by zero-hours contracts is welcomed by many staff, such as students and working parents. By contrast, Ed Miliband took a stand. He declared: “These Victorian practices have no place in the 21st century.”

This appeared to cut no ice with the electorate, who judged him harshly. Analysts at RBC Capital Markets in London now think the debate is over. “Concern over the use of zero-hours contracts has subsided,” they told investors in Sports Direct last week.

Whether or not a future Labour leader makes this a campaigning matter, the inequities of excessive and aggressive low-wage employment are now so acute they cannot be ignored. There is only so much you can squeeze from insecure wage-hungry staff before something dramatic happens. This is a scandal that is not going away.

Tory touchiness shows

Paul Johnson, the director of the Institute for Fiscal Studies, provided one of the few clear, neutral voices in the runup to May’s general election. But at the newly convened treasury select committee last week it became clear that the IFS has begun to get under the Tories’ skin.

Chairman Andrew Tyrie and his Conservative colleagues criticised the IFS for failing to include George Osborne’s minimum-wage rise in its usual post-budget distributional chart, which showed that the impact of the Treasury’s £12bn in welfare cuts will fall most heavily at the lower end of the income scale.

Johnson explained that the IFS didn’t have the capacity to model it at such short notice; Tyrie demanded an answer by Monday, because 80% of the IFS’s funding comes from the government, and it exists “to support committees like this”.

The IFS does receive support from taxpayers through the Economic and Social Research Council, but so do academics up and down the country, who would be horrified at the idea that it made them beholden to politicians’ demands. Johnson is a national treasure – it ill behoves Tyrie to try to push him around.

Article taken from The Guardian Business Network newsletter and originally posted by The Gaurdian on  19/07/2015 and reposted by iQ Business Solutions – Small Business Payroll, Auto-Enrolment & Bookkeeping Solutions – ‘Working Smarter for You!

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This entry was posted by Ian Quill on Wednesday, July 22nd, 2015 at 10:59 am and is filed under General.

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