Sinead Moore 21 Feb 2017 01:41pm

Gender pay gap won't close until 2041

The UK has significantly improved opportunities for women in the workplace since 2000, but it could still take another 24 years to close the gender pay gap, according to PwC’s Women in Work Index

The UK moved from 14th to 13th place in 2015, reaching its highest ever ranking in the index, which measures levels of female economic empowerment across 33 OECD countries based on five indicators.

Iceland, Sweden and Norway continue to top the rankings.

Despite a reduction in the gender pay gap, PwC warned that it will take another 24 years to close gap between male and female earnings in the UK, which currently stands at 17%, compared to the OECD average of 16%.

According to the research, job differences between men and women, across industries and job roles, is one of the biggest factors contributing to the gender pay gap in the UK.

PwC’s research highlighted that women are still more likely to work in lower paid sectors and occupations - such as health and social work and education roles - but make up a much smaller proportion of the workforce in high paying sectors - such as financial services, mining and quarrying and electricity and gas.

Financial services is the sector with the largest gender pay gap at 34%, whereas public administration and support services have the lowest at 15% and 13%, respectively.

The West Midlands has the largest gender pay gap at 21% with over half of women in the region being employed in lower-paying sectors such as wholesale and retail trade, and health services. Meanwhile Northern Ireland has the smallest pay gap, falling from 22% in 2000 to 6% now.

According to the research, achieving pay parity across the OECD could increase total female earnings by $2trn (£1.61trn).

In the UK, closing the gender pay gap could boost female earnings by around £85bn per year, which is an average of £6,100 per woman per year.

Yong Jing Teow, economist at PwC, said, “It’s positive news that women in the UK have benefitted from the improving economy and there are now more women in work than ever before, but we still have a way to go.

“It’s not just about getting more women working, but also about getting more of them into high quality jobs that offer career progression and flexibility.”

The research also revealed that increasing female employment to match Sweden’s level could result in a $6trn boost in GDP for the OECD or a £170bn boost to UK GDP.

The UK continues to fall behind on the number of women workers in full-time employment and ranks 30th out of 33 countries on this indicator, far below the OECD average.

Laura Hinton, executive board member and head of people at PwC, said, “While it’s encouraging that the UK is making progress on closing the gender pay gap, it is depressing that it will still take around a generation to close it completely.

"Pay reporting requirements should help speed up change as businesses will face greater accountability. But merely reporting numbers without any concrete action, won’t change anything.

“We know that women are ambitious - we now need to create workplaces that support their ambition, and enough skilled and senior roles that have the flexibility to accommodate work and caring responsibilities.”

The Women and Equalities Committee has also raised concerns that the government is not effectively tackling the structural causes of the gender pay gap after receiving a response to its report containing a list of recommendations to tackle the issue.

Recommendations included addressing the part-time pay penalty and flexible working; supporting parents to share childcare equally; supporting women back into the workforce after time out of the labour market; and addressing low pay in highly feminised sectors such as catering, cleaning and caring.

While the government recognised the need to reduce the gender pay gap and acknowledged the structural factors contributing to it, the committee argued that the government has rejected most of its evidence-based recommendations for addressing these issues.

The cross-party committee of MPs has warned that the government will fail to achieve its goal of eliminating the gender pay gap in a generation if it continues to ignore the evidence put before it.

Maria Miller, chair of the Women and Equalities Committee said, "The government says there is no place for a gender pay gap in modern Britain and has restated its pledge to end the pay gap within a generation. But without effectively tackling the key issues of flexible working, sharing unpaid caring responsibilities, and supporting women aged over 40 back into the workforce, the gender pay gap will not be eliminated."

Miller added that it was “deeply disappointing” that the committee’s “practical, evidence-based recommendations” have not been taken on board by government.

She said the committee will “continue to pursue urgent action to reduce the gender pay gap – starting by questioning the secretary of state for women and equalities on this inadequate response to our recommendations."

This will take place on 26 April.

The committee has also launched a web forum calling for stakeholders, including researchers, business-people and members of the public, to respond to the reasons given by the government for not implementing the committee's recommendations ahead of the hearing with Justine Greening.

The deadline for submissions is 12 April.