Gender pay gap won't close until 2069, says Deloitte

It will be more than half a century before the gender pay gap closes in the UK, according to a report that highlights the gulf between men and women’s earnings, even at the outset of their careers.

Progress on closing the pay gap has been so slow that on current trends it will not be eradicated until 2069 – or 99 years after the 1970 Equal Pay Act – according to an analysis by consultants Deloitte.

Laying bare the challenge for government as it seeks to tackle inequality, the report finds that at the very start of their working lives, women graduates are earning less than their male peers in many jobs. That gap holds true even in sectors where women workers dominate, such as healthcare and teaching.

In all but one of 10 popular occupations for graduates, men start out on higher average salaries than women. In all 10, the gap widens over time.

The gender pay gap has come down to its lowest on record, at 9.4% for full-time workers, and the government has pledged to eliminate it in a generation. But progress remains very slow, according to Deloitte. It found the difference in hourly pay between full-time men and women was closing at a rate of just 2.5p a year.

The Fawcett Society campaign group said the findings highlighted missed opportunities for women and for businesses, who were not making the most of women’s skills and experience.

“At the current rate of progress young women starting work today will have retired by the time we close the gender pay gap – none of us can afford to wait that long,” said Jemima Olchawski, the Fawcett Society’s head of policy and insight.

One of the widest gaps in starting salaries is for health professionals, at £4,000, or 14%, according to Deloitte’s analysis of official figures and data from the Higher Education Statistics Agency.

That is despite more than three-quarters of graduates in the sector being female. In teaching, where a similar proportion are women, the gap in starting salaries is £1,000 or 4%.

Starting salaries are only equal, at £17,000, in administrative occupations. But in that sector a gap emerges over time and in the other nine sectors it gets wider, according the Deloitte’s analysis.

The report says the reasons for the UK’s 9.4% gender pay gap for full-time workers are complex. Factors include women being more likely to take jobs where pay is relatively low, such as in care; women taking time out for family reasons; and women taking more poorly paid part-time jobs when they return. “There may also be unconscious discrimination at work and within organisations that affect decisions about jobs and pay,” the report added.

However, the report identified lessons for policymakers in the significantly smaller gap in starting salaries between men and women who have studied science, technology, engineering and mathematics (Stem) subjects, and who go on to take jobs in those sectors.

Analysing pay gaps by degree qualifications – rather than by occupation – the authors found there was no difference in average starting salary between men and women graduates of engineering and technology, and for subjects allied to medicine and dentistry.

The report calls for more action by ministers, schools and businesses to get girls studying Stem subjects.

“There are many factors that contribute to the gender pay gap. One of these occurs before entering the workforce, when boys and girls decide what to study at school and university,” said Emma Codd, managing partner for talent at Deloitte.

“Starting at GCSE level, where three times more boys than girls take computing and 50% more boys than girls study design and technology, these early decisions drive fundamental skill differences between the genders for those entering the workplace.”

The report also recommends more help for women with Stem qualifications to stay in related jobs. The researchers found as many as 70% of women with Stem qualifications were not working in relevant industries.

The TUC general secretary, Frances O’Grady, said helping women to stay in Stem careers was crucial to closing the gender pay gap alongside ensuring that work in sectors where women have traditionally worked, such as caring, is properly rewarded.

“We need action on the pay and quality of part-time work, flexible work opportunities, affordable childcare, and more independent paid leave for fathers,” O’Grady said.

Deloitte’s report sounded an optimistic note that government rules from next April forcing bigger employers to publish their pay gap should spur businesses into greater action.

A government spokesman highlighted those new rules and added “we agree that getting more girls into Stem subjects can play a part”.

“We are continuing to encourage more girls to study these subjects and last year, 12,500 more girls sat A-levels in Stem subjects compared to 2010,” he said.