PAY DISCRIMINATION
Discrimination is not causing gender pay gap, says IEA
Sex discrimination is not a significant cause of differences in pay between men and women, according to new research by the Institute of Economic Affairs.
The report – “Should we mind the gap?” – written by Professor J R Shackleton, concludes that “we should make far less of a song and dance about the gender pay gap”. The gaps in pay that do exist are principally explained by differences in working conditions and the values, preferences and choices of individual men and women, which are beyond the reach of government. What’s more, the report suggests that the pay gap is, in fact, falling, likely to fall further and may even go into reverse.
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The research argues that equal pay and anti-discrimination legislation may well be counter-productive. Shackleton, who is Professor of Economics and Dean of the Business School, University of East London, said: “The widespread belief that the gender pay gap is a reflection of deep rooted discrimination by employers is ill-informed and an unhelpful contribution to the debate. The pay gap is falling but is also a reflection of individuals’ lifestyle preferences. Government can’t regulate or legislate these away – and shouldn’t try to.”
Key findings
Among the report’s findings are the following:
For 22 to 29 year-old men and women, the median full-time pay gap is now less than 1%.
Women’s mean part-time earnings are now higher than those of male part-timers.
Pay gap comparisons between countries are much more favourable to the UK than is commonly understood.
Men tend to work longer hours and put in more overtime, with twice as many male as female managers working more than 48 hours a week.
Men tend to seek higher pay and career success – while more women seek job satisfaction.
Two-thirds of women plan to take a career break, while less than one in eight of men do.
Proposals to introduce compulsory pay audits, to give greater subsidies to childcare, to use government procurement to support equal pay drives, and increased flexible working are unlikely to narrow the gap significantly.
Other pay gaps – ethnic gaps, disability, religious and sexual orientation - exist. These interact in unpredictable ways and thus make a consistent public policy impossible to achieve.
A final word
The report has led the IEA’s Editorial Director, Philip Booth, to call for the repeal of legislation that "purports to promote equality in the workplace". Professor Booth said:
“In the last decade, in the name of promoting equality, we have had a huge increase in the burden placed upon employers. This can often harm the very people it is intended to help. Indeed, given this new evidence, we should question the need for the Equal Pay Act. It seems to be individual choices and not systematic discrimination that determines pay and conditions.”
Want to know more?
Title: "Should we mind the gap?", Hobart Paper 164, Professor J R Shackleton, published by the Institute of Economic Affairs.
Availability: The full report can be downloaded in PDF format, free of charge, at www.iea.org.uk/record.jsp?type=book&ID=442.
The Institute of Economic Affairs is the “UK's original free-market think-tank”, founded in 1955. The IEA's goal is to explain free-market ideas to the public, including politicians, students, journalists, businessmen, academics and anyone interested in public policy. Its web site is www.iea.org.uk.