Faced with the following:
“Yet listen to this figure - if you are a woman working part-time you get 40 per cent less per hour on average than a man working full-time.”
You would think that Harriet Harman was onto something. That women earn 40% less than men is astonishing. Indeed, she goes on to say
“Do we think she is 40 per cent less intelligent, less committed, less hard-working, less qualified? It’s not the case. It’s entrenched discrimination.”
Quite.
But a day or so ago, I argued that it is not so easy to compare full-time employee wages with part-time employee wages, since the wages due should be calculated on outcomes and not on inputs. Effectively, just because someone has the same job description does not mean that they should earn the same, and in my mind (and it seems employers) there is a significant difference between the outcomes of a full and part time employee.
So rather than comparing apples with pears, as Harriet likes to do by comparing full time men with part time women in order to come to some conclusion about women/male inequality, let’s compare apples with apples.
In the year to April 2007, according to the Office for National Statistics, weekly median gross earnings for a woman working part-time are £145.60 and for a man, £137.80. If you compare women who aren’t married or cohabiting with men who aren’t married or cohabiting, hourly pay for the women is £8.82 and for men £8.72.
So if part time women 40% earn less than full time men, you know what, part time men learn even less! Where is the outcry on that statistic Ms Harman? Do you think men are less intelligent, less committed, less hard-working, less qualified? Is it also entrenched discrimination? Or could it be that employers use a mechanism called the market to decide who should earn what, and that full time employees are more valuable assets than part time ones?
Of course, there is a gender pay gap and some of this is due to discrimination, but rather than comparing apples with oranges, or taking specific examples as I have done above, let’s look into the figures in more detail. According to the ONS from a few years ago, full time women earned 82% of the pay of full time men and the gap is widening over time. Again, this looks damning. But rather than making an emotive speach about how unfair it is on women, let’s continue with the analysis. Indeed, according to the ONS, the widening of the gap is
“largely the result of differences at the top end of the earnings distribution where the growth in men’s earnings has outstripped that of women.”
One must therefore look across the distribution of earnings and compare the mean average for men and women at each point on the cumulative distribution. When one does this, one finds that in the lowest 75% of the earnings, the pay gap between men and women is actually narrowing. Indeed, by 0.5%! But of course, there is always a disclaimer. If one reads the statistical reports, rather than listen to some dippy politician (and trust me, Harman is) then we find out
“Although average hourly pay excluding overtime provides a useful comparison of men’s and women’s earnings, it does not reveal differences in rates of pay for comparable jobs. This is because such averages do not highlight the different employment characteristics of men and women, such as the differing proportions in higher or lower-paid occupations and their length of time in jobs.”
So rather than worrying about absolute pay differences between men and women from the whole employment market, which is still comparing apples with oranges, one should compare how much men and women earn in the same job. And that is the subject of another post.