New legislation could force Irish companies to reveal details of their gender pay gap if enacted.
The current difference in pay of 13.9% equates to women in full-time employment in Ireland working for free for one month of every year.
Legislation brought forward by Minister of State for Equality David Stanton would require companies or organisations with more than 50 employees to publish any difference in pay to female and male employees.
The ‘Gender Pay Gap Information Bill’ was first introduced to the Seanad by Senator Ivan Bacik who has said she is confident the legislation on wage transparency would be enacted in Ireland before the end of the year.
Companies in the UK with more than 250 employees were legally required to report on gender pay differences within their organisations from May this year. More than 10,000 companies, including a number of Irish ones with a presence in the UK, submitted details on wage transparency with the final figures indicating that 78 per cent of UK firms pay men more than women on average.
On introducing the Bill to the Seanad last year, Senator Bacik spoke to the House about the shocking discrepancies in wages, in Ireland and across Europe:
- Women in the EU earn about 16% less than men
- Across Europe, women represent 60% of university graduates and yet they earn less over their careers, have lower pensions and are at greater risk of poverty when they retire
- Ireland’s pay gap is 13.9% – meaning women currently earn 13.9% less than men.
- The gender pay gap in Britain is a shocking 19.5%
- Women achieve better results than men at college but the pay gap opens and worsens as women and men progress through their careers.
- A Morgan McKinley report found the bonus gap between men and women is as much as 50%
- The World Economic Forum has estimated it will take up to 170 years for the gap to close fully if we do not act to change it.
Here is Ivana’s full speech on the subject, and it’s a shocking read.
‘The Gender Pay Gap Information Bill 2017 seeks to address a glaring and ongoing gender inequality in Irish society, which is the inequality in pay levels between women and men.
We call this the “gender pay gap”, which is the term used to describe the difference between the pay of women and men calculated based on average difference in gross hourly earnings.
In 2013, the European Commission published a major study on the gender pay gap across EU countries, noting that, on average, women in the EU earn about 16% less than men. There is a very wide range of disparity between women and men across different EU countries. This disparity remains the case despite the fact that women generally achieve higher level results at college and at school.
Across Europe women represent 60% of university graduates and yet the impact of the gender pay gap over women’s lifetimes means that they earn less over their careers, have lower pensions and are at greater risk of poverty when they retire. We know that the gender pay gap influences the career paths of women and may shape crucial decisions at each stage of our lives. Gender inequality in earnings will also impact into the future on our capacity to grow old comfortably.
The difference of 13.9% equates to women in full-time employment in Ireland working for free for about one month of every year.
What is the gender pay gap situation in Ireland?
Our gender pay gap, according to European Commission figures from 2013 is 13.9%, almost 14%, which means that women currently earn 13.9% less than men.
It is not the worst figure in the EU, nor is it anywhere near the best. It is better than the equivalent gap in our nearest neighbour in Britain, which will not for much longer be in the EU, but the gender pay gap there is 19.5%, a shocking figure.
The figure of 13.9% still impacts significantly on women’s careers and income levels here. To illustrate it in a more graphic way, the figure equates to women in full-time employment in Ireland working for free for about one month of every year. That perhaps illustrates better than any other figure the real impact of the pay gap on women’s lives.
Women tend to bear a disproportionate burden of caring responsibilities in the home, in particular child care but also elder care responsibilities compared to male colleagues.
Why is this the case?
A myriad of studies have examined reasons for this and the European Commission’s work suggests a number of factors. There may still be cases where women are subjected to direct discrimination in the workplace and paid less per hour than their male counterparts doing the same job, but this is less common now because it is specifically prohibited under both EU and national legislation.
However, there are ongoing structural problems, structural barriers to women’s pay equality that impact at a less obvious or less overt level on women’s pay equality. For example, we have a real problem with occupational gender segregation where women and men are concentrated in different roles and in different sectors. We know, for example, in the health and social work sector in the EU women make up 80% of the workforce. Sectors where women are particularly concentrated, therefore, often become feminised with the work in those sectors becoming undervalued, valued less highly than comparable work in different sectors, predominantly carried out by men and, again, we have multiple examples of this.
There is not only a glass ceiling but women tend to be stuck on a sticky floor in many workplaces.
Double Day Phenomenon
Women tend to bear a disproportionate burden of caring responsibilities in the home, in particular child care but also elder care responsibilities compared to male colleagues. This is often referred to as the phenomenon of the double day. Many of us are very familiar with that when we go home where we have caring responsibilities.
That means that women are, therefore, less likely than men to work as long hours and that impacts not only on their earning capacity but on their promotional prospects in many workplaces. We see more women, therefore, concentrated in job-sharing arrangements or part-time employment. This has a knock-on effect.
It means women are less likely to be promoted into senior management roles or to achieve promotions more generally in the workplace. Colleagues working in this area refer to this as the “sticky floor”. There is not only a glass ceiling but women tend to be stuck on a sticky floor in many workplaces.
Often we do not put ourselves forward for promotion because we may know it simply will not be compatible with other caring responsibilities. All these factors impact on differential pay rates for men and women when we average out pay across different sectors but the results are shocking.
In the case of Ireland, a report done by Morgan McKinley in 2016 provides a detailed insight into how the gender pay gap impacts on the Irish labour market. It was a study of 5,500 professionals, men and women, in Ireland. It found the gender pay gap increases along with the educational level attained by women.
Women achieve better results than men at college but the pay gap opens and worsens as women and men progress through their careers. While there was a pay gap of 22% between men and women with no degree, the pay gap increased to an unbelievable 28% for men and women with a PhD.
The average earnings of a man with a PhD are €74,000 per annum while for a woman with a PhD, it is €53,500. For those with an executive MBA, the figure was even more stark in that a pay gap of 33% opens up between men and women with equal qualifications.
The gap opens when women are most likely to have children, in their early to mid-30s, with men’s career prospects accelerating and women’s falling back.
The pay gap widens also with years of experience from a 12% gap, when women and men start out on their careers, up to five years’ experience, to a 28% pay gap for women and men who have more than 15 years’ experience.
I have long had a passionate interest in women’s equality in the workplace and some years ago I and some colleagues conducted an academic survey, funded by the Department of Justice, of women and men in the legal professions entitled, Gender in Justice, which found that while women outnumber men by a significant proportion in university law degrees, once they entered the workforce a gap opened up in terms of career prospects, income and promotion.
We did a qualitative survey as well and when we asked why this was so the answer from men and women was that it is to do with children. The gap opens when women are most likely to have children, in their early to mid-30s, with men’s career prospects accelerating and women’s falling back.
This is a real issue and there is a range of things to be done to tackle it. It has been highlighted and remarked on, not only by trade unions, equality advocates and the National Women’s Council but also by major corporations, the World Economic Forum, which published a major report on the global gender gap in 2016, and by multinational corporations, such as Unilever, that women’s underemployment and lower income levels have a seriously detrimental effect on world economic growth. There are very sound commercial reasons to address the gender pay gap too, and the Morgan McKinley report illustrates that.
There are key ways to tackle gender pay inequality. Apart from the big picture of child care and parental leave, we need to examine the legislation introduced in other EU countries which has proved effective in tackling gender pay gaps.
What can we do about it?
There is a range of initiatives that need to be taken to deal with this ongoing inequality, in particular initiatives to strengthen supports for women returning to work after having children, and to support men taking time off work, such as paid parental leave. Most men of my generation and younger wish to take on more caring responsibilities outside the home and we need to make sure the workplace supports are available for them to do so.
There are key ways to tackle gender pay inequality. Apart from the big picture of child care and parental leave, we need to examine the legislation introduced in other EU countries which has proved effective in tackling gender pay gaps. This, in particular, is what our Bill seeks to do.
It takes a carrot, not a big stick approach, to empower the Irish Human Rights and Equality Commission, IHREC, to administer a pay reporting mechanism. This would require companies or organisations with more than 50 employees to publish the difference in the rates they pay to men and women employees, in effect to conduct an audit of their pay scales to establish whether a gender pay gap exists.
We also seek in the legislation to require employers to publish details of bonus pay and the Morgan McKinley report found the bonus gap is as much as 50%.
It is a carrot because it is enabling legislation. It would facilitate the publication of these figures and enable companies to address what they may not even be aware of, that there is, in fact, a gap in pay between the men and women they employ.
We also seek in the legislation to require employers to publish details of bonus pay and the Morgan McKinley report found the bonus gap is as much as 50%. There are several different levels of pay disparity that need to be addressed. The key aspect of the Bill is to ensure transparency in pay rates, to ensure that we can highlight any gender pay gap that exists.
It is not enough to hope organisations will volunteer this information but we have seen similar legislation prove effective in Belgium, one of the first countries to introduce it, where there is now a pay gap of just under 7%, half our gap. Iceland, Australia and Germany have introduced similar legislation and closer to us, Britain has recently implemented gender pay gap reporting with new regulations requiring companies with 250 or more staff to record annually how much they pay men and women.
Our legislation seeks to implement recommendations from the EU Commission, Morgan McKinley and a range of other international bodies, such as the World Economic Forum, to ensure we have greater transparency in pay rates and to enable companies, working with IHREC, to address pay disparity where it exists, to draw up action plans to tackle pay disparity and to begin to close the gender pay gap.
The World Economic Forum has estimated it will take up to 170 years for the gap to close fully if we do not do anything. Inaction is no longer desirable. We need to ensure positive action is taken, as we did with gender quotas in the political sphere and we saw the impact that had on the numbers of women elected in the last election. This important and progressive legislation will also be most effective in tackling the ongoing pay inequality between women and men.’