Nicky Morgan has proposed the worst possible way to calculate a gender pay gap
Back in July 2015, David Cameron announced he'd close the gender pay gap in the next decade. Proposing to take the first step by making larger firms publish their pay gap figures, I wrote up a response for the Spectator's Coffee House, arguing that this was an ill-conceived idea:
His plan to force businesses with 250+ employees to publish their ‘wage gap’ figures will create more bogus numbers and further perpetuate the myth. It is impossible to know simply by looking at the numbers on the spreadsheet why someone’s salary is a certain figure. One’s education or training, previous work experience, negotiation manoeuvres, and unique character traits will all contribute to their salary; Jack and Jill may be headed-on-up the career hill together, but they will be coming from two completely different paths.
The government launched an official consultation to determine how, exactly, they would make companies publish their 'pay gaps'. The ASI responded to the consultation, recommending that if the government were to go through with this policy, it absolutely must get companies to compare jobs like-for-like. Without a direct comparison of men and women doing the same job (and ideally for the same amount of time, with the same educational background, etc), it would be impossible to know if any income disparity was a result of employer-based sexism, or the many other factors that can contribute to one's overall salary.
Today we discovered that Woman's Minister Nicky Morgan did not take Ben's advice. Instead, she has implemented what is probably the worst way to calculate a gender pay gap.
In 2018, businesses with 250+ employees will be forced to publish on their websites the mean and median calculations of their male and female salaries, as well as the 'pay ranges' of men and women (i.e. who's at the top and who's at the bottom).
The problem? Simply calculating the mean and median of male and female salaries controls for absolutely nothing. Without calculating in hours worked, job, department, previous experience, flexibility of hours, and time taken off work, these figures tell us nothing about whether employers are actually paying female workers less than men for the same roles.
Evidence suggests employers are big advocates of women. Indeed, when you do control for factors like background, hours and job, women are often more likely to earn more than men, and are more likely to be promoted as well.
But now, thanks to the government, in a few years time we're going to have a bunch of false stats that help perpetuate the myth that women are victims of sexist employers, and will never be able to access the same opportunities as men. A great day for professional feminists, who have been running out of talking points as women shatter those alleged glass ceilings left, right and center. An unfortunate day for the rest of us, who will have to continue to explain why comparing the CEO's salary to a first-year employee doesn't do much to prove 'sexism'.