UK firms to be forced to disclose gender pay gap

The UK government has announced plans to force employers to disclose the gap in pay between their male and female employees.

From 2016, businesses employing more than 250 people will be forced to publish information about the gender pay gap, under the new rules.

On average, British women currently earn around a fifth less than their male counterparts (19.1%), which is the sixth-highest gender pay gap in the EU.

Commenting on the policy, UK prime minister David Cameron said: “That will cast sunlight on the discrepancies and create the pressure we need for change, driving women’s wages up.”

Previously, the government has encouraged companies to disclose information about the gender pay gap voluntarily. However, so far only a small number of companies—including professional services provider PwC and retailer Tesco—have done so.

The new policy was criticised by the right-wing Adam Smith Institute. Spokesperson Kate Andrews commented that: “Forcing businesses with more than 250 employees to publish their ‘pay gaps’ will only promote more myths and confusion. There is no such thing as an ‘average salary’; education, previous experiences, negotiating tactics, and unique abilities all contribute to one’s salary, none of which can be known by comparing John and Jane’s annual take-home pay on a spreadsheet.”

In an article for IZA World of Labor, Solomon Polachek looks at what governments can do to close the gender pay gap. Noting that the gap is already decreasing in many countries because of demographic changes, he argues that “economic policies that promote even greater lifetime work for women can successfully reduce the gender wage gap further.”

Read more on this story at the Guardian.

Related articles:
Equal pay legislation and the gender wage gap by Solomon W. Polachek
Wage compression and the gender pay gap by Lawrence M. Kahn