Covid-19 Causes Gender Pay Gap to Widen

Apr 7

Post pandemic, it is estimated by the World Economic Forum to take 257 years to close the gender pay gap.

Since the advent of women within the British working world, the gender pay gap has been extremely apparent. In 2020, the gender pay gap across all employees stood at 15.5%. [1] This meant that the average woman was expected to get 15.5% lower pay than a man doing the exact same job. According to a study by Prospect, a trade union group, this equates to an average of £7,500 a year. [2]

The shocking and unequal statistic varies per industry with women within consulting, receiving nearly 30% less pay than their male counterparts. [3] An explanation for this is that the upper levels of corporate leadership are largely dominated by men. For example, in consulting, only 21% of partners are women. [4] The statistic worsens when analysing the disproportionate representation of ethnic minority women, with only 8% of partners within consulting being from ethnic minority backgrounds. [5]

The 15.5% gender pay gap certainly is surprising. A study led by the Independent concluded that due to the gender pay gap, an average woman is able to save £1,100 less yearly to her pension. [6] Over a course of a lifetime, this means that a woman is to end her working life with £100,000 less in long-term savings than the average man of the same age. [7] This puts the gender pensions gap at close to 40%. [8]

Unfortunately, the impacts of Covid-19 have disproportionally effected women, causing the gender pay gap to widen. Women’s earnings have dropped by an average of 13% during the pandemic, almost double the typical decrease in male earnings. [9] The World Economic Forum predicts that following Covid-19, it will now take 257 years to achieve economic gender parity. [10] This is a stark difference from 100 years predicted pre pandemic in 2017. [11]

The disproportionate effect of the pandemic on women can be attributed to a number of reasons.

Firstly, during the pandemic, working women have been more likely than men to take on additional care and housework duties. With the closure of schools, working women on average spent 10 hours per week caring for children during lockdown compared with men spending 8 hours per week. [12]

Women also spent double the number of hours per week than men on housework during lockdown. [13] The burden of additional care and housework duties during the pandemic meant that women had to turn down paid work in order to cope. This in turn led to the gender pay gap widening.

Another factor contributing to the widening of the gender pay gap is that women tended to be more likely to be working in sectors that were forced to be shut down as a result of national lockdowns. These included the hospitality, retail, beauty and tourism industries. For example, the closure of Debenhams and Arcadia alone led to over 25,000 women losing their jobs. [14] This has made women 1.8 times more likely than men to have lost the jobs during the pandemic. [15]

This was extremely apparent within working women aged 25-34, who were more likely to have young children at home during the pandemic. According to the Institute of Fiscal Studies, this demographic of women was 50% more likely than working fathers to have either lost or quit their job. [16]

As the evidence demonstrates, the pandemic has certainly had a disproportionate effect on women leading to a widening of the gender pay gap. But how can we as address this as a nation?

In a letter to the Telegraph, over 60 MPs and business leaders acknowledged that lockdown’s financial impact on women has been overlooked. [17] Moving forward, central governments and large corporations must ensure that Covid-19 recovery plans acknowledge the gendered impacts of the pandemic.

British policy makers can take inspiration form the Hawaiian Covid-19 recovery plan, which is the first plan that has formally acknowledged that the pandemic has been much harder on women than on men. [18] The Kaua’j County Council and the Maui and Hawai’I Island Councils passed a resolution supporting a feminist recovery plan. [19] The gendered Covid-19 recovery plan includes clauses to expand wages for informal caregivers to mitigate the economic impact that the pandemic has had on women’s wages.

Another example to draw inspiration from is Canada; the Canadian government have given US$80 million to a Feminist Response and Recovery Fund. [20] The fund will be used to finance projects that promote economic security for women and is a great example of a centrally funded project to close the gender pay gap. [21]

Aside from equity within the workforce, there are large economic gains if Britain improve levels of female employment following the pandemic. A 2019 report from PwC said that total GDP within Britain can increase by $250billion if the UK had Swedish levels of female employment. [22]

Large corporations such as Capgemini have also launched projects following the pandemic which focus on narrowing the gender pay gap. Their active promotion of females to senior roles has improved the percentage of senior women within the company. [23]

Therefore, it is evident that in order to achieve gender equality within the workforce, governments and corporations must acknowledge that the Covid-19 pandemic has had an unfair impact on women’s wages. Only by acknowledging this in recovery plans can we as a nation take the first step towards narrowing the gender pay gap.

[1]https://www.telegraph.co.uk/women/life/gender-pandemic-gap-covid-19-sent-women-back-1950s/

[2] https://www.independent.co.uk/money/gender-women-pay-gap-pensions-savings-tips-help-old-age-b1814450.html

[3] https://www.ft.com/content/a22af1b3-837a-44df-99a0-966716f8eb3c

[4] https://www.ft.com/content/a22af1b3-837a-44df-99a0-966716f8eb3c

[5] https://www.ft.com/content/a22af1b3-837a-44df-99a0-966716f8eb3c

[6] https://www.independent.co.uk/money/gender-women-pay-gap-pensions-savings-tips-help-old-age-b1814450.html

[7] https://www.independent.co.uk/money/gender-women-pay-gap-pensions-savings-tips-help-old-age-b1814450.html

[8] https://www.independent.co.uk/money/gender-women-pay-gap-pensions-savings-tips-help-old-age-b1814450.html

[9] https://www.independent.co.uk/money/gender-women-pay-gap-pensions-savings-tips-help-old-age-b1814450.html

[10] https://www.ft.com/content/a22af1b3-837a-44df-99a0-966716f8eb3c

[11] https://www.weforum.org/agenda/2018/01/closing-the-pay-gap-for-good#:~:text=It%20is%20a%20complex%20problem%20with%20many%20facets%2C,100%20years%20to%20close%20the%20gender%20pay%20gap.

[12] https://www.telegraph.co.uk/women/life/gender-pandemic-gap-covid-19-sent-women-back-1950s/