Women earn £1/2m less over a lifetime than men: Even for identical jobs the pay gap's still huge

Separate studies have shown that businesses in the UK are 'spectacularly unsuccessful' at promoting high-flying women

Women in high-flying jobs earn almost half a million pounds less in their lives than men with identical careers, a damning report reveals today. They are also less likely to get a bonus and more likely to be made redundant. If they do receive a bonus, it is typically half the amount paid to a man doing exactly the same job.

Experts yesterday insisted the gulf in earnings was impossible to justify and described the gender pay gap as ‘disturbing’. The research from the Chartered Management Institute is based on the experiences of nearly 39,000 British executives. It said that although the number of women working in senior positions at FTSE 100 companies is rising, it remains low, at 17.3 per cent.

Separate studies have shown that businesses in the UK are ‘spectacularly unsuccessful’ at promoting high-flying women. The latest research takes the example of a man and a woman who start at the bottom of the executive career ladder at the age of 25, win equal promotions and retire at 60.

 

Professor Cary Cooper says many women are blighted by a lack of confidence

During their 35-year careers, the woman will earn £1.09million but the man will earn £1.52million. This leaves a black hole – dubbed the ‘lifetime earnings gap’, of £423,390. The report stresses that the gender pay gap does not fully develop until women are in their thirties. In their twenties, male and female executives tend to earn roughly the same salary, with both being paid an average of around £23,000. But the gap gets wider as they get older, with many women penalised for taking short career breaks to have children.

The CMI said a typical male management executive earns a basic salary of £40,325, but a woman in the same job earns £30,265. While a typical man can scoop an average bonus of around £7,500, his female colleague typically will receive only £3,730, and the picture gets worse as women get older. After rising from a junior executive to a director half of all men receive a bonus, compared with little more than a third of women.

Over the last year, the report found that 4.3 per cent of female executives were made redundant, compared with only 3.2 per cent of male executives. Dawn Nicholson, a partner at accountants Pricewaterhouse Coopers, said: ‘The size of the lifetime earnings gap between men and women is disturbing. It suggests that women are going backwards versus their male counterparts. If the career path is identical, then it is hard to see why the differential would exist, let alone how it could be justified. Employers must really ask themselves whether they are being absolutely unbiased in the pay decisions they make.’

Many working women are penalised after taking maternity leave. The penalties range from missing out on pay rises while at home with their babies to being taken less seriously on their return to work because they work flexibly. Many mothers who leave at 5pm every day, or take extra leave during the school holidays, say they feel less confident asking for pay rises or bonuses, or get overlooked for promotions. Others also find it more difficult to move jobs after having children which means they do not get the pay rises that typically come with switching employers.

 

Many women are penalised for taking short career breaks to have children

Professor Cary Cooper, from the Lancaster University Management School, said many women are also blighted by a lack of confidence. He said: ‘Men will ask for a promotion or a pay rise, which women are less likely to do. Men will let everybody know about their success whereas women will not let anybody know, but will hope the boss will recognise when they make a contribution.’ As many women may leave earlier in the evening to get back for their children, many feel ‘guilty’, which makes them reluctant to ask for a pay rise, he said.

Ann Francke, chief executive of the CMI, said Britain needs ‘immediate’ action to ‘set things straight.’ She added: ‘The Government should demand more transparency from companies on pay, naming and shaming organisations that are perpetuating inequality.’ Kate Green MP, Labour’s equalities spokesman, said: ‘The gender pay gap at the management level is higher now than it was in 2010, and at this rate, 42 years after the Equal Pay Act was passed, it will take at least another 21 years for management level pay amongst men and women to be equalised. ‘This is simply not good enough.’

Source: Daily Mail UK 

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