Gender pay-gap data shows the future is far from female, in earnings at least

David Dodwell says the recent UK pay-gap data shows that women still face the most basic form of workplace discrimination. Perhaps the knowledge that women are becoming the biggest consumer group will encourage their elevation to senior executive levels

PUBLISHED : Friday, 13 April, 2018, 2:29pm
UPDATED : Friday, 13 April, 2018, 10:33pm

In my early life, one of the big (but friendly) arguments I used to have with my ex-wife, who was then responsible for equal opportunities policy in the very-politically-correct London borough of Camden, was over her unflagging bias towards gender inequality – in short, reducing discrimination against women in the workplace.

Don’t get me wrong. I believe she was doing excellent and invaluable work. But it peeved me that the same enthusiasm was not being focused on racial discrimination, or discrimination against sexual minorities, or ageism.

As I watched the media frenzy in the UK last week over what was said to be the world’s most comprehensive examination of the pay gap between men and women at work, I recognised how wrong I was to have challenged her. Here we are, 40 years later, and still we are wrestling with the most basic forms of discrimination against women. Why is it so hard to shift cultural prejudices, no matter how self-evident the need? Despite the progress being made by socialist-controlled Camden all those decades ago, for most of Britain, and for much of the world, the needle of prejudice has shifted barely at all – whether for women, ethnic minorities or gay people.

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The UK survey findings were sobering, suggesting that 89 per cent of women work for a company with a pay gap that favours men, with half working for a company that pays men at least 9 per cent more than women. Only 11 per cent of women work in companies that pay them equally or better.

Apparently the worst sectors are construction, finance and insurance, and the education sector, where the gap is 20 per cent or more.

The gender-based pay bias is not simply due to women being paid less for the same work – though embarrassing evidence from within the hallowed BBC suggests that this may still be widespread. More than anything else, it is due to a bigger proportion of men rising to the highest levels of a company, not just because men are being preferred for promotion over women, but because women’s careers are often held back by the need to take time off to raise families (or care for infirm elderly people).

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But before I completely capitulate on my argument that discrimination covers many more segments of the community than women, I recall fascinating US government data unveiled last year on pay gaps linked with ethnicity as well as gender. It discovered that the Asian-American community saw the worst male-female pay gaps – with Asian-American women earning 20 per cent less than Asian-American men – and the narrowest gap between Black/African Americans (just 10 per cent less).

Asian women in the US may face pay discrimination compared to Asian men, but compared to every other group in the society – male or female – they today fare relatively well

But guess what? Asian-American men were the US’ best-paid group, with average annual incomes of US$63,000, and Asian-American women were better paid (at an average US$50,800) than any other segment of the population except White males, who earned an average of US$56,400. 

In short, Asian women in the US may face pay discrimination compared to Asian men, but compared to every other group in the society – male or female – they today fare relatively well.

By the way, that same US data showed that pay discrimination between men and women gets worse as we age. The average 34-year-old American woman earns just 11 per cent less than her male counterpart. But at the age of 64, she earns on average 26 per cent less. Age discrimination is alive and well.

But let us not make light of the new UK survey findings. They provide powerful evidence in support of extensive change. Combine this with the recent awful evidence of sexual abuse and predation in the workplace, and there is perhaps at last a basis for some serious changes in corporate behaviour.

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The irony here is that the likely benefits of eliminating gender-based discrimination have been self-evident for quite a long time. Statistics abound on how companies with better gender balances provide better and more consistent performance.

Statistics abound on how companies with better gender balances provide better and more consistent performance

But there are other important reasons why our failure to encourage equal female participation in the workforce is powerfully counterproductive. For a quick summation of some of the evidence, you can do worse than browse chapter 3 of Joseph Coughlin’s Longevity Economy, titled “The Future is Female”. 

We need women in senior management for many reasons, but perhaps most simply because, as our societies age, it is women who are clearly becoming the biggest consumer group in our communities. As Joe Coughlin, at Massachusetts Institute of Technology’s AgeLab has noted, in the US, the over-50s control 83 per cent of all household wealth, and in 2015 spent US$5.6 trillion – compared with US$4.9 trillion spent by the under-50s. Women dominate spending decisions in this part of the population not just because they account for most of the over-50s, but because they are by far the predominant consumer decision-makers. 

For this reason, Coughlin says tongue-in-cheek that every company’s “Chief Consumption Officer” should be a middle-aged woman. That is a message powerfully directed towards Silicon Valley, which is predominantly male and under 30. He points to epic product missteps that would never have been made with more women in senior positions. 

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Take Apple Health, Apple’s first comprehensive health tracking app which had been on the market for more than two years before they realised it omitted to track when women were menstruating, hence missing the single most important monthly blip in a woman’s health metrics. Or take the hi-tech life sciences group that was a leader in making artificial hearts – except that they were designed too big to fit into the body of 80 per cent of women.

Many difficult and controversial things still need to be done to make sure we capture the full potential of women in the workplace. Many are being discussed, and some are even being acted upon as I write, but some have not even begun to register in the public mind. For me, the most obvious and pressing of these is the need to revamp our education systems to enable women in their 40s, after children have risen into their teens, to re-skill systematically for what in future is likely to be a further 30-year career.

So many things still to be done, even after foundational work in Camden back in the 1970s. At least we have a massive new UK data set to drive the mission forward.

David Dodwell researches and writes about global, regional and Hong Kong challenges from a Hong Kong point of view