Labour Market

Gender pay gap figures “never fit for purpose”


In the Media

Dr Kristian Niemietz writes for CapX

In the Media

Alex Hammond writes for National Interest

IEA responds to government decision to suspend enforcement of gender pay gap reporting in light of the Covid-19 pandemic

Commenting on Equalities Minister Liz Truss’s decision to suspend enforcement of gender pay gap reporting in light of the Covid-19 pandemic Annabel Denham, Director of Communications at the Institute of Economic Affairs, said:

“The government’s suspension of compulsory reporting for this year, given the unprecedented pressures placed on businesses by Covid-19, is a welcome move. But the gender pay gap reporting measures – which force companies with over 250 employees to publish crude data each year – were never fit for purpose.

“The figures have repeatedly failed to tell us much that is meaningful about the gender pay gap, given they don’t break down any like-for-like comparisons between employees. They mask the huge strides taken by women in the workplace and distract from the challenges that persist, such as the motherhood penalty. Worse, they create perverse incentives for firms to avoid hiring young female employees in sectors traditionally dominated by men. That Government is suspending compulsory reporting this year shows just how onerous compliance is for businesses.

“Coronavirus is likely to have a significant impact on women – given they are more likely to take on unpaid caring responsibilities and less likely to hold full-time roles. Government should focus on these issues in the future, and leave gender pay gap reporting in the past.”

Notes to editors

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For further IEA reading on the gender pay gap, click here.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

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