Yes, the gender pay gap is real, and probably worse than you think

It’s also true that when women go off to work, they are less likely than men to be employed in senior positions. He’s the CEO and she’s the secretary (although it’s worth noting the pay gap as calculated by the Workplace Gender Equality Agency excludes some positions deemed as “junior”).

Quite why traditionally female work is so undervalued by society and why women fail to progress up the career ladder are worthy questions in themselves and something the gender pay gap helps to highlight.

But even after taking into account these compositional effects from industry segregation and seniority, researchers keep striking upon a stubborn bedrock of pay difference which is harder to explain away.

In the “blame women” camp, sits factors such as a greater hesitancy among women to ask for pay rises, negotiate starting salaries or put themselves forward for promotion.

On the “blame bosses” side of the ledger, there is the “unconscious bias” against female job candidates, a lack of flexible working arrangements, the persistence of old boys’ club networks and just outright discrimination.

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And then there is the elephant in the living room (and the kitchen, and the laundry…) as Treasury notes: “Even in households where both partners work full-time, women report doing 40 per cent more unpaid work than men.”

But wait, it gets worse.

So far, I have only been discussing the pay disparity between male and female workers who work full-time.

This overlooks the important fact that women also tend to cluster in part-time work, largely due to those caring and other home responsibilities. Indeed, women are twice as likely as men to work part-time. So, when you measure the total returns to employment across all employees – full and part-time – the gender pay gap blows out to about 30 per cent.

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Now, of course, if you work fewer hours, you’d expect to be paid less. But the fact that women, as a cohort, are taking home a dramatically smaller proportion of the total wage bill in their own names does matter, even when they operate as part of a household or couple.

Why? Because money matters. Money, after all, is power – and it turns out women have less of both.

The ability to generate an income – an ability eroded by time spent out of the workforce – is a key factor in not only women but anyone’s ability to live independent lives, to leave unsuitable jobs or relationships where necessary.

Equality in the workplace matters for society, too. Why? Because unless you believe intellect and talent are unevenly distributed throughout the sexes and weighted more heavily towards the male of the species, the current unequal distribution of women in positions of power suggests a suboptimal use of the greatest talents of our population.

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We miss out on new scientific discoveries, good policy designs, astute business decisions – you name it – when the talents of our best people are not thrown at the task at hand with equal gusto.

I liken it to the selection of sporting teams. Say you created two separate lines: one of men and one of women, each standing in descending order of merit. If you believe in the equal distribution of talent, your Man A would be of equal standing to Woman A. Man B and Woman B would then be the next best choice, and so on. If you then selected a team comprising Man A, Man B, Man C and Man D, you’d – as a matter of mathematical logic – end up with an inferior team than if you had selected Man A, Woman A, Man B and Woman B.

Advancing gender equality in the workforce not only improves outcomes for individual women, but improves society’s overall productivity and living standards by drawing on our best talents.

So let’s stop debating whether the gender pay gap is real and start debating ways to close it.

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