The impact of COVID-19 on the gender pay gap

March 8, 2021
Susan Milner

On behalf of the GW4 Pay Equality Research Consortium and to mark International Women’s Day Professor Susan Milner, from the University of Bath, explores the impact the COVID-19 pandemic has had on the gender pay gap and how robust reporting by employers is necessary to help assess the impacts and make meaningful changes.

Current members of GW4 Pay Equality Research Consortium include Professor Melanie Jones and Dr Alison Parken from Cardiff University; Dr Emma Jeanes from the University of Exeter; and Professor Hazel Conley from the University of the West of England and Dr Claire Evans from Cardiff Metropolitan University.

(Photo by Cedric Fauntleroy from Pexels)

On International Women’s Day 2021, we have the hope that vaccination and testing will bring security to our lives, and the chance of recovery. The last year has been calamitous for women and girls around the world, as the pandemic exacerbated existing inequalities. The United Nations and other international organisations have warned of the loss of hard-won rights in many countries which could take many years to recover.

In the UK, as the parliamentary Women and Equalities Committee reported on 9 February, lockdowns and restrictions placed a heavy burden on women. They are disproportionately present in the key worker occupations which were exposed to risk of infection, and in ‘shut-down’ sectors which saw massive job losses. Childcare and domestic responsibilities have intensified during lockdowns and school closures, to the extent that many women have had to leave their employment. In most sectors, they are paid less than men, and they are more likely to be working in low-paid jobs.

One of the few measures to support working women enacted in the last few years was the requirement for larger organisations (those employing 250 or more) to report annually on their gender pay gap. In 2020, the government decided to suspend this requirement, but has reinstated it for 2021 with an extended deadline (to October 2021). Gender pay gap reporting provides only a basic snapshot of the situation of women within a work organisation, and campaigners have called for the regulations to be strengthened so as to give more context (for example, about policies on maternity, paternity and parental leave, and about working time) and more information about plans to address disparities. There are also calls for pay gap reporting be extended to race and ethnicity. Despite these shortcomings, which could be addressed in future legislation, gender pay gap reporting fulfilled its basic objective of shining a light on workplace practices and opening up a space for discussion and comparison.

The GW4 Pay Equality Consortium investigated employer responses to the introduction of gender pay gap reporting, back in 2016. We found a good deal of uncertainty and very few examples of pro-active measures to prepare for the regulations, but general support for the principle of mandatory reporting, as it helped employers to understand their own workforce better and to benchmark against others in the same sector. Managers also reported to us that the introduction of reporting requirements posed very few administrative problems and little cost. Given these findings and the fact that organisations have already put in place mechanisms to collect data and report in 2018 and 2019, and given the value of the reports for organisational benchmarking and government policy, it makes sense to stick to the annual reporting round, but give additional short-term flexibility in deadlines where needed. Because of the hiatus in 2020-21, vigilance is needed to ensure that the quality and reliability of reporting (already a cause for concern in some cases) improve over time.

Recovery from the traumatic experiences of the pandemic requires the highest quality data to enable us to assess their impact. For various reasons, including a high level of discontinuity in employment causing data gaps, as well as practical difficulties of data collection under restrictive conditions, the impact of lockdowns on women’s employment and pay is still being pieced together. The Office for National Statistics, which publishes annual figures on the unadjusted aggregate gender pay gap, has so far tracked data only to April 2020, when it found no impact of lockdown on underlying pay trends. The provisional 2020 data showed positive signs: a fall in the gender pay gap in professional and administrative occupations, particularly in higher-paid managerial roles; and continued narrowing of pay gaps among younger workers. It also indicated a significant narrowing of the full-time gender pay gap, which requires further investigation when better data are available. Nevertheless, the gender pay gap is stubbornly high among the highest paid categories of employment, and generally in the private sector. Pay and progression prospects for part-time workers, the majority of whom are women, remain much lower than for full-timers, and there are signs they suffered particularly badly from job losses in 2020.

Some of the labour market changes which happened dramatically as a result of the pandemic may herald a longer-term shift in employment, such as the closure of many face-to-face services in retail and banking. These changes will have gendered impacts, and they have already been seen to affect young people in particular. Understanding these shifts and who is affected by them will be essential for any investment in retraining and economic recovery. Without such investment, there is a real danger that the gains made to date in equalising young women’s life chances will be lost. Meanwhile, continued pay squeezes in the public sector have a depressive effect on women’s pay overall, including for the nurses and other health professionals on whom we all depend.

The Pay Equality Research Consortium is currently analysing workforce data to track changes in employment and pay over the last year. Our research to date indicates the need for further research into the drivers of pay inequality in the health and care sectors, within a broader understanding of the social value of employment, and into the relationship between part-time work, pay inequality, and labour market insecurity.