Women lose hundreds of thousands of pounds over their working lives, says The Equality Trust.
The Equality Trust released its lifetime loss calculator today to mark Equal Pay Month, highlighting the long term effects of the gender pay gap for women. Based on the current figures reported under the gender pay gap regulations, women working at companies with a gender pay gap are set to lose up to hundreds of thousands of pounds over a working lifetime of 45 years.
The Equality Trust is launching this calculator in the City of London, with campaigners wearing suffragette sashes and handing out roses to women today, to raise awareness of the gender pay and bonus gaps and of unequal pay. This is part of the charity’s campaign calling on organisations to eradicate the gender pay and bonus gaps and carry out equal pay audits. The #EqualPay50 campaign was launched at a conference on 29th May 2019, marking one year until the 50th anniversary of The Equal Pay Act 1970. The Equality Trust’s analysis on ‘Fat Cat Day’ 2019 found that FTSE 100 women CEOs were taking home on average 54% of the salaries of their male counterparts.
This follows on from the charity’s report, From Pin Money to Fat Cats: Pay inequalities in the FTSE 100, an analysis of the FTSE 100-owned companies on a sector-by-sector basis in terms of CEO pay ratios, gender pay gaps and gender bonus gaps. It provides a benchmark snapshot prior to the introduction of pay ratio reporting legislation and paints a depressing picture of extreme inequality in the FTSE 100-owned companies, with the CEO of Vodafone taking home a salary 390 times that of a Customer Service Advisor, HSBC Bank Plc reporting a gender pay gap of 61% and Quadrant Catering Ltd reporting a gender bonus gap of 100%.
The report highlights the conviction among FTSE 100 companies that, despite having large gender pay gaps, this is not a result of unequal pay. This is despite using recruitment practices that have been described as a ‘high-risk factor’ as identified by the Equality and Human Rights Commission (EHRC).
Dr Wanda Wyporska, Executive Director, The Equality Trust said:
“It’s barely credible that almost 50 years after legislation, women are still having to fight for equal pay. We are highlighting the scale of this problem through our lifetime loss calculator. When even women at the top, those running FTSE 100 companies, are taking home, on average, 54% of the salaries of their male counterparts, then what hope is there for the rest of us? This deep inequality is at the heart of a social crisis that is ripping apart the fabric of society.
We believe that the gender pay gaps at many companies may be due to pay structures which are not rewarding men and women the same for work of equal value, importing benchmark salaries and a lack of transparency in starting salaries. These are factors which companies can easily deal with.”
As calculated by the Fawcett Society, Equal Pay Day will fall on 14th November this year and marks the day in the year when women effectively start working for free.
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Notes to editors:
1. For interviews or further comment jo.wittams@equalitytrust.org.uk
2. The Equality Trust is the national charity that campaigns to improve quality of life in the UK by reducing economic and social inequality. UK income inequality is among the highest in the developed world and evidence shows that this results in poorer mental and physical health, higher violent crime, poorer educational outcomes and lower levels of trust. Inequality affects us all.
3. The calculator can be found here: https://www.equalitytrust.org.uk/equalpay50/calculate-your-potential-lifetime-earnings-loss
4. Methodology. This tool is intended to indicate a potential loss based on the figures provided under the gender pay gap regulations. Our potential lifetime loss estimate is calculated on the basis of the gender pay gap as a percentage x working years (45) x salary. If a bonus is also entered then we have added the gender bonus gap as a percentage x working years (45) x bonus. If the bonus gap percentage is zero or less, or if the person does not enter a bonus figure, we don’t include the bonus part of the calculation above. Of course there are companies that have a positive pay gap, where women are paid more than men.
Therefore, for a company with a gender pay gap of 7.7% and a gender bonus gap of 23.7%, and a woman earning a £10k salary and £20k bonus, the equation would be as follows:
45 × (10,000 × 7.7÷100 + 20,000 × 23.7÷100) = estimated potential loss of £247,950
Our estimation of the day in the year after which women effectively cease to be paid is calculated using the equation:
365 (days in the year) × (100 – gender pay gap as a percentage) ÷ 100
Therefore, if the pay gap is 25%, a woman starts working for free after 365 × (100-25) ÷ 100 = 274 days (rounded) from the beginning of the year (1st January), which is 2nd October.
5. From Pin Money to Fat Cats can be found here: https://www.equalitytrust.org.uk/sites/default/files/FROMPINMONEYTOFATCATSFINAL_1.pdf