Fat cat pay rises distort gender pay gap figures


Huge pay rises awarded to a small number of male executives meant that the gender pay gap in the UK actually widened in 2002 against the long-term trend.

The gender pay gap has narrowed at the rate of about 0.5 percentage points a year over the last twenty years but in 2002 it widened by 0.3 percentage points.

The anomaly is entirely due to the pay for the top 5 per cent of male employees growing at such a rate that it pulled the average for all men upwards and further away from the average for all women.

But within the remaining 95 per cent of the workforce, women's average hourly earnings grew at a faster rate than men's. So had it not been for the rises received by the most highly-paid men the gender pay gap would have actually narrowed in 2002.

A new analysis of the gender pay gap by Incomes Data Services explains the recent influences on men's and women's pay and looks more closely at the factors behind the gender pay gap.

A key factor is the different types of jobs performed by men and women. The IDS analysis highlights the concentration of women in occupations such as retail assistants, cleaners, clerical jobs and 'caring' roles. Men's employment is less concentrated, but the largest groups are to be found in management jobs involving sales, production and maintenance and in other jobs to do with goods handling and storage.

Within particular occupations, the pay gap emerges at its widest among company financial managers and treasurers (where women's average hourly earnings amount to some 60 per cent of men's) and at its narrowest among check-out operators and retail cashiers (where women's average hourly earnings amount to more than 99 per cent of men's).

The article analysing the gender pay gap appears in IDS Report 873 (January 2003).