MPs want action on ‘motherhood penalty’

March 22, 2016 12:16 am Published by

MPs want action on ‘motherhood penalty’

  • 22 March 2016
  • From the section Business

Women are paid nearly 20% less than menImage copyright
PAUL ELLIS/AFP/Getty Images

A group of MPs is demanding that greater steps are taken to combat a “motherhood penalty” that has left women being paid less than men.

A report by the Women and Equalities Select Committee said the government has failed to close the pay gap.

It said policies were needed to tackle barriers such as women’s disproportionate responsibility for childcare and low part-time wages.

It warned that the UK economy was suffering as a result.

It estimated that a failure to use women’s skills was costing the country £36bn a year, equal to 2% of GDP.

The wage difference between men and women stands at 19.2%, according to the Office for National Statistics, which has barely changed for four years.

Maria Miller, chairwoman of the committee, said: “The gender pay gap is holding back women and that isn’t going to change unless the government changes its policies now.

“The pay gap represents a massive loss to the UK’s economy and we must address it in the face of an ageing workforce, a skills crisis and the need for a more competitive economy.”

Childcare equality

The report said that providing equal support to men and women for looking after children, as well as other forms of unpaid caring roles, “is one of the most effective policy levers in reducing the gender pay gap”.

It suggested the introduction of three months, well-paid leave for fathers and second parents to share care more equally.

Sarah Jackson, chief executive of the charity Working Families, said: “The ‘motherhood penalty’ is a price that women continue to pay at work and at home. The answer lies with fathers.

“A decent period of paid paternity leave would allow more fathers to care for their young children and push this out of the domain of ‘women’s work’ for good.”

The report also criticised the lack of support in getting women back into employment, and said the government should set up a National Pathways to Work scheme to help the transition.

Women aged over 40 are most affected by the disparity in pay, particularly those aged between 50-59 years old who are paid, on average, 27% less than men.

The committee said: “Evidence suggests that the barriers to well-paid work currently experienced by women over 40 will continue unless action is taken to address the root causes of the gender pay gap.”

‘Make it public’

Britain’s financial services industry is being encouraged to sign up to a charter which could penalise executives if they do not meet targets to increase the number of senior female employees.

A government-commissioned review, led by Virgin Money’s chief executive, Jayne-Anne Gadhia was published on Tuesday. It recommends that financial services companies link parts of executive remuneration packages to gender balance targets.

It also suggested that companies set internal targets for gender diversity in their senior ranks and publish progress reports.

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LEON NEAL/AFP/Getty Images

Image caption

Virgin Money chief Jayne-Anne Gadhia is leading a review of women in finance

Lloyds Banking Group, Barclays, HSBC, the Royal Bank of Scotland and Virgin Money will all sign the new Women in Finance Charter. Asset manager Columbia Threadneedle and mutual Capital Credit Union have also signed up.

The Treasury said it will publish a list of all the companies that have aligned themselves with the charter in three months.

Ms Gadhia said research revealed that in 2015 women made up only 14% of executive committees in the financial services sector.

She said: “Too few women get to the top and this is not just about childcare. Women are leaving because the culture isn’t right.

“It’s very encouraging that a number of major financial services companies have already agreed to implement our recommendations. As a result, the issue will now be addressed in a way the City recognises.

“Make it public, measure it and report on it. What gets published gets done.”

Part-time trap

The report by the Women and Equalities Select Committee also highlighted that women are trapped in low-paid, part-time work, often below their skill sets.

Some 41% of female workers are part-time employees compared to 12% of men. The median hourly pay for full-time workers is £13.29 compared to £8.44 for those in part-time employment.

The report also found that 59% of minimum wage jobs are held by women. “Too little attention has been focused on the situation of women working in low-paid, highly feminised sectors like care, retail and cleaning, ” it said.

“Until their rates of pay and progression improve, the gender pay gap will not be eliminated.”

Frances O’Grady, secretary general of the TUC said: “If we don’t tackle problems like occupational segregation, the motherhood pay penalty and barriers to more equal parenting, the gender pay gap will take decades to close.”

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