Ruth speaking in Parliament

Women and Low Pay

Today, Ruth Cadbury MP, sponsored a debate in Westminster Hall on women and low pay. You can follow the debate on twitter by searching #womenandlowpay.

‘45 years after the Equal Pay Act was passed in parliament, we are yet to achieve it. In the UK a gender pay gap of 19% still exists, this is 3% higher than the EU average and despite it reducing by a third under the last Labour government.’

‘When talking about women and pay, we often focus on high paid jobs and the lack of women occupying positions in FTSE100 company boardrooms. Whilst it is important to look at ensuring women have career progression, especially when the TUC has reported that the pay divide between men and women in the top earners is nearly 55%, we need to ensure we are addressing women’s pay at the other end of the spectrum, those who are stuck in low paid minimum wage jobs. Indeed, the majority of low paid workers are women and three in five minimum wage jobs are held by women.’

‘While 85% of the government’s tax and benefit changes fall on women, the government may be talking the talk on equality, but their cuts agenda compromises any chances of improvement for women on the lowest pay.’

FULL SPEECH:

*** CHECK AGAINST DELIVERY ***

Thank you – this a vital subject for millions of women in this country, and for their families and their employers.

Living on low pay for women means not having enough to give your children nutritious food or to let them go on school journey or take them on holiday, not being able to escape a violent relationship, losing much of your pay on the cost of fares travelling to and from work and not being able to save enough to cover even those minor crises such as when the washing machine or the car breaks down,

45 years after the Equal Pay Act was passed in parliament, we are yet to achieve it. In the UK a gender pay gap of 19% still exists, this is 3% higher than the EU average and despite it reducing by a third under the last Labour government.

When talking about women and pay, we often focus on high paid jobs and the lack of women occupying positions in FTSE100 company boardrooms. Whilst it is important to look at ensuring women have career progression, especially when the TUC has reported that the pay divide between men and women in the top earners is nearly 55%, we need to ensure we are addressing women’s pay at the other end of the spectrum, those who are stuck in low paid minimum wage jobs. Indeed, the majority of low paid workers are women and three in five minimum wage jobs are held by women.

Every major piece of legislation that has improved the lives of women has been introduced by the Labour party. From the Minimum Wage Act in 1998 to the Equality Act in 2010, Labour has always been at the forefront of the fight for equality. While the government certainly knows how to talk the talk on equality, with the Prime Minister pledging to end the gender pay gap ‘within a generation’, when 85% of government tax and benefit cuts hit women, they are giving with one hand and taking from them with the other.

The Living Wage – or should we call it the True Living Wage so as not to confuse it with the rebranded Minimum Wage, an hourly rate set independently and updated annually. The Living Wage is calculated according to the basic cost of living in the UK, not median earnings. The current UK Living Wage is £8.25 an hour, the current London Living Wage is £9.40 an hour.

Employers choose to pay the Living Wage on a voluntary basis

And it is Labour Local Authorities that are taking the lead in rolling out the Living Wage in this country. I am proud of the role I played in implementing the Living Wage in Hounslow Council, not only for the Council’s own staff, but also those of its contractors, many of whom are women. It’s making a difference to many women’s lives and also to their workplace.

My honourable friend Kate Green, Labour’s women and equalities shadow minister, highlighted the importance of fair pay for women during living wage week, during her visit to a group of school meal staff in Camden, who had recently been awarded the London living wage. This pay rise was due to a sustained campaign by the Camden Journal and Unison which put pressure on the company to give the women the living wage that they deserved.

Upon receiving her pay increase, one of the women was delighted. She said that with the extra few pounds an hour, she would now be able to save a bit of money each month and eventually save up enough money to go on a family holiday. These few pounds an hour more meant so much to her because she had never been on a holiday before.

But, this has not just been good for the employees, but for the employer. They have seen an increase in staff satisfaction, which has led to higher retention rates. In fact, they had previously had a high staff turnover, with 40 vacancies to fill last summer, this year they only had 2.

And that is just it, having a large section of our workforce on a low wage, is bad for business and bad for the economy.

The government consultation on the gender pay gap discovered that equalising women’s productivity and employment to the same levels as men’s could add almost 600 billion pounds to the economy.

600 billion pounds.

The government has taken some lessons from the last Labour government, which is that for most women, childcare is a barrier for labour market participation, this is even truer of women on low pay. The Surestart initiative was introduced because Labour recognized that women were more likely to be in low paid jobs and therefore, in order to help them back into work, childcare needed to be subsidized.

It frustrates me that in order to help women back into the workforce, there has to be a recognition that women’s employment is on average worse paid and of less value. While it is good to see more women able to participate in the labour market, TUC research showed that over half of the job growth for women since 2010 has been in low paying sectors.

But why is that?

Why is women’s work worse paid?

The work that women do is crucial to the functioning of society, but the pay does not reflect that.

Despite the fact that women have as good or better qualifications than men, their skills are not awarded the same value as men and career progression is slower. We need to ensure that there is equal pay for work of equal value.

Women occupy 78% of jobs in health and social care, a sector that has an average salary of 40 pounds per week less than the UK economy average. By comparison, men account for 88% of those working in the more lucrative sectors of science, technology and engineering.

It is actually harder for women to find good quality jobs. Evidence suggests that women become ‘discouraged workers’ and this results in less women working or actively seeking work. They are discouraged workers because they face real challenges in finding decent quality work and the work traditionally carried out by women such as catering, cleaning and caring are too often low paid and undervalued.

I have an example provided to me from the TUC of just how brazen companies can be when employing women.

They discovered an advertisement in Wales for two seasonal roles, one for Santa Claus and one for Mrs Clause. Santa was being paid a fair wage of 12 pounds per hour, while Mrs Claus was paid the national minimum wage of 6.70 pounds per hour. There were no differences in job description, they both did the same amount of work but the womans role was deemed to be of less value.

While that may be seen by some as simply a one off, it does perfectly demonstrate just how different men and womens work is viewed.

Occupational segregation and the devaluing of work traditionally carried out by women such as caring, directly contributes to the gender pay gap.

This must be tackled and the government must do more to diversify the labour market.

In the UK Women earn – on average – 91% of men. Put another way - From the 9 November, just over a week ago, women are effectively working for free for the rest of the year due to the gender pay gap.

This is simply not acceptable, progress has not been quick enough. Under Labour, the gender pay gap reduced by a third -a trend that has since continued-, but while the gap has narrowed for full time workers, it has widened for part-time workers and we must not be complacent.

The pay gap is effecting women in later life too, as a lifetime of low pay guarantees a retirement with a low pension. 1 in 4 women pensioners live in poverty and those retiring this year can expect to be on 25% less per year than men. This just is not good enough.

The gender pay gap effects women from the day they start work, for the rest of their lives. 45 years after the equal pay act was passed, this gap should not exist.

Earlier this year, Labour called for a new Equal Pay Act, acknowledging that the current one has simply not prevented inequality between genders. Indeed, the current Act puts responsibility for enforcing equal pay on women allowing her to take her employer to tribunal, rather than it being a collective responsibility.

Going to an employment tribunal is a difficult process, firstly the employee must be a member of a trade union, pay for a lawyer or represent themselves. This can be a costly process which puts off many women from getting to that stage. However, if an employee is successful, the company is instructed by the tribunal to do an equal pay audit.

But how many women are getting to this stage?

Yesterday I participated in a Parliament Outreach initiative on Twitter and talked to women about this debate. Many women said they would not challenge an employer even if they did think they were being paid less than their male counterparts for fear of being sacked, with one woman saying that equal pay audits may be useful, but that she feared many women would ‘stay silent for fear of losing their jobs’.

The government cannot simply point to these measures and say they are tackling the gender pay gap when people do not have access to the tools they are providing. More needs to be done to make the tribunal process accessible and give women the confidence to challenge their employers for fair pay.

There also needs to be a move away from putting the responsibility on the employee to fight for equal pay and towards collective responsibility. Which is what Labour argued for at the beginning of the year.

It is impossible for a woman to demand equal pay if she does not know what her male counterpart is earning.

In July, the Prime Minister proclaimed that he would end the gender pay gap in a generation and while I welcome any efforts to address the hopeless situation we are currently in, more attention needs to be paid towards women in low pay, rather than simply focusing on women in high paid jobs.

I recognize that the recent efforts to address the pay gap between men and women are commendable.

Legislating for companies who employ more than 250 people to publish the difference between men and women employees’ pay, is a good way to push companies to pay men and women equally to avoid embarrassment and public naming and shaming.

But, traditional women’s employment in the 5 C’s of clerical, catering, caring, cashiering and cleaning are often in smaller companies, who will not need to publish that information.

We must also acknowledge it is not simply the discrepancy between wages but rather the value of women’s work that needs addressing. The government needs a strategy to boost the esteem and pay of those jobs that are typically undertaken by women.

Raising the Minimum wage by the end of this Parliament and re-branding it doesn’t fool me, or those women working on wages that are below the True Living Wage. And cutting tac credits for millions of working families doesn’t either.

I will end on this point.

While 85% of the government’s tax and benefit changes fall on women, the government may be talking the talk on equality, but their cuts agenda compromises any chances of improvement for women on the lowest pay.