The claim
“Why, for the first time in five years, has the gap between men and women’s pay increased? …because the minimum wage is losing value, because of the growth of zero hours contracts, and the problem women have accessing childcare.”
– Ed Miliband, House of Commons, 5 February 2014
The background
The battle of the sexes is clearly one Labour thinks it can win. It was raised with full force at Prime Ministers’ Questions for the second week in a row.
Last week, they had a go at the Tories over the number of women MPs deserting the party. They said it again yesterday, before moving on to the gender pay gap.
“Can [Mr Cameron] say, why, for the first time in five years, has the gap between men and women’s pay increased?” asked Mr Miliband.
“The fact is there are more women in work in our country than ever before in our history, we’ve seen a tax cut for 12 million women, a pension increase that is benefiting women, [and] tax free childcare that is helping women to go out to work,” Mr Cameron replied.
Mr Miliband came back with: “I’ll tell him why the gender pay gap is increasing. Because the minimum wage is losing value, because of the growth of zero hours contracts, and the problem women have accessing childcare.”
Has Labour hit upon the Tories’ Achilles Heel?
The analysis
We asked Labour what Mr Miliband had based his figures on, and they directed us towards figures from the Office for National Statistics released in December.
According to their latest figures, Mr Miliband is right – the gender pay gap has increased for the first time since 2008.
The gender pay gap – the difference between men and women’s earnings as a percentage of men’s earnings – rose from 9.5 per cent in 2012, to 10 per cent last year.
That was based on average hourly earnings, not including costs such as tax, taken at the middle point (median gross hourly earnings).
But these are based on Pay as You Earn figures, and are based on a one per cent sample of all employees. So, zero hours contract workers, along with the self employed, wouldn’t be included in this calculation of the gender pay gap.
On the minimum wage, he has a point.
Median, or middle point, hourly earnings have risen by 2.2 per cent from April 2012 to April 2013, but over the same year, albeit from October to October, the minimum wage only went up by 1.8 per cent, to £6.19 per hour.
And there are more women than men on the minimum wage. Last year, it was estimated 1.4 million people were on the minimum wage, 60 per cent of whom were women, according to figures from the Low Pay Commission.
Likewise, with childcare, he also has a point. Last spring, 42 per cent of women were in part time work, compared with 12 per cent of men, according to the ONS. Doubtless this is often due to the demands of childcare.
Part time women workers are lagging behind their full-time sisters on pay: figures suggest that hourly earnings for women were just over £8 in April last year; the same figure for full-time women was just over £12.
But, there is another potential reason for the widening of the pay gap, which has as much to do with men as with women.
From about 2003 to 2007 or 8, men’s pay – measured in median hourly earnings – virtually stopped rising, according to the Resolution Foundation. Over that period, women’s continued to rise. Hourly earnings, median, and adjusted for inflation, were £13.33 for men in 2002, at 2013 prices, and rose and fell to £13.66 in 2008. For women, the same figures were £9.74 in 2002, and £10.51 in 2008.
That lessened the gap, until about last year, when men’s wages started to rise again at a faster rate than women’s. This was mainly because of the type of work men are concentrated in – manufacturing and professional employment, which saw faster rises in earnings than services and the care sector, for example, that women work in.
The verdict
Mr Miliband is partly correct in the figures he uses, and in part of his explanation.
The gender pay gap has increased. Part of this is due to more women than men on the minimum wage, and partly because the demands of childcare mean women are concentrated in lower paid part-time work.
But it’s not just about women’s wages getting worse – another reason is that men’s wages have been doing marginally better in recent months, and have risen at a faster rate than women’s.
Mr Miliband also points to zero hours, which don’t actually feature in the statistics he bases his claim on.
Last summer, the Resolution Foundation suggested that the number of men and women on the contracts was fairly even – 53 per cent women, and 47 per cent men, in 2012 – but we don’t know what impact this has had on the gender pay gap.
We asked the Department for Culture, Media and Sport, which is responsible for equality, whether they wanted to say anything new about the figures Mr Miliband quoted.
They didn’t, but did send along something they said two months ago.
Women and Equalities Minister Maria Miller said: “The gender pay gap has narrowed significantly in recent years – 10 years ago it was at 25 per cent – and women’s salaries are rising.
“We are transforming the workplace and there are now record numbers of women in work. Over 140 major UK employers, covering two million people, have signed up to our Think, Act, Report campaign to improve gender equality in their workplace.
“But the cultural shift that is needed won’t happen unless employers work with Government to remove the barriers that hold women back and ensure that every woman can fulfil their full potential.”
