Cost-of-living crisis | Rising inflation may widen the UK's gender pay gap

Rising inflation may widen the UK's gender pay gap

Soaring inflation may be contributing to the gender pay gap, a new study by study by HR and payroll software provider CIPHR has suggested. Their data, which was based on a poll of over 1,000 employees, found that women were 8% less likely than men to have been offered a pay rise that was in line with inflation.

Driven by the rising cost of global energy, and exacerbated by supply chain issues plus goods and labour shortages caused by Brexit, the pandemic, and now the Ukraine war, inflation is currently around 6% and predicted to reach a 40-year high of over 8.7% in the final three months of 2022.

What this means is that employers who were previously offering a pay rise in line with inflation, which stood at around 3% last summer, are in effect offering a pay cut, as the prices of goods and services are rising much more sharply than wage growth. The Bank of England hopes to get inflation back to its target of 2% within two years, but in the meantime, workers are experiencing the sharpest squeeze on their pay packets in over 30 years.

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New analysis from thinktank the Resolution Foundation suggests that 1.3 million people – including 500,000 children – will be pushed into poverty over the next few months. The Resolution Foundation’s Chief Executive Thorsten Bell, told the BBC’s Today programme: “"It means we’re all getting worse off, and at the bottom end you’re having to cut essentials because you don’t have lots of luxury spending to go in the first place. I think that is really serious."

And women will be worse affected than men by the disconnect between soaring prices and struggling wage growth; the CIPHR research found that not only did a greater proportion of women than men report getting a lower pay rise, but of the women who had received a pay rise to date, two-fifths (40%) said it was below inflation. Just a third (32%) of the men who received a pay rise said the same.

Gender inequality

Indeed, looking at the data of the 5,062 employers who have published their gender pay gap figures for the 2021-22 reporting year so far (by 3pm on 28 March 2022), the CIPHR researchers found that over three-quarters (77%) of organisations pay their male employees more than their female employees. Only one in seven (13.4%) pay women more, and only one in 10 organisations (9.6%) reports having no pay gap.

The average median hourly pay gap between what men get paid and what women get paid, upon which these calculations are based, is a shocking 11.9%.

Perhaps even more shockingly, the CIPHR researchers uncovered more evidence of gender inequality in their research. Not only are women routinely paid significantly less than men, but they’re not offered the same access to flexible working. When asked whether they had been offered a flexible working location by their employer, only a third (34%) of women said yes compared to over two-fifths (42%) of men. Less than a third (29%) of the women surveyed work mostly from home, while over a third (37%) of men do. However, women - who still do the vast majority of unpaid domestic labour in the UK, according to a recent study by UCL - typically have a greater need for flexible working than men.

According to the findings, women are statistically less likely than men to be offered any of the following by their employer: a four-day work week (offered to 13% of women and 23% of men); entitlement to set their own hours and working schedule (offered to 21% of women and 29% of men); entitlement to work remotely from abroad on a temporary or permanent basis (offered to 9% of women and 25% of men); and unlimited paid holidays (offered to 7% of women and 16% of men).

It is very clear from this that gender inequality is alive and kicking in the UK workplace. And, as prices continue to soar, and wages struggle to keep up, it is women who will be bearing the brunt of the cost-of-living crisis.

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