U.K. Gen Z women probably won’t close the gender pay gap before they retire


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As companies and governments have made progress in recent decades to close the gender pay gap, young female entrants to the workforce might have felt safe in the assumption that the glass ceiling had been smashed.

But even for Gen Z women, who are set to benefit from the trailblazing generations before them, equality is still likely to be beyond reach.

A new report by PwC has revealed the decades-long battle women will continue to face in closing the gaping gender pay gap, suggesting no woman currently in the labor force will ever work in a completely equal economy.

That’s because even though they are likely to begin their careers on an equal footing to men, stubborn labor market characteristics mean the overall gap in pay won’t have closed by the time they hit retirement age.

The gender pay gap dipped in the U.K. last year, falling from 12.2% to 11.8%. Three out of every five companies reported a reduction in average difference between men’s and women’s salaries in the last year.

The financial services sector, where the pay gap has historically been among the worst, saw the biggest reduction.

However, the fall in the headline figure represents a more modest decline than in previous years, confirming a troubling, wider trend: the gender pay gap is closing, but more and more slowly.

PwC reports the pay gap has shrunk by just 1.7% since 2017, the year pay gap reporting became mandatory in the U.K. for companies with more than 250 employees. 

That slow rate of decline suggests it will take upwards of 45 years to completely eliminate gender pay differences, meaning parity could remain out of sight into the 2070s.

For Gen Z women starting their first graduate jobs, the findings serve as a stark reminder of the unequal footing that every generation before them has faced in the world of work.

“Gender pay parity therefore remains out of sight for a 21-year-old woman entering the workforce today and the analysis suggests it will take over 45 years to close the gender pay gap in the U.K.,” the authors wrote.

The pay gap has still closed significantly in recent decades, owing to women staying in education longer and accordingly picking up positions in higher-paying fields. 

A gradual increase in the age at which the typical woman has her first child has also led to more parity for women in their 20s and 30s. 

However, there are several reasons why it persists even as traditional gender roles change and more overt discrimination is stamped out. 

Women in the workforce continue to pay a “motherhood penalty” when they decide to have a child, often leaving the workforce for several months or years while their male colleagues typically continue to gain experience and climb through the ranks. 

This can persevere after maternity leave ends, with women doing more unpaid work or cutting their hours to cope with childcare requirements compared with men. 

Some companies, including Spotify, have tried to level the playing field by offering equal parental leave to mothers and fathers.

“Whilst the gender pay gap continues to move in the right direction, the data once again highlights that organizations are facing difficulties in meaningfully reducing reporting figures,” said Katy Bennett, diversity, inclusion, and equity consulting director at PwC.

“Societal barriers play a strong part but there are still things businesses can do to drive change and so it is critical for organizations to truly understand gender pay gap drivers and take targeted actions to address them.”



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