But Resolution Foundation says women will still earn significantly less during their careers as the gap widens after age 30
Women in their 20s have seen the pay gap halve to 5%, but just as in previous generations the discrepancy compared with men’s earnings widens when they hit 30 and start a family.
In a report highlighting the challenge facing Theresa May in closing the pay gap, the Resolution Foundation said women entering work now would still earn significantly less than their male counterparts over their careers, despite an improvement in pay differentials during the first decade of employment.
The thinktank compared the typical hourly pay of different generations of men and women over the course of their careers.
It found that, for workers in their 20s, the pay gap was 16% among baby boomers – born between 1946 and 1965 – 9% among people born between 1966 and 1980, and 5% among those born between 1981 and 2000, referred to as millennials.
“It shows that the gender pay gap has closed for every subsequent generation of women,” the thinktank said. “This reflects positive trends, including rising higher educational participation which women in particular have benefited from, and more women breaking into high-paying industries and occupations.”
However, a sharp rise in the pay gap after the age of 30, seen in previous generations, puts millennial women on course to face a deficit of almost 30% by the time they are in their mid-40sunless there is further government intervention, the report says.
From 2018, companies with more than 250 employees will have to disclosehow much they are paying in salaries and bonuses to their male and female staff.
In her first statement as prime minister, May underlined the gulf between men’s and women’s earnings and promised to create a “Britain that works for everyone”. Her predecessor, David Cameron, had vowed to “end the gender pay gap in a generation”.
Last year a report by the Institute for Fiscal Studies (IFS) said the pay gap widened consistently over the 12 years after a first child was born to leave women earning 33% less per hour than men.
A report last year by the women and equalities select committee concluded that responsibility for childcare and the concentration of women in low-paid sectors were key causes of the pay differential.
Labour’s spokesperson for women and equalities, Sarah Champion, said: “It is encouraging to see the pay gap closing while people are in their 20s, but it is also clear that this Tory government is failing to address its underlying long-term causes.
“Many women are still trapped in chronically low-paid, low-progression sectors of the economy, while the cost of childcare has soared under the Tories. Thousands of new mothers are forced out of their jobs each year due to maternity discrimination, and the vast majority of tax and benefit changes have fallen on the shoulders of women.”
Laura Gardiner, who wrote the Resolution report, said: “It’s important to not overlook the positives. The rate of progress between generations is really welcome, particularly with Generation X. Even in the child-rearing years there’s still really big gains.”
But she said there were many issues related to working part-time, such as missing out on informal chats in the pub, that needed to be tackled. “I wouldn’t want to play down the policy success we’ve had, but the area where there’s probably the most we could do is around the part-time penalties, and the opportunities for promotion and progression, the cultural stuff,” Gardiner said.
A government spokeswoman said that from September working parents of three- and four-year-olds will be given 30 hours of free childcare, double the current allowance, to help more women return to near full-time work.
She said the new regulations introducing mandatory reporting of gender pay gaps and bonuses was waiting for parliamentary approval, but were still due to come into force by April this year.
“The gender pay gap is at a record low but we have to push further to eliminate it completely – shining a light on organisations’ pay gaps means employers can take action to tackle the causes and drive change,” she added.
“That’s why we are introducing requirements for all large employers to publish their gender pay and bonus gaps data from April this year.”
Written by Phillip Inman and Peter Walker, featured in The Guardian – https://www.theguardian.com/society/2017/jan/04/gender-pay-gap-down-to-5-among-uk-workers-in-their-20s-study-finds