Hourly pay rates

The salient points about pay are as follows,

  • For full time workers, the median hourly pay rate (excluding overtime) received by women under 35 years of age exceeds that of men;
  • This pay rate advantage of young women over young men is increasing and likely to continue to increase for years or decades to come;
  • For part time workers, the median hourly pay rate received by women of any age exceeds that of men;
  • For full time workers, the median hourly pay rate of men averaged over all ages exceeds that of women;
  •  This pay rate advantage of older men over older women is decreasing and likely to continue to decrease for years to come, perhaps ultimately reversing.

These statements are justified with sources below.

The reader is cautioned to take care with all sources of pay data to distinguish between hourly pay rate (and whether it includes or excludes overtime, bonuses, etc) and earnings. Clearly A will earn more than B if A works more hours than B, if they receive the same hourly pay. Earnings are therefore not a basis for consideration of fairness in reward. Men work far more hours than women (see Working hours) so it is only to be expected that they earn more.

The reasons for higher male earnings have been laid out clearly in Warren Farrell’s book Why Men Earn More and in the videos by Christina Hoff Sommers and Warren Farrell, or see any number of sources, e.g., here or here . In brief, the main reason is that in addition to working more hours they also work more continuous full time years, without career breaks. The underlying reason behind men’s greater working hours and working years is that women, past a certain age, prioritise domestic and childcare matters, whilst men increasingly prioritise earnings in pursuance of the same objective – support of the family. Men’s prioritising of earnings comes at a cost, namely reduced work-life balance. Thus, if faced with an option to increase his pay by taking on a job which is unpleasant, laborious, or dangerous, or involves long commutes or working away from home, men are far more likely to take up the option than women. Men are also more likely to put in overtime when they would prefer not to, in order to enhance promotion prospects. It all comes down to the degree of work-centredness, which Catherine Hakim has observed is far stronger in men.

Hourly Pay Rates

However, we can cut through all that. The most informative graphic is the median hourly pay rate, excluding overtime, for full time workers against age and gender. Figure 1 is exactly that, taken from the ONS “annual survey of hours and earnings 2013”. [The pay gap is defined as (m – w) / m as a percentage]. Figure 2 is the corresponding histogram for 2014. Both are available here. The salient fact is that there is virtually no gender pay gap for people in their twenties and thirties.

Figure 1: From ONS Annual Survey of Hours and Earnings (2013) click to enlarge

Gender pay gap by age 2013

Figure 2: From ONS Annual Survey of Hours and Earnings (2014)

Gender pay gap by age 2014

The 2015 ONS Annual Survey of Hours and Earnings does not include the corresponding histogram. However, there is an even better graphic in the subsidiary analysis reported in Analysis of factors affecting earnings using Annual Survey of Hours and Earnings: 2015. It is reproduced below as Figure 3. [Unlike Figures 1 and 2, this pay gap is defined as (m – w) / w as a percentage].

Figure 3: From ONS “Analysis of Factors Affecting Earnings using Annual Survey of Hours and Earnings: 2015″ (Click to enlarge)

Gender pay gap by age 2015

For the first time we see clearly that women below the age of about 35, working full time, have a higher median hourly pay rate than men of the same age. The histograms of Figures 1 and 2 for 2013 and 2014 indicated only a very slightly greater median pay for women in their twenties, of a percent or so. But Figure 3 indicates clearly for the first time, in 2015, a marked advantage for young women. The median hourly pay rate for women in their twenties working full time is around 8% higher than that for men (average over ages 21-29).

Although I have not presented evidence to conclusively demonstrate this, there are obvious reasons for what Figure 3 reveals, summarised thus,

  1. Young women are being paid more than men because they are better educated on average (see Education);
  2. Older men are being paid more than women because they have, by then, put in more continuous years of work, and worked more hours per year, than women of the same age.

ONS data shows that the longer a person stays in a given job, the higher the hourly pay rate becomes, see Figure 4. So point 2, above, naturally leads to improving men’s pay. Over all ages, point 2 wins over point 1 – but only just, and only for now.

Much has been said about men’s greater earnings being due to their tendency to enter better paid professions. We can see now, without the need for detailed analysis, that this is untrue. By age 35, most graduates will have been working for more than 10 years. The effect of their chosen profession will be evident in hourly pay data prior to age 35. But it is women who attract the higher hourly pay rate below the age of 35. So, whilst it may be true that some, educationally successful, men enter particularly well paid professions, this is not evident in the median. There must be sufficient numbers of other men doing less well than women to bring the median down.

Figure 3 also reveals an alternative quantification of the gender hourly pay gap, namely 4.6% based on median pay and median age. Men are in their forties before they realise this advantage, after perhaps 20 years or more of full time work.

Figure 4: Effect of Years-in-Job on Hourly Pay Rate

Job tenure effect on hourly pay rate

Greater male earnings are presented in the media as male privilege. But it is clear that the greater earnings men eventually achieve is actually due to decades of effort. This is not to suggest that women are putting in any less effort – but less of their effort is directed towards paid employment. In contrast, the earnings advantage enjoyed by young women is (probably) due to their superior educational attainment compared to men. There are reasons to believe that the educational disadvantage to boys and young men is systemic (e.g., see here and here and here and here and here and here and here). Consequently, the higher hourly earnings of women under 35 could more reasonably be regarded as female privilege.

If this hypothesis is correct – that young women’s better median pay is due to their better education – then it is certain to become more marked over the next decade or so, because male educational under-performance continues to be evident from primary schooling onwards. Indeed, there is currently no sign of this downward trend in male educational achievement abating.

The actual median hourly pay rates for full time workers of all ages can be obtained from the ONS report “Patterns of Pay: Results from the Annual Survey of Hours and Earnings, 1997 to 2012“. These are plotted against year in Figure 5. Figure 6 shows the same data converted to real terms using 2015 £ (conversion using CPI).

Figure 5: Full time hourly pay rates across all ages

FT hourly pay rate

Figure 6: Full time hourly pay rates across all ages (real terms)

FT hourly pay rate in real terms

Women part time workers of all ages are paid more per hour than men

The median gender pay gap across all ages is shown against year, from 1997 to 2015, in Figure 7 for both full time and part time workers (taken from the 2015 ONS Annual Survey of Hours and Earnings). For full time workers it has reduced from 17.4% to 9.6% over this period. The 9.6% figure based on average pay compares with the figure of 4.6% from Figure 3 based on median age. Take your pick.

For part time workers, women have earned more per hour than men for the last 18 years. The part time working gender pay gap in favour of women now stands at 7%.

NB: Part-time work is defined as employees working not more than 30 paid hours per week (or less than 25 hours for the teaching professions).

The uppermost line on Figure 7 is meaningless. Ostensibly it applies to “all workers”, i.e., both full time and part time. But since the gender pay gaps for full time and part time working in 2015 were 9.6% and -7% respectively, it is clearly bonkers to suppose that a figure of nearly 20% applies for all workers. What this uppermost data actually reflects is the fact that the hourly rate for full time workers (of both sexes) considerably exceeds the hourly rate for part time workers (of both sexes). Because far more women work part time, averaging over all workers inevitably makes the (apparent) gender pay gap look to be large and in men’s favour. But the uppermost line in Figure 7 really just reflects the premium anyone (of either sex) gets for working full time. It is not a gender pay gap for equivalent working at all. It is statistical legerdemain. I’m surprised the ONS thought it appropriate to include it.

Figure 7: Gender pay gap over all ages showing the reducing full time pay gap and the increasing part time pay gap in favour of women (click to enlarge)

gender pay gap v year FT and PT

Is there a gender pay gap net of income tax?

Men pay 72% of the income tax received by the exchequer. So, is there a pay gap in favour of men after tax? In Pay in Wales it is argued that there is not.

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