Motherhood penalty means new mums face 33 per cent wage deficit, IFS finds

Motherhood penalty means new mums face 33 per cent wage deficit, IFS finds

In addition to being a source of joy for many, it turns out children can be a major contributor to why women earn less than men.

A study from the Institute of Fiscal Studies found that women’s pay falls significantly behind that of men after they have their first child and this trend for at least 12 years.

The report, funded by the Joseph Rowntree Foundation, showed that on average women in paid work receive about 18 per cent less money per hour than men, and this gap shoots up to 33 per cent after the first child is born. Women who leave work altogether and then return see their pay decrease by an average of two per cent for each year they are out of the labour market.

The “motherhood penalty” has been linked to new mothers working fewer hours and subsequently missing out on promotions and pay rises, while the wages of men and women in full-time jobs pull further and further ahead.

The good news is that this gap has fallen to 18 per cent from 28 per cent in 1993. One of the main drivers causing a fall in the overall gender wage gap has been an increase in the education levels of women relative to men. However, among those that have gone through further and higher education, the pay gap has remained the same as it was in the last ten years, whereas the gap has closed among those with less than A-level education.

“The gap between the hourly pay of higher-educated men and women has not closed at all in the last 20 years,” Robert Joyce, associate director at IFS and an author of the report. “The reduction in the overall gender wage gap has been the result of more women becoming highly educated, and a decline in the wage gap among the lowest-educated.

“Women in jobs involving fewer hours of work have particularly low hourly wages, and this is because of poor pay progression, not because they take an immediate pay cut when switching away from full-time work. Understanding that lack of progression is going to be crucial to making progress in reducing the gender wage gap.”

IFS wage gap

Commenting on the findings, Labour’s shadow women and equalities minister Angela Rayner has called on the government to address the wage discrimination. She said: “It is unacceptable that the wage gap between men and women with A-levels or degrees has remained unchanged over the last 20 years. There is no excuse for this – women deserve equal pay for equal work.

“The report also shows that having a child costs women both in their pay packet and in their chances of being promoted. Mothers should not be penalised for having a family. Employers must act to ensure women who return to the workplace after having children are not facing discrimination in their salary or promotion prospects.

“I expect a Government led by a female Prime Minister to stamp out such wage discrimination. Theresa May will be judged by her actions on tackling discrimination and disadvantage for other women. She cannot condone this and do nothing.”

Melanie Field, executive director of Strategy and Policy at the EHRC said: “This report adds to the wealth of evidence showing that, after over 40 years of legislation banning sex discrimination at work and in pay, women continue to face barriers that hold them back at work. We simply cannot ignore the scale of the disadvantages that working women face.

“Girls and women outperform males at every stage in education, but time after time this success is not translated into rewards in the workplace. Even at the outset of their careers, women are paid less than men,  and this continues through their working lives.  It is unacceptable in modern Britain that three in four working mothers say they experience pregnancy and maternity discrimination each year, with many feeling forced to leave their jobs. Nor is it acceptable that working part-time is poorly paid and takes women off the career ladder.

“Our inquiry into board appointment practices in FTSE 350 companies found that too many relied on personal networks, and ‘chemistry and fit’, selecting people just like the existing role holders, rather than the best person for the job.

“We want government to encourage companies to build a strong pipeline of women for top jobs through a new national target for 50 per cent of all new appointments to senior and executive management level positions in the FTSE 350 to be women, as well as requiring companies to report on pay of part-time workers. We want employers to develop their pipeline of female talent and to ensure their appointment practices are fair and transparent so that they appoint the best person for the job and increase the proportion of women in senior roles.”

You can view the full report here.

 

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