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Will coronavirus widen the pay divide?

20 Nov 2020 By Tracey Marsden and Catriona Aldridge

Previous crises have hit women’s earning power more than men’s, say Tracey Marsden and Catriona Aldridge. There are signs that Covid might do the same

The financial crisis and recession of 2008/2009 contributed to an increase in the gender pay gap in 2013 – the first such rise for five years. One of the main reasons for this was the nature of the new jobs being created after the crash. Many were part-time or temporary and many women moved into these types of jobs. 

In 2020 in the midst of another crisis, the Covid-19 pandemic, we are seeing a similar trend. The TUC is reporting that one in six working mothers – mostly in low-paid jobs – say they have had no choice but to reduce their working hours.

The ‘motherhood penalty’ is a well-recognised contributor to the gender pay gap. After having children many women move to part-time jobs, often lower paid and with less chance of promotion. Mothers also move to lower skilled jobs that fit around their childcare. This has a direct impact on their pay.

The situation has become significantly more acute as a result of lockdown. More than six months in, the childcare issue is still not resolved. According to a survey for the TUC in September 2020, two in five working mothers with children under 10 years old  were struggling to find the childcare they needed, as breakfast and after-school clubs remain closed and care from friends and family was perforce limited. If women follow the age-old trend and leave the workforce and move to lower paid roles as a result, the gender pay gap will inevitably widen.

Even for those women not affected by childcare issues, the current job market is precarious. In contrast to 2008 when male-dominated sectors were hit hardest by job losses, this time round it is female dominated sectors such as hospitality, retail, tourism, and catering that are bearing the brunt. In May, PwC found that 78 per cent of those who had lost their jobs since the coronavirus crisis began were women.

There is also the furlough factor. We have yet to see the full effects of the end of the government’s job retention scheme (recently extended until March 2021) but if, as suspected, its eventual withdrawal leads to high numbers of redundancies, then women are likely to be among the most severely hit. HMRC reported in August that for the period to end June 2020, young women were most likely to be furloughed. 

We expect these factors will combine to cause long-term earning damage for the female workforce. In addition, when employees are fighting simply to keep their jobs, it becomes harder to challenge pay. 

An opportunity for the taking?

The gender pay gap is not something that should be left to fate, and the huge impact of Covid-19 also presents a real opportunity for employers to remodel workforces and working practices. The hope is that increased home and flexible working, with a focus on productivity not presenteeism, will be a chance to break down the belief that key or senior roles need to be full-time and on site.  

The pandemic also has the potential to unlock the societal barriers that prevent girls studying STEM subjects at school and entering professions such as engineering, science, and technology. 

During lockdown we have seen a rise in the profile of scientists and IT professionals. Engineering UK reported that 12 per cent of women surveyed stated that the pandemic made them more likely to want to work in engineering. Expanding female representation in STEM professions will inevitably be a slow burn and unlikely to have any significant impact on gender pay gap results in 2022 but could prove to be a longer-term positive outcome of the pandemic.

With so much changing so quickly at present, gender pay gap reporting in April 2021 also still seems a long way off, but improving the gender pay gap has always been a long-term game. The key is to make sure organisations do not go backwards, and that the gender pay gap and indeed other diversity issues remain high on board agendas. 

Tracey Marsden is a partner and Catriona Aldridge a senior associate at CMS

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