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UK Equal Pay “Come to Jesus” Moment

Updated: Feb 5, 2020

I have been telling colleagues in the US that “the world will stop on April 4.”  They have been chuckling when I tell them why.  But I am quite sure I have not exaggerated the impact of the reporting that has just now finished in the UK.  On April 4, Great Britain became the first country in history that has successfully forced public disclosure of its gender pay gap by organization.

And it’s all hitting the fan now.  A few companies, like BBC, Ladbrokes, Easyjet, and Barclays reported early and their numbers have been all over the press for weeks. There was a particularly intense scandal over the BBC figures, which showed that top male anchors were making quite a lot more than the top female anchors were.

But there are 9,000 companies that fell under the ruling (all organizations, public or private, with 250+ employees), so there were still more than 8,000 shoes that had to drop by the deadline, which was midnight in Britain yesterday.  Public as well as private institutions had to report, airlines and universities, banks and government agencies.  It’s pretty clear organizations who posted today were waiting til the last minute in hopes they wouldn’t be noticed in the crowd. Everyone is expecting to wake up tomorrow morning to more shock from the numbers and more outrage from the women.

Note:  More numbers in the press this morning.  Some are even worse than those companies who reported early.  See the Guardian here

Highlights so far?  Some of the early details by institution:

Overall, the gender gap amounts to £226,000 over a woman’s lifetime, which would pay for a house, even in England, in cash.

Easyjet pays women 52% less than men.  Their excuse is that pilots are paid more and only 6% of their pilots are women, while 60% of their cabin crew is female.  And that fact in itself is not a problem? But they have targeted having 20% of new pilots be female by 2020.  We’ll see.

Ryanair has a 67% gap.  Uses the same Mad Men era excuse as Easyjet.

Virgin Air also reporting a pay gap over 50%.  Same song, third verse.

Barclays was looking pretty bad at 48% until HSBC confessed to a 59% gap. They both gave the “but men are in the top jobs” excuse. Still, even at the middle earning level, Barclays had a 43% gap and HSBC’s was 29%.

Virgin Money has a 32.5% pay gap and they admit they are “not comfortable” with that. I think they will be getting even less comfortable over the coming weeks. They have 35% women in the top slots and 73% women in the lower paid jobs.  Their idea for resolving the problem was that, since women dominate in the low-paying jobs, they should recruit more young men into those.  OMG. I don’t know whether to laugh or scream.

Deloitte, not apologizing for their dismal performance (43% gap), said, “you can’t just magic up a load of senior women and plonk them into our organization.” They explained it’s a ten year process to get women up to speed. OK, so, exactly what have you been doing for the 47 years since the equality laws were enacted? Obviously not working on diversity.

Coast and Phase Eight, fashion retailers, as well as Goldman Sachs and JP Morgan, have pay gaps exceeding 50%.  How does it happen that fashion stores would be more gender-biased than finance houses?

An interesting run of consumer businesses have reported equality:  McDonalds, Costa Coffee, KFC, Starbucks, Primark. The British Museum and the UK armed forces also posted full equality.

Equally astonishing are some of lame excuses that newspapers (like Bloomberg) and businesses have been offering for this now-seen-on-the-screen bigotry. Several hide behind the gender pay gap measure itself, saying it’s too blunt a measure because it doesn’t show data by rank. “Oh,” say several of the worst offenders, “men are paid the same as women, but it’s just that men are in the high-paying posts and women are in the low-paying posts.”


In a one-time WEF study done in 2010, the top 100 employers 30 countries were asked a whole battery of questions about gender in their firms. One question asked was what percentage of each rank were female.  Like all the other countries surveyed, the numbers for Britain showed a steep downward stairstep of female representation, going from entry level jobs to the CEO and Board. A pattern like that, big enough to show in the aggregate, suggests that the reasons being offered for having no women in higher-paying jobs are not special to any one type of company (consulting firms, airlines, etc.) but are more or less consistent across all industries.

I absolutely promise you that if these folks were being made to show their numbers by grade or rank, you would still see gaps at every level.  But there would be a bigger gap for women at the top than for women at the bottom.  How do I know that?  Because that is what other data sources have indicated for a long time—it just isn’t available for individual organizations.  OECD reported in 2011 that the pay gap was widest at the top across all its member countries.

Source: 2017 Report on Equality between Women and Men in the EU. The EU Gender Gap in Earnings is a composite that takes into account the hourly wage, the number of hours worked, and the employment rate. Note that the UK has one of the highest gaps in the EU.

Another reason that the pay gap is larger at the top is that jobs are more likely to be formally graded at lower ranks, because of union involvement, and the pay scales in those situations are transparent.  In the more “professional” jobs, there is a lot of secrecy around pay, as well as negotiation, which gives managers a cover to pay women less.  That’s why studies have shown that women are underpaid by a larger margin when there’s secrecy and where salaries are negotiated rather than transparent. Research has also shown consistently that recruiters and bosses hate it when women ask for more money—and will punish them for it.  That’s why women are better negotiators than men in every other situation except for when they are negotiating for their own pay. They don’t ask because they know what the result will be.

Of course, CEOs are always saying they want to increase their recruitment and retention of females, but I guess they don’t want it enough to actually pay equally.  It turns out that, in fact, employees don’t believe their CEOs anyway, according to 54% of the women in their companies. No one will believe them after this.

There are many ways to calculate gender inequality in pay.  I suspect the British public will hear a lot pompous nonsense in the coming weeks about the gender gap measure not being a good one and how when you measure it right, the gender gap in pay goes away.   First, just let me say one thing:  this pay disclosure was required by the Equality Act of 2010, but it has been sitting on the table, largely because businesses complained it was too much of a burden (and government cares more about kissing up to business than about protecting the legal rights of half their citizens).  If the government had asked them to provide more granular data or a more sophisticated calculation, you can bank on it there would have been a bloodbath.  Indeed, this “blunt” figure may well have been a compromise. (Bloomberg’s mansplaining on this was so disingenuous it was embarrassing. Even the title was insulting, “Why Women (Appear to) Earn Less Than Men in the UK.” )

Since I dabble in these numbers a lot, let me say a few words that may be helpful in the coming days.  Y