The problem is that, beyond words, there is relatively little that governments can do. Social benefits can be increased at the margin for some of the victims, but sharply increased public expenditure is not a long-term solution for ageing societies with rising unemployment. Taxes could be increased for shareholders, company owners and the senior executives who are profiting from globalization, but globalization has simply made entrepreneurs and their capital more mobile – and they can be expected to move to the areas of lower taxation if one area were to raise their taxes.
We might expect the calls for trade tariffs and protectionism to intensify and become more widespread. And expect a range of social concerns to be raised – should we be trading with countries that allow child labour and have inadequate workplace safety regulations? While such social differences between the developed and developing world remain, labour costs in the West are always going to be higher than elsewhere.
Underpaid Women
‘Scandal of women who earn 25% less than men’ Evening Standard
The evidence appears to be compelling. A headline such as ‘Scant progress on closing gap in women’s pay’ vividly sets the tone, and one American lobby group has claimed that ‘The typical female college graduate in 1984, who is now in her mid-forties, has lost a total of $440,743 in the years between 1984 and 2004’ due to the gender pay gap. But are working women unfairly paid less than men?1
Despite the strident nature of these headlines, the figures suggesting that women earn significantly less than men are not all they might seem at first glance. There are a range of statistical issues to consider. First, there is the difference between median earnings (half the people earn more than this and half earn less) and mean, or average, earnings, with the gap based on median earnings invariably being smaller than that based on mean earnings. In Britain, for example, the gap shrinks from 17 to 13 per cent when switching to median hourly earnings, as the figures remove the impact of the very high earners, who tend to be disproportionately male. The median figure is preferred by most analysts as it gives a better indication of the situation for a typical person – lobby groups use the average as it gives a larger figure.
Second, women’s total weekly earnings, measured in pounds or dollars, will be below the level achieved by their male counterparts as full-time men tend to work longer hours than full-time women. Third, the impact of part-time workers on the pay gap can be significant as part-time women are disproportionately represented in jobs where the pay is around two-thirds that of part-time men for every hour worked.
The gender pay gap also widens as any given cohort of men and women grows older. For school leavers the gap is negligible but it rises steadily up to the age of about forty. This is partly because as women get older they are more likely to have spent time out of the labour market caring for children or elderly dependants. There is some evidence that the gap between male and female earnings declines again during people’s forties and fifties due probably to the pay of very high-earning men slipping back.2
Despite the complexity of the measurement issues, the gender pay gap figures are often presented as if the gap is due purely to ‘discrimination’ against women. The equal pay web pages of a major British trade union start:
We are campaigning to end discrimination against our women members. Workers should be paid fairly regardless of age, gender, sexual orientation, ethnic or national origin, creed or disability. The 2006 annual earnings survey shows that the mean full-time hourly gender pay gap is 17% with no change over the last 12 months.3
On closer analysis, it becomes clear that only a small percentage of this gap arises out of what might reasonably be called discrimination.
Pay discrimination occurs when a man and a woman, who have similar qualifications and are doing similar jobs, are paid different rates. Because the pay gap as measured by statisticians is an aggregate concept, not matching person against person, there are lots of reasons other than what most people would see as discrimination that could explain, and justify, its existence. Most notable among these explanations are differences in the pattern of male and female employment (in other words, they do different sorts of jobs), previous employment histories, childcare responsibilities and levels of qualifications.
It remains the case that many women during their twenties and thirties will take some time out from work to have children, and recent legal cases have supported the common-sense argument that a forty-year-old man with a full employment record with the corresponding experience can expect, other things being equal, to be paid more than his female counterpart who has taken a long period out to have children.
Each generation of women has done better on pay relative to men than the previous generation, but it is true that the pace of improvement has slowed in the last decade or more. One possible explanation for the stabilization of the pay gap could be that discrimination, as defined in the wider world away from lobby groups, no longer exists. Fifty years ago, British employers sometimes operated a marriage bar preventing women from working once they were married. And before the 1970 Equal Pay Act, it was routine for collective agreements to have women’s pay rates below those of men. Probably, the gap now between men’s and women’s pay largely, if not totally, reflects factors other than discrimination.
In the absence of any figures from governments that highlight pure discrimination, a number of academics and lobby groups have conducted research attempting to analyse the relative importance of the various factors contributing to the causes of the gender pay gap. Even so, it is difficult to come up with a definitive breakdown. The Equal Opportunities Commission in Britain published research that identified four main causes of the pay gap: discrimination, education, labour-market rigidities and working patterns. They believe that discrimination, which includes what they call ‘systematic disadvantage’, in other words, the work women choose to do being paid less than the work men choose to do, accounts for just over one-third of the pay gap. Another third was due to different lifetime working patterns, in other words, the tendency to work part-time and to look after children, and about one-tenth was due to women spending less time in education.4
Identifying and measuring these reasons is very difficult, and such studies are controversial. One American (female) researcher concluded that ‘There is no proof that discrimination is the cause of the remaining pay gap. It is possible that the average man, brought up to view himself the main breadwinner, is more committed to his job than the average woman.’5
A survey of equal pay reviews in the UK commissioned by the Equal Opportunities Commission concluded that among employers that have conducted an equal pay review, just 5 per cent said that they had actually discovered any such pay gaps. Many of these gaps were modest – most were reported to be less than £1,000 annually.6 Perhaps surprisingly, public-sector employers were more likely to have a gender pay gap than their private-sector counterparts.
Another piece of research suggested that a significant part of the difference might be accounted for by the fact that women ‘are too scared to ask for a pay rise’.7 The survey said that two-thirds of women had never put in a request for more money even though 80 per cent believe they are underpaid. Men, in contrast, were generally much pushier when asking for money. This specific example would support the view that there are systematic differences in personality – essentially that many women are less competitive than many men, tend to be less self-confident, less motivated by money and less effective in negotiation – which contribute to the choices made in life that can lead to the existence of the pay gap. One survey suggested that four in ten women aimed to be financially dependent on their partner, relying on his income, savings and pensions to be secure in the future.8
Some of the differences between the sexes are visible long before the young people have entered the workplace. At A-level, the exam for eighteen-year-old school leavers in Britain, three times as many boys as girls sit physics while twice as many girls sit the exam in English litera
ture. When it comes to apprenticeships, there are fifty boys for every girl in the construction sector and 250 for every girl in the electro-technical sector.
At university, men outnumber women by five to one in computer science and engineering courses, while women outnumber men by at least two to one in education, languages and subjects allied to medicine (excluding medicine itself and dentistry). There are very few occupations that have roughly equal numbers of men and women. Men dominate in computing, the police and sales and marketing, while women dominate in office support staff, primary-level teachers, care assistants and hairdressers. It is impossible to know whether the pay in the jobs dominated by women is lower on average because women dominate.
The pay gap in America has, however, been narrowing, but arguably not for the reasons anticipated or hoped for. The blue-collar and manufacturing jobs where men dominate have seen considerable downward wage pressure for more than a decade, while women, who are more prevalent in service-sector jobs such as healthcare, have seen wage rises, albeit from lower levels. One article, ‘Rise of the women who earn more than their men’,9 told us that almost 40 per cent of women who work full-time are paid more than their husband or live-in boyfriend, hinting at progress being made by women in plugging the remaining gap.
But those who lobby to close the gender pay gap argue that new policies, such as compulsory pay audits for all organizations and legislation to tackle the culture of long working hours, which tends to discriminate against women, are required.10 They argue that it is important ‘to challenge the myth that gender equality has now been won and… [believe] – that continuing gaps are the result not of free choices made by women and men but of an unequal society’.11
If, though, the blatant forms of discrimination are no longer contributing much to the gender pay gap, sensible policy initiatives to close it are hard to find. Britain’s Women and Work Commission published its ‘Shaping a fairer future’ report in 2006 and concluded that women are not making full use of their skills and that the primary cause is the culture of schools and workplaces.12 Policies such as reducing gender stereotyping in schools and encouraging women to study male-dominated subjects, and making more senior jobs available to those who want to work part-time, are worthy initiatives but hard to implement. Their success is hard to measure.
Perhaps the biggest culture change required to close the gap is not in the attitudes and aspirations of women but in those of men. Perhaps a society with more male home-makers would be more appealing than one with more female lorry drivers. Meanwhile the stage looks set to remain clear for the chauvinist comedian who believes in equal pay. He must be a believer in fair pay, he says, because he lets his female staff work longer hours so that they can earn the same as his male employees!
It’s All Too Much
‘The age of rage’ Sunday Times
‘It is a profound privilege to die from stress-related diseases,’ says a professor from Stanford University. The point he makes, of course, is that in developed countries we have never had it so good, and that worrying about stress is itself a sign of how charmed our lives are. As a society we have wealth, job choice and travel opportunities unimaginable only a generation ago, and in our free time we can gamble, drink, surf the internet and watch television on super-sized plasma screens to our heart’s content. We have legal safeguards against many of society’s ills, and the hard toil and infectious diseases that filled the Victorian graveyards with youthful corpses have all but gone. And yet it seems we are as miserable as sin and bogged down with stress.
Stress is, apparently, a serious problem, at an all-time high, killing us or costing us a fortune and putting companies out of business. There seems to be no corner of society, no group of people, that avoids being afflicted. One survey from BUPA, the private health company, suggested that around 7 million British people, equivalent to one in four of the working population, have been so anxious that they have been to the doctor for medication. One-third of the worriers said that they were losing sleep, a quarter said they were getting annoyed with others, becoming withdrawn or being driven to alcohol or overeating.1 Another survey suggested that 9 million working Brits, one in three, have taken time off work because of stress. Nearly 4 million workers claim to be very stressed in an average week.2
There have been many other surveys on the topic of stress, giving the impression that almost every trade union or professional association has consulted its members on the topic. In addition, a good number of tables purporting to rank jobs according to their stress level have been produced and are a favourite for the media.
We learn that 38 per cent of men are unhappy at work and that 27 per cent of managers in the construction industry have sought medical help for stress, anxiety or depression.3 A survey conducted by the National Union of Teachers found that work-related stress is the main health and safety concern for four out of five schools, with 40 per cent of teachers reporting high levels of stress.4 The report said that high stress levels could be as damaging as ageing thirty years or becoming obese. Another survey of teachers in England said that stress was responsible for one-third, over 200,000 days, of teachers’ sick leave in the latest year, up by 11 per cent in the past five years, costing schools £19 million.5
Business leaders in Sweden should spare a thought for their counterparts in Taiwan. Apparently only one-quarter of the former believe that stress levels are increasing, compared to 90 per cent of those in Taiwan. Stress levels were broadly related to the amount of holiday that they had – in Thailand, Taiwan and Malaysia it is typical to have fewer than ten days each year compared to over twenty in Europe – and also reflected the pace of economic change.
Call centres, where huge teams of people handle a seemingly never-ending flow of customer calls, have been described as the twenty-first-century sweatshops. With their workers referred to as battery hens and galley slaves, they are a frequent source of scare stories in the press. The call centres, which have mushroomed in the last decade with the shift towards the twenty-four-hour society demanding banking and other services at any hour of night or day, now employ approaching 1 million people in the UK, nearly one in thirty. Managers have threatened staff with wearing disposable nappies if they visit the toilets too often, and one worker was disciplined for taking two six-second breaks between calls. Despite such stories, studies suggest that stress is no higher for call-centre workers than others, and clearly some employers go to considerable lengths to look after their staff.6
But all these figures need to be taken with a large pinch of salt. Surveys can, of course, mislead, and statistics can lie, especially in an area as fluffy as stress, where the nature of the survey and the wording of the questions can heavily influence the results obtained. One particular problem is that virtually all the surveys are based on self-evaluation, making it very difficult to compare between groups of workers or between surveys. If teachers appear top of the stressed professions, for example, does that mean that their jobs are more stressful or just that they are more sensitive to stress? Or was the question in that survey different, prompting the higher positive response? It is also quite possible that certain personality types may be attracted to, or carefully avoid, the higher-stress/lower-stress occupations. Nonetheless, the responses to the surveys and the trends suggest that something is going on and to a sufficient extent to affect the broader economy.
One study by Sweden’s Karolinska Institute, the university charged with giving out the medical Nobel prize, estimated that depression gave a reduced quality of life for 21 million people around Europe. As it costs the economy roughly 1 per cent of national income, over €100 billion a year, it is one of the largest health-related economic problems in Europe and has implications for the redirecting of healthcare resources.7 A study by Britain’s Health and Safety Executive, the government body responsible for health and safety regulation, suggested that about half a million workers suffered from work-related stress in the latest year, the largest category after backache.8
Stress clearly disrupts the lives of some people who seek medical or psychological help. There is also evidence that some types of stress can be related to the development of coronary heart disease and the occurrence of heart attacks. The National Heart Foundation of Australia has, for example, concluded that there is ‘strong and consistent evidence of an independent causal association between depression, social isolation and lack of quality social support and the causes of coronary heart disease’, adding that the increased risk contributed by such factors is of similar order to that contributed by smoking or hypertension. It found no consistent evidence, however, for a similar association between other types of stress – acute and chronic life events, work-related stress and so-called Type A behaviour or hostility.9
One extraordinary study showed that heart attacks rise on the days of important football matches. A British study found that there was a 25 per cent increase in heart-related hospital admissions on the day that England lost a World Cup match on penalties to Argentina in 1998. And to suggest that it is not the losing that matters, a French study revealed an increase in heart attacks in France in the days following their victory in the final of the same tournament.10 Stress can also, it seems, lead to premature ageing and shrink the areas of the brain that control memory, attention and the ability to make decisions.
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