Why Pay Equality Is Still Out Of Reach

New numbers from the U.K. shed light on a global problem.

- J llian Goodmani

There’s an essential, frustrating truth about the gender pay gap: You can size it up or down depending on what you’d like to measure—and what you’d like to measure depends on what you think the pay gap is. Are you talking about all women across the economy? In a specific industry? A specific company? In certain jobs? “You can whittle the pay gap down when you control for more and more variables,” says Henry Farber, an economics professor at Princeton University. “But you can never make it go away.”

This year, Britain is forcing companies to report their pay gaps as they actually exist, no whittling allowed. By April 4, all businesses with at least 250 employees working in the U.K. will have to disclose any discrepancies in pay between their male and female workers. Ultimately about 9,000 companies representing 15 million employees will be forced to report, although only about two-thirds had done so by March 28. Those that don’t will be subject to unspecified fines and sanctions by the government’s Equalities and Human Rights Commission.

The law—enacted in 2017, after a 2010 measure encouraging voluntary reports failed—is very clear about just what numbers British companies must report: unadjusted mean and median hourly wage and bonus pay for all men and all women, as well as percentages of men and women in each pay quartile. The rigid approach leaves companies nowhere to hide, no statistical mechanism to cover up their failure to mentor women, no rhetorical way around the fact that their higher-paid divisions are largely male. While the requirement is confined to companies’ U.K. workforces, the numbers provide an insight into the structure of companies around the world. “The picture in the U.K. isn’t that much different from the U.S.,” says Farber. “Women earn less than men.”