The Pay Divide: Understanding the Gender Pay Gap

Decades after equal pay became law, men in the country still earn more than women on average, a difference known as the gender pay gap. While the gap has been narrowing, including in the North East, progress has been slow, and understanding what the gap is, and what lies behind it, is the first step to closing it.

What the Gap Is.

The gender pay gap measures the difference between the average earnings of men and women across the workforce as a whole. It is important to understand that this is not the same as unequal pay for the same job, which is illegal, but a measure of the difference in average earnings across all jobs.

The gap reflects the fact that men and women tend to work in different jobs and at different levels, with men more likely to be in higher-paid roles and senior positions. Understanding this distinction is key to understanding the gap.

A Slow Narrowing.

Across the country, the gender pay gap has been narrowing, but progress has been gradual. The gap for all workers remains significant, and at the current rate of progress it is estimated that it would take decades to close entirely.

This slow pace of progress has been a source of frustration, given how long the issue has been recognised. Accelerating the closing of the gap remains a significant challenge.

The Regional Picture.

The size of the gender pay gap varies considerably across the country. It tends to be largest in London and the South East, partly because these areas have more of the very highest-paid jobs, where the gap is widest.

The North East's gap has been narrowing, and the region has been recognised as among the most improved, with better participation by women in the workforce and a narrowing of the gap. Yet across the region, men still earn more than women on average in every part.

What Lies Behind the Gap.

A number of factors lie behind the gender pay gap. One is that women are more likely to work in lower-paid sectors and roles, and are under-represented in the highest-paid jobs and senior positions, a pattern sometimes called occupational segregation.

Another factor is that women are more likely to work part-time or to take career breaks, often because of caring responsibilities, which can affect their pay and progression. These structural factors, rather than unequal pay for the same job, are the main drivers of the gap.

The Role of Reporting.

In an effort to tackle the gap, larger employers are required to publish data on the gender pay gap within their organisations each year. The aim is to bring transparency to the issue, encouraging employers to examine and address the gaps within their own workforces.

The data has highlighted the scale of the challenge, with the great majority of larger employers reporting that men are paid more on average. Whether transparency alone is enough to drive change is a matter of debate.

Women in Business.

Closely related to the pay gap is the under-representation of women in senior business and leadership roles. Women remain under-represented in the boardroom and in senior management, which contributes to the pay gap and represents a loss of talent and potential.

Supporting women to progress into senior roles, and to start and grow their own businesses, is widely seen as important both for fairness and for the economy. A more equal business world is one that makes fuller use of the talents of all its people.

Why It Matters.

Closing the gender pay gap matters for reasons of fairness and of economics. It is a matter of fairness that women should not be disadvantaged in their earnings and careers, while there is also a strong economic case that making fuller use of women's talents benefits the whole economy.

For the North East, with its history of recognised improvement, continuing to narrow the gap is both a matter of fairness and an opportunity. A more equal workforce is a stronger and more productive one.

Closing the Divide.

The gender pay gap, the difference in average earnings between men and women across the workforce, has been narrowing, including in the North East, but progress has been slow and the gap remains significant. Understanding what lies behind it, from occupational segregation to the under-representation of women in senior roles, is key to closing it.

For reasons of both fairness and economics, narrowing the gap is an important goal. For the North East, building on its recognised improvement to continue closing the divide is a worthwhile and important endeavour.

A Question of Talent.

Beyond the questions of fairness that the gender pay gap raises, there is a powerful economic argument that closing the gap, and making fuller use of the talents of women, benefits everyone. An economy that does not make full use of the talents and potential of half its people is an economy that is not performing to its full potential, missing out on the contribution that women could make if the barriers they face were removed.

When women are under-represented in higher-paid roles, in senior positions and in business leadership, it represents not just unfairness to the individuals concerned but a loss of talent and potential to the economy as a whole. Research has consistently suggested that organisations and economies that make fuller use of the talents of women, including in leadership, tend to perform better, benefiting from a wider range of perspectives and skills.

This is why closing the gender pay gap, and supporting women to progress and to lead, is increasingly seen not just as a matter of fairness but as an economic imperative. For a region like the North East, seeking to grow its economy and make the most of its people, ensuring that women can fully participate and progress is an important opportunity.

This means tackling the barriers that hold women back, from the practical challenges of balancing work and caring responsibilities to the cultural and structural factors that limit their progression. It also means supporting women to start and grow their own businesses, an area where they remain under-represented but where there is significant untapped potential.

Making fuller use of the talents of women is, in this sense, not just the right thing to do but a smart thing to do, benefiting individuals, businesses and the wider economy alike. For the region, it represents an opportunity to strengthen its economy by drawing fully on the talents of all its people.

Join the conversation.

Men still earn more than women on average across the workforce, though the gap has been narrowing, with the North East among the most improved regions.

What do you think would do most to close the gender pay gap?