Forcing firms to close the gender pay gap by law is a mug’s game | thearticle

The _Guardian_ reported last week that bosses at TSB may have their bonuses docked because the bank has failed to increase the number of women in senior roles. TSB has scrapped its

commitment to reach a target of women holding 45 to 55 per cent of senior roles by 2020, after finding that it hadn’t made progress. According to this report in the _Guardian_ “bonuses for

both executives and managers . . .will be docked”. A final decision will be made by the remuneration committee in the new year. The difficulty faced by TSB, and many other firms, is

predictable. Statistics show that men and women have similar labour market participation and pay rates before the birth of children. The fact that they track each other so closely is a good

indication that there is negligible discrimination at play. It is when they have children that many women choose to leave the workforce. Then, if they return, they often take part-time or

more flexible work, enabling them to spend time at home with family when needed. The charts on pages 39 and 40 of the  report “Children and Gender Inequality: Evidence from Denmark”

illustrate the point. Closer to home, a similar point is made by UK statistics, which show that “among younger employees aged under 40 the gender pay gap for full-time staff is close to

zero.”  The _Economist_ calls the phenomenon “the motherhood penalty”. An interesting study  from the Government Equalities Office also shows that women favour a shorter commute than men.

This is predictable, confirming that many women choose to trade-off other factors, in order to be closer to home and family.  However, while women are illustrating their preferences with

their feet, firms are faced with legislation, introduced by the Conservatives in 2017, requiring them (if they employ more than 250 people) to publish their gender pay gap data. The

government has surrounded the legislation with tips for firms encouraging them to “consider taking new or faster actions to reduce or eliminate their gender pay gaps”. Employers are

encouraged to “provide a narrative with their calculations. This should generally explain the reasons for the results and give details about actions that are being taken to reduce or

eliminate the gender pay gap.” We are a free society, yet it is a brave firm that doesn’t bother with the narrative. With the pressure on all large firms to narrow their gender pay gap, _at

the same time_ as many older and experienced women are choosing not to participate in the labour market full-time, it is self-evident that many firms will fail. And now, we see a firm, the

TSB, which is effectively publicly punishing its senior staff for this predictable failure. TSB managers are not only potentially having their bonuses docked. They are receiving embarrassing

publicity for their failure and are being smeared. Mark Brown, general secretary for the Affinity trade union, said of TSB’s female CEO, Debbie Crosbie, “to abandon TSB’s target of having

at least 45 per cent of senior manager roles held by women by 2020 and pushing it out to 2025 is deeply offensive. She’s well and truly pulled up the ladder on her female TSB colleagues.”

What an unpleasant remark by Brown. Yet I wonder if Crosbie feels unable to respond. No-one is willing to say the obvious. Senior women, skilled, experienced, willing to work long and

unpleasant hours, sometimes in stressful and testing circumstances, can be hard to come by. They’re certainly harder to come by than equivalent men. Therefore it is statistically impossible

for every large firm in the country to find them in sufficient numbers to close the gender pay gap. Firms seem to feel unable to point this out. Instead they must pump out plans about what

they’re doing to “close the gap”. Such virtue-signalling has been brought about by a Conservative government. However, with an election on Thursday, we might sink further into a

state-sanctioned cycle of virtue-signalling, failure, blaming and shaming. If the Labour Party wins power next Thursday, its manifesto says that it will take action to close the gender pay

gap by 2030. You can judge for yourself the likelihood of that being achieved. Never mind — we will be punished. Labour will set up a “new Workers’ Protection Agency” which “will ensure that

employers take equal pay seriously and take positive action to close the gender pay gap”. Indeed, Labour will “require all employers with over 250 employees to obtain government

certification on gender equality or face further auditing and fines”. (Labour Manifesto 2019, page 66). If we reach a situation where firms are fined for not doing something that it is

statistically impossible for them all to do, we will enter a world of shady statistics, skewed incentives, doublespeak, and despair. (How would you feel if you were Debbie Crosbie right now?

Perhaps she’s another female CEO considering quitting.) Routes that firms _could _take to narrow the pay gap include not employing so many women at junior levels so as to improve the

quality of their statistics. If unemployment for young women goes up, no-one specifically will be blamed. Or firms could just pay the fines as a cost of doing business. Another option would

be to shut up shop. After all, why risk being fined by the government, and insulted by people like Mark Brown, for providing goods and services, jobs, incomes, and opportunities, when you

could take it easy at home? Like so many sane, older women are doing already — and rather enjoying it.