Young women still face a severe “pay penalty” when they become mothers despite the gender pay gap falling drastically, new research claims today.
A study by the Resolution Foundation shows the pay gap for Millennials - those born between 1981 and 2000 – is at five per cent – a reduction in the nine per cent wage difference faced by women born from 1966 to 1980.
Yet when Milliennials hit their thirties they experience almost exactly the same wage penalty as the generation before them, with women’s pay nine per cent lower than men’s.
Laura Gardiner, Senior Policy Analyst at the Resolution Foundation, argued the pay gap becomes more pronounced once women become parents – with the average age of a first time mother in the UK now at 28.6 years.
She said: “Young women today face relatively little disadvantage in terms of their pay packets compared to what their parents’ and grandparents’ generation faced.
“But while many millennial women haven’t experienced much of a pay gap yet, most probably will once they reach their 30s, when they start having children. What’s more this pay penalty is big and long-lasting, and remains for younger generations despite the progress in early careers.”
According to the analysis, Baby Boomers - those born between 1946 and 1965 - experienced a pay gap of 16 per cent during their 20s. That gap fell to nine per cent for women in Generation X (born between 1966 and 1980) and then to five per cent for Millennials.
Despite this progress, the gender pay gap continues to rise rapidly for women in their 30s and 40s.
Among Baby Boomers the gender pay gap rose from 21 per cent at the age of 30, to 34 per cent by the age of 40, after which it started to fall.
For Generation X the pay gap increased from 10 per cent at age 30, to 25 per cent by the age of 40.
Labour’s Shadow Secretary of State for Women and Equalities, Sarah Champion, called on the government to do more to help close the pay gap as women progress in their careers.
She said: “Many women are still trapped in chronically low-paid, low progression sectors of the economy, while the cost of childcare has soared under the Tories.
“Thousands of new mothers are forced out of their jobs each year due to maternity discrimination and the vast majority of tax and benefit changes have fallen on the shoulders of women.”
The Government is putting forward plans, set to come into force this April, which would force all companies employing more than 250 staff to publish information on gender pay gaps.
Kate Andrews, from the Institute of Economic Affairs think-tank, argued that further regulation would not tackle the problem, and what was instead needed was for society to “re-examine” child-raising.
This includes a greater uptake in fathers taking shared parental leave, a policy which came into force in April 2015.
Andrews said: “The so-called ‘gender pay gap’ is more accurately described these days as a ‘motherhood pay gap’; the long stretch of time women take out of the work force to play the role of primary caretaker has a large – and detrimental – impact on future and lifetime earning potential.
“Shared parental leave policies have begun to tackle this issue, but fundamentally this is not an issue that can be solved with regulatory interference; we, as a society, must re-examine our traditions and lifestyles, and the expectations we put on our partners, sisters, and friends to carry out certain roles.”
Responding to the Resolution Foundation report, a Government spokesperson said: “The gender pay gap is at a record low but we have to push further to eliminate it completely – shining a light on organisations’ pay gaps means employers can take action to tackle the causes and drive change.
“That’s why we are introducing requirements for all large employers to publish their gender pay and bonus gaps data from April this year.”