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Women have lost out on £1.2m due to inequality

Category: Blogger's Corner, Women, gender diversity, inequality

Women have lost out on £1.2m due to inequality

A woman who started work the year after the Equal Pay Act was introduced would still, as of last year, have made £253,000 less than a man. With compound interest, that's more than £1.2m

If the average woman who started work the year after the Equal Pay Act was introduced in 1970 was paid the same amount as her male counterpart over her working lifetime, she would be a quarter of a million pounds richer.

A woman who began working full-time in 1971 at the age of 18 would have made, in today’s money, £252,888.32 less as of last year than her male colleague.

The legal experts Employment Law Advisory Services analysed - accounting for inflation - ONS data that tracks the average hourly pay of men and women each year.

The average salary in the UK is £26,500, which means the woman in this scenario would have to work an extra nine and a half years at the current wage rate to catch up with the man’s total earnings.

And if that difference between a man’s salary and a woman’s salary had been put in a bank account each year, the compound interest - at the annual average interest rate between 1971 and 2013, according to the Building Societies Association - would have turned that £252,888 into £1,233,377.

Even if she didn't save, here are some of the things that a woman could buy today with the extra £250k she would have made if she was paid the same as a man.

• A house. The average price of a home in the UK hit £250,000 last year

• The UK’s most luxurious houseboat, this 85-foot barge with three double bedrooms

• This John Constable painting

• A week of Robin van Persie's footballing career

• This extremely rare skeleton of a 11,500-year-old woolly mammoth

• A weekend in a hotel for every person sleeping rough in the UK

• Deworming treatment for more than 1m children

Although the Equal Pay Act was introduced into law more than four decades ago, women in full-time employment earn 15.7pc less than men -- and overall, the average employed woman in the UK earns a fifth less than the average employed man.

That means, as of November 4 this year, women in full-time employment effectively stopped getting paid and will work the rest of this year for free, relative to men. The Fawcett Society, the women’s equality charity, calls this Equal Pay Day.

The wage discrepancy is partly due to the fact that some women get paid less than men who do the exact same job. A 2010 global study from the women in business charity Catalyst found that the average female MBA graduate earns $4,600 (£2,893) less than a male colleague in their first job out of university -- even when factors such as experience, geography, industry and parenthood are accounted for.

Another Catalyst study of MBA graduates around the world found that, in 2008, promotions added 21pc to men's salaries but boosted women's salaries by just 2pc.

The pay gap also persists because women are more likely to work low-wage jobs, such as care work, or zero-hours contracts. Recent TUC analysis found that men working full-time are twice as likely to earn £50,000 a year than women in full-time employment.

The gender pay gap widened in 2013 for the first time in five years, exacerbated by the economic recovery which has seen a growth in private sector jobs, where men earn 24.8pc more than women, and a reduction in public sector jobs, where the gap is 17.1pc.

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VERCIDA works with over one hundred clients who are committed to creating an inclusive work environment. If you are an employer and interested in working with VERCIDA to promote your diversity and inclusion initiatives and attract the best candidates, please email [email protected] for more information.

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