Should we force companies to disclose their gender pay gaps?

Companies in the United Kingdom will be made to disclose how much they are paying employees, in an attempt by the government to close the gender pay gap.

These new proposals, which are set to become law, require all companies with a staff of more than 250 people to declare the amounts they pay female and male employees.

League tables will show which types of companies are the worst offenders, as well as obliging them to publish details of their gender pay gap on their own websites.

Women in the UK currently earn an average of 20% less than men, despite the 1970 Equal Pay Act making it illegal to pay different amounts to men and women doing the same jobs.

In an attempt to highlight where the gender gap is at its worst, the country’s largest employers will be required to go a step further. Around 8,000 companies will also have to publish the number of men and women in each pay range. Bonuses will be included in the statistics.

The UK government’s announcement echoes the stance of other countries, including the United States. President Barack Obama recently took a stand against gender inequality with the implementation of similar rules requiring companies to provide wage information.

The World Economic Forum’s Global Gender Gap Report 2015 found that despite women’s annual earnings almost doubling between 2006 and 2015, men are still paid on average twice as much as women.

Using data from the report, among other sources, the Economist has created a glass-ceiling index. This chart shows the gender wage gap in OECD countries.

You can view an interactive version here.

What this chart shows is that no country has equal pay. New Zealand comes close, with a wage gap of 5.6%, a considerably better result than the OECD average of 15.5%. Both Britain and the US come below average with gender wage gaps of just above 17%.

Equalities groups are happy to see both the US and the UK work towards closing the gap. The Fawcett Society, which campaigns for women’s rights, described the UK government’s announcement as “the best opportunity in a generation to close the gender pay gap”.

But some groups are arguing that these new rules don't go far enough. The Trade Union Congress (TUC) has expressed concerns that employers won’t have to explain their wage gaps.

“If David Cameron is serious about ending the gender pay gap … we need a much bolder approach from ministers,” said Frances O’Grady, the TUC’s General Secretary.

UK companies will need to start calculating the pay gap from April 2017, with the first league tables being published in 2018.

Have you read?
The Global Gender Gap Report 2015
Obama on gender pay gap. How does your country compare to the US?
Which European countries have the biggest gender pay gaps?