May 30, 2018 • 27 mins
Can companies be shamed into closing the pay gap? A new law in the U.K. requires companies with more than 250 employees to publicly disclose their gender pay gaps. More than 10,000 companies reported by the April deadline, revealing differences in median pay of as much as 60 percent in some extreme cases. Now it’s up to companies to decide what, if anything, to do about that. This week, Suzi Ring talks to one company that reported a wide gap, and how that’s changing the way it hires and pays women. Then, Claire Suddath tells us about a different pay gap law in Iceland, how that came to be and if it’s working.
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Speaker 1 (00:00):
M Carrie Gracie was a top editor at the BBC.
She worked there for thirty years, and about five years
ago she moved to China for a prestigious job as
one of four international editors. Then last summer she found
(00:21):
out she made fifty percent less than the men doing
the same job. She resigned. I was for four years
leading our China coverage. That's carry testifying in front of
British Parliament a few months ago. There are significant risks
in our China coverage. I dealt with them. I did
a good job. Twice. I've been a World Television Society
(00:44):
normally for the BBC for specialist journalists of the year.
It's just and you know what, I get me emotional.
But what I really wants to say about this equal
pay problem at the BBC is what it forces the
BBC to do is to retrofit in defense, you know, defenses,
(01:04):
justifications of the indefensible. The BBC gets most of its
funding from the public. Its newest charter required the broadcaster
to reveal how much it pays its top talent. The
government thought that people should know where their money was going.
It turned out it was mostly going to men. The
BBC had a wide pay gap at its most senior levels.
(01:27):
The top man made over two million pounds, the highest
paid woman just a quarter of that. You have an
equal pay problem, but you can't admit it because you
don't want to confront what maybe fiscal liabilities, which we
all agree are there. The BBC's pay scandal and Carries
public statements caused a big headache for the company. The
(01:49):
broadcaster has faced almost two hundred equal pay complaints and
a flood of negative press. The BBC told Bloomberg in
a statement, we are committed to making the BBC the
best place for women to work, and have said we
want to close the gender pay gap and have women
in half of leadership and on air rolls by When
(02:09):
individual issues over pay have been raised, we have sought
to resolve them as quickly as possible, but Carry wants
more from the BBC. My problem will be resolved by
an acknowledgement that my work was of equal value to
the men who I served alongside as an international editor.
Carrie's story doesn't sound that different than the ones we've
(02:31):
been telling you about in the US, but there is
one big difference between here and there. The British government
isn't just requiring the BBC to fest up about pay,
it's requiring all of its biggest businesses to report their
gender pay gaps. Companies don't have to get as specific
as the BBC did. Remember, the BBC is funded by
(02:52):
British taxpayers, so that's why it had to disclose. But
as part of a new law that went into effect
this year, all large companies in the UK have to
report to the government what they pay men versus women.
And Carrie's story was kind of a prelude to the
reckoning the entire country is going through now. When you
(03:16):
look at the world, you know what the population like,
Where is our place like? Where is our value? Where
going to deserve people for equal work? The gender alive
stops to keep women not on a pedistal but in
case you don't feel it, But when you see the numbers,
it's shocking. Get a power equalization between the sexiest women.
(03:38):
What do they want? We want to end gender inequality
and to do this we need everyone involved. Without women's work,
the wheel of the country they did not turn. You
always ask who's the best person, and it forms a
white bloke that's got to pay something wrong. And here
are the all male nominees. Welcome back to the paycheck.
(04:06):
I'm Rebecca Greenfield. The pay gap isn't just a phenomenon
in the US. Globally, women make about half of what
men do, and that's average earnings. According to the World
Economic Forum, the UK looks a lot like the US.
There are some equal pay laws on the books, but
on average women make a little under twenty less than men.
(04:30):
But unlike the US, the UK is trying to fix
things on a national scale. The country is in the
middle of a big nationwide experiment. As of April this year,
every large company in the UK had to publicly report
its gender pay gap. That is, the raw, unadjusted difference
between what all the men and all the women make
(04:51):
in a given company. It's a shaming initiative. Companies who
have particularly big gaps, and a lot of them do,
will be theoretically incentivized to close them. So far, over
ten thou companies have reported, and what they've reported in
most cases is that men are making more than women.
Goldman Sachs remember the company from episode one that's fighting
(05:14):
a class action gender discrimination suit here in the US.
It's female UK employees make less than half of what
the men do. Over at Bloomberg dot com, there's a
graphic that compiled all the company pay gaps, including ours.
These numbers aren't broken down by job title or level
of experience, so they don't tell us anything about what
(05:36):
men and women are being paid for the same jobs.
What these numbers show is that at most companies, women
hold very few of the highest paid positions. The question
is what happens next. Susie Ring, a reporter in Bloomberg's
London bureau, reports, now that gender pay reporting is the
(06:02):
law in England, every single UK company with two fifty
employees or more has had to report their gender pay gap.
They had a deadline of a to do it, and
the figure they were asked for was simple, no fancy
math needed, just what an average do the men make
at your company versus what the women make. If the
(06:24):
men make a lot more, it likely means yours as
a company where men are mostly at the senior levels
with the best paid jobs, and women have a lot
of the more junior roles. I can remember it being
very male top heavy, so I remember attending events and
the men at the front were exactly that. There are
(06:45):
men um and I remember looking at those people and thinking,
will I ever be standing on that stage with those men?
Or actually is it? Is it a man's job? Is
it the league manstrow white meal jaw? Actually? This is
Sarah Farquaharsen. She's thirty two and has been working in
(07:07):
customer service since she was seventeen. She says that through
her years in the industry, she's noticed something about her colleagues.
They're mostly women, and the people in the most senior
ranks mostly men. Sarah now works for Virgin Money, the
financial services business of Richard Branson's sprawling Virgin Empire. She
(07:30):
works at the company's customer service center in the northern
English city of Newcastle. It's her job to check on
how well other customer service agents are answering customer complaints.
She's also paid less than most people at her company.
Customer service workers are among the lowest paid groups at
Virgin Money, and most of the customer service workers are women.
(07:52):
That's why, even though Virgin Money has a female CEO
and it openly celebrated this new gender pay reporting law
and wants to be at the fourth of women's equality,
the company ended out reporting a thirty two gender pay gap.
Here's their CEO, Jane A. Gardia. The reason that we
report gender pay gap for thirty two is that although
(08:12):
I'm you know, we have a female chair, female CEO,
and we've got female representation on our EXCO at our
next senior levels of management, we are about male and
our customer services brilliant staff are predominantly female. And so
when you add up everybody's salaries and divide the male
(08:34):
and the female salary, then you get the thirty two
percent pay gap. And that's why I still think numbers
are important, because our objective is to get to fifty
fifty throughout the organization, and that means recruiting more brilliant
men to be fabulous customer service agents and recruiting more
brilliant women to be you know, in all layers, if
(08:54):
you like, of the hierarchy of management, and at that
point our gender pay gap will be equal. When I say,
Virgin Money wanted to be out front in the fight
for women, here's an example. They reported gender pay figures
a year before they legally had to revealing their pay
gap for twenty sixteen. Back then the number was even
(09:14):
bigger thirty six. So here was Virgin Money trying to
do the right thing and be transparent about their numbers
before they technically had to, and their numbers have not
been making them look good, and women weren't moving up
into the higher ranks from customer service rolls. The customer
service segment accounted for about half its gender pay gap.
(09:36):
Here's why Sarah, the customer service worker at Virgin Money,
thinks things ended up that way. I think customer services
has has historically been a female thing. Um, so you've
probably got the forty fifty years worth of female experience
in that area. We work all sorts of shift patterns
(09:57):
of virgin and and and I mean that might lend
it that actually might lend itself to women more because
historically and we have got a we culturally have more
of an issue where there is still a view that
the woman is the caregiver. And so if if a
man returns to a full time and a woman needs
(10:19):
to fit to it, I was around that she will
go for a business who offers flexible working. Jana and
Guardia says getting their gender pay gap from thirty down
to is a start, but she acknowledges they've got a
lot of work to do. Remember, going to a number
of organizations and broadly forty year old white men saying
(10:39):
to me, when you're trying to take my job and
my son's job away from me. And the point is
that we have to give ourselves time to my progress
because we're not in the business of firing men. It's
about making sure that every time there's a new job advertised,
we've got diverse job lists to choose from. It's about
making sure that in the organization people are understand that
(11:01):
um everybody is filled with unconscious bias. Virgin Money is
working on changes that will get more men into customer
service jobs and more women into executive positions. The bank
offers flexible hours across the company and looks at job
applications blind to try and reduce the chances of gender bias.
But a big part of their work, maybe even bigger
(11:22):
than getting more women into executive roles, is going to
be getting more men into customer service jobs. And I
think that's really important because it means that you have
to change some attitudes of men. You know, sometimes men
think I don't want to go into a customer services job,
you know, I want to go into a different role.
But actually that's the way I think that in financial
(11:43):
services organizations, men and women can make a lifetime career
that's going to be successful. It's going to be full
of integrity, and it's going to mean that they can
grow to be whatever they want in in the businesses
of the future. What Virgin Money is going through this
(12:04):
very public realization that they've put more men at the
top and more women at the bottom of their company.
That's happening to a lot of companies in the UK
forced to open up their pay gap numbers. Thousands of
businesses are facing an uncomfortable truth and they have to
figure out how to explain these numbers to the whole country.
(12:26):
Some companies tried to massage the data to make their
numbers look a little bit better. Earlier this year, it
came out that some accountancy firms and law firms didn't
include partners in the numbers the highest paid tears in
their firms. What they were doing was legal. The government
had said it was okay to report this way, but
when people found out businesses were leaving partners out of
(12:48):
the equation, their outrage forced a number of companies to
restate their figures. Then there are the companies that didn't
report in time for the deadline, even though they had
to buy law. About fifteen hundred businesses missed the April cutoff.
In theory, a company can face an unlimited fine for
not reporting, but we don't yet know how easy this
(13:11):
will be to enforce and how much companies who don't
comply will really have to cough up. But for most companies,
what the reporting did was to force them to look
closely at how their businesses were structured and why women
often seemed to drift to the bottom of that structure.
I mean, one classic thing was Ryanair, where there's a
(13:32):
pay gap and they were saying, well, it's obvious we've
got seventy percent pay gap because all the men of
pilots and all the women are serving the drinks. But
they've got a global pilot shortage. Why don't they train
some more women as pilots. That was Harriet Harman. She's
a British politician and she's also the reason this big
new law exists. Ryanair, the company she was just talking about,
(13:56):
says that they've seen an increase in applications from female
pilots and are quote committed to developing this welcome trend.
Harriet is not surprised by the big gaps and companies
are reporting. Her third or six year long political career
has been a lesson in how the different roles are
for men and women in every industry, including government. When
(14:17):
she was elected as a Member of Parliament in only
three percent of British politicians were women. It seemed like
women were blocked from lots of areas of British politics.
Harriet was like a one woman wrecking crew, breaking through
those blockades one by one. She was the first UK
female Solicitor General for American listeners, that's basically the equivalent
(14:39):
of the Deputy Attorney General, and also the first Minister
for women, a role that had never existed before her.
It was her job to make policy about issues like
women's rights. One of her crusades has been gender paid transparency.
But to a lot of politicians, this idea of forcing
companies to state their pay gaps, it was just too radical.
(15:01):
I was a bit on my own arguing for transparency
for pay transparency, but I felt it would put the
power in women's hands if they could actually see what
was going on, if the veil of discrimination was torn off,
because what had been happening for years is the National
Statistical Office would be reporting the overall figure of the
pay gap, and every organization they'd go, oh, tucked up,
(15:25):
isn't that awful a pay gap? We're so against? That
must be happening somewhere else. We'd never have it here.
But of course it always was happening here. Harriet realized
that without widespread support, the only way she'd ever get
the law through was to go step by tiny step.
The first step was to introduce an imperfect solution, make
(15:47):
the program voluntary. Companies could make their pay figures public
if they chose. Even getting government to do that, create
a system for companies to report their pay gap if
they wanted to was controversy. Show we had such a
fight down to the wire. It was the very last
piece of legislation that got through before the general election,
(16:08):
which we then lost. But I didn't manage to get
the bill through until the literally the last day. In
two thousand and ten. Companies did not jump to publish
their pay figures because the reporting was voluntary. Every business
worried about sticking their neck out if they didn't have to.
So by Tift, five years after the voluntary solution was
(16:29):
put into place, only five companies in the whole country
had reported their numbers. Clearly, making reporting optional wasn't working,
but politicians couldn't agree on making reporting mandatory either. Vince Cable,
seventy five year of British political icon and leader of
the Liberal Democrats party, was Business Secretary by this time.
(16:52):
He says his political opponents were really resistant to forcing
companies to report. Here he is describing how they put it.
The argument feels as well, what is it going to
tell us because men and women are doing different geomaty
is measuring like for like. But of course, as we know,
that raises the basic question about why are there and
(17:15):
women doing different roles. In the end, it wasn't even
Harriet or Harriet's party who made the reporting mandatory. A
coalition government had taken power after Harriet's party Labor, was
voted out, and basically what happened was that the left
wing party of that coalition pressured the right wing to
make a campaign promise when it was trying to get reelected.
(17:38):
When they were reelected, it was the right wing Conservative
party who had to make good on their promise and
ended up forcing companies to reveal their gender pay gaps,
and that's where the UK is now. It took years
for a mostly male government to decide that companies should
even be asked to state what men and women make,
and even now that the numbers are out, there was
(18:00):
still seeing companies try to make their numbers better without
paying women more, or failed to report or not adequately
explain why women end up in the low paid jobs
and men in the high paid ones. Given how long
it's taken us to get to this point, I asked
Harriet how long she thinks it should take the country
to close its gender pay gap. These are things that
management can change if they want to, And therefore I
(18:23):
think that women have waited long enough and endured unequal
pay long enough. If you try and add together all
the costs that women have borne by an equal pay,
it is untold billions. So I would say sooner rather
than later, I think women have fed up with waiting
for equality. We don't know yet how much there will
(18:52):
affect the pay gap in the UK. Its main purpose
is to diagnose the problem. It's up to companies to
look at their number and decide what, if anything, they're
going to do. But in another European country, there's a
new law that's getting a lot of attention. It compels
companies to do something about the pay gap. Iceland, like
(19:12):
the US and the UK, passed equal pay and anti
discrimination laws decades ago. The anti discrimination law has been
strengthened four times since nineteen seventy six, and the country
has also passed laws requiring an equal number of men
and women on company boards. But despite all of this,
Iceland still has a pay gap of about sixteen percent,
(19:35):
so this year it doubled down. While the UK has
been looking at the average pay difference between men and women,
Iceland has passed a new law focused on men and
women who hold the same job. Claire Setteth reports starting
this year, companies with more than twenty five employees have
to submit to the government official salaries for every job
(19:59):
and and if one employee is making more than another
who's doing his or her exact same job, a company
has to justify that discrepancy in writing. My name is Rosa,
maybe because of those long surnames mean we use giving
names in Iceland, so you can call me Rosa. But
(20:20):
I'm the head of the Equality Unit at the Ministry
of Welfare and in Iceland. Rosa is in charge of
this big new salary law and the experiment the country
ran to see if it would even work. In two
thousand eight, Iceland launched a pilot version of the law
with real businesses to see what worked and what didn't.
(20:43):
One of the businesses that participated was Iceland's Customs office,
where men tended to be in field jobs and women
worked in the office. Those field jobs they paid better,
so custom officers working out in the field, for example,
are of the cases made. And they had had the
(21:09):
unwritten rule that those men could return to the headquarters
when they were close to their retirement aids and just
do ordinary office work. But then they were sitting and
sharing offices with women that were working as secretaries and
(21:31):
the equal past and that is based on the rule
of paying equally for jobs of equal value. So employers
needs to ask those questions, what are we paying for?
You know, what value has this job for the company?
Here were men working alongside women doing the same jobs,
(21:52):
and because of their field job salary histories, the men
were getting paid more under this new law. The customs
are has had to explain that to the government, and
Iceland decided that If the only reason you're paying one
employee more than another is that he's an older man
close to retirement, well that's not a good enough reason.
(22:12):
The Customs Office volunteered to be part of this experiment,
they didn't necessarily think they'd find much of a paid discrepancy.
Rosa says that a lot of companies were in this boat.
But many employers set that at the beginning, we are
not discriminating in our company. But in many cases they
(22:33):
found out that their workplaces were just astenti biased as
any other, and that there were in some cases discriminating
against individuals. I didn't know, and I don't think that
people decide that they are going to discriminate against people,
or that they're going to pay this guy or this
(22:57):
woman more or less than the colleagues. It's something that happens.
When companies discover a pay gap like this, they're required
to fix it. They can give people raises or even
make pay cuts, but essentially they have to bring people
in line with the stated salary for their job. To
(23:18):
be clear, this new law is just one small part
of Iceland's pay gap strategy. In fact, Rosa isn't really
sure why Iceland's getting so much pressed for it. We
are getting a lot of attention for the work we
are doing. It's it's unbelievable, you know, because I've been
around since in this field, since twenty years or for
(23:40):
twenty years, and I mean, we have never had this
attention for the policy field. Here's something incredible about Iceland
in any given year between forty and Parliament is women.
The reason Iceland has been able to tackle this issue
is that women have enough power to be able to
make the changes they want. In fact, this whole focus
(24:03):
on workplace equality got started because in whopping of the
country's women went on strike from their jobs, from child
care and chores at home to protest their mistreatment. In
(24:26):
Iceland was the first country in the whole world to
democratically elect a woman as head of state. All those
women have helped get these laws passed. Even with all
these changes, closing Iceland's gap is taking an awfully long time.
They still have that six percent pay gap, and once
you account for the differences in the types of jobs
(24:48):
men and women hold or hours worked, six percent of
that gap still persists. A decade ago, it was eight
but at this rate it's going to take another thirty
years to get it down to zero. Politicians have learned
from experience that genter equality doesn't come about on its
(25:09):
owner court. They need to push things and um. They've
also learned that if they will wait on the normal
poses legislative chances, they can wait forever. The fact that
even in Iceland, where so many laws are already on
the books to narrow the pay gap, where so many
women are making the laws, there's still a sixteen percent gap.
(25:33):
So as you just how hard it is to get
to true equality. Iceland wants to eliminate its pay gap
within the next five years. But that gap is the
results of generations of traditions and habits and beliefs that
we've held about women and men's place in society. That's
something that can't just be fixed with a few raissa.
(25:59):
Iceland had a magic ingredient to getting laws passed a
lot of women lawmakers. The United States isn't tackling the
pay gap on the same national scale as Iceland and
other countries, but that could change. A record number of
women in the US declared they were running for office
in If those women win, who knows they might look
(26:23):
to Iceland for inspiration, but that's a lot of ifs.
For now, most of the effort to close the pay
gap here isn't happening on the federal level. Next week
we'll find out what happens when it's up to companies
and not the government to fix pay inequality. Thanks for
(26:44):
listening to another episode of The Paycheck. If you like
the show, please head on over to Apple Podcasts or
wherever you listen to rate, review and subscribe. The show
was reported by Susie Rings Claire Setteth and hosted and
reported by me Rebecca Greenfield. It was edited by Chessca
Levie and produced by Magnus Hendrickson. We also had helped
from Jillian Goodman, Janet Paskin, and Liz Smith. Our original
(27:08):
music is by Leo Sidron. Carrie Vanderyott did the illustrations
on our show page, which you can find at Bloomberg
dot com Slash the Paycheck. Francesca Levie is head of
Bloomberg Podcasts.
M Carrie Gracie was a top editor at the BBC.
She worked there for thirty years, and about five years
ago she moved to China for a prestigious job as
one of four international editors. Then last summer she found
(00:21):
out she made fifty percent less than the men doing
the same job. She resigned. I was for four years
leading our China coverage. That's carry testifying in front of
British Parliament a few months ago. There are significant risks
in our China coverage. I dealt with them. I did
a good job. Twice. I've been a World Television Society
(00:44):
normally for the BBC for specialist journalists of the year.
It's just and you know what, I get me emotional.
But what I really wants to say about this equal
pay problem at the BBC is what it forces the
BBC to do is to retrofit in defense, you know, defenses,
(01:04):
justifications of the indefensible. The BBC gets most of its
funding from the public. Its newest charter required the broadcaster
to reveal how much it pays its top talent. The
government thought that people should know where their money was going.
It turned out it was mostly going to men. The
BBC had a wide pay gap at its most senior levels.
(01:27):
The top man made over two million pounds, the highest
paid woman just a quarter of that. You have an
equal pay problem, but you can't admit it because you
don't want to confront what maybe fiscal liabilities, which we
all agree are there. The BBC's pay scandal and Carries
public statements caused a big headache for the company. The
(01:49):
broadcaster has faced almost two hundred equal pay complaints and
a flood of negative press. The BBC told Bloomberg in
a statement, we are committed to making the BBC the
best place for women to work, and have said we
want to close the gender pay gap and have women
in half of leadership and on air rolls by When
(02:09):
individual issues over pay have been raised, we have sought
to resolve them as quickly as possible, but Carry wants
more from the BBC. My problem will be resolved by
an acknowledgement that my work was of equal value to
the men who I served alongside as an international editor.
Carrie's story doesn't sound that different than the ones we've
(02:31):
been telling you about in the US, but there is
one big difference between here and there. The British government
isn't just requiring the BBC to fest up about pay,
it's requiring all of its biggest businesses to report their
gender pay gaps. Companies don't have to get as specific
as the BBC did. Remember, the BBC is funded by
(02:52):
British taxpayers, so that's why it had to disclose. But
as part of a new law that went into effect
this year, all large companies in the UK have to
report to the government what they pay men versus women.
And Carrie's story was kind of a prelude to the
reckoning the entire country is going through now. When you
(03:16):
look at the world, you know what the population like,
Where is our place like? Where is our value? Where
going to deserve people for equal work? The gender alive
stops to keep women not on a pedistal but in
case you don't feel it, But when you see the numbers,
it's shocking. Get a power equalization between the sexiest women.
(03:38):
What do they want? We want to end gender inequality
and to do this we need everyone involved. Without women's work,
the wheel of the country they did not turn. You
always ask who's the best person, and it forms a
white bloke that's got to pay something wrong. And here
are the all male nominees. Welcome back to the paycheck.
(04:06):
I'm Rebecca Greenfield. The pay gap isn't just a phenomenon
in the US. Globally, women make about half of what
men do, and that's average earnings. According to the World
Economic Forum, the UK looks a lot like the US.
There are some equal pay laws on the books, but
on average women make a little under twenty less than men.
(04:30):
But unlike the US, the UK is trying to fix
things on a national scale. The country is in the
middle of a big nationwide experiment. As of April this year,
every large company in the UK had to publicly report
its gender pay gap. That is, the raw, unadjusted difference
between what all the men and all the women make
(04:51):
in a given company. It's a shaming initiative. Companies who
have particularly big gaps, and a lot of them do,
will be theoretically incentivized to close them. So far, over
ten thou companies have reported, and what they've reported in
most cases is that men are making more than women.
Goldman Sachs remember the company from episode one that's fighting
(05:14):
a class action gender discrimination suit here in the US.
It's female UK employees make less than half of what
the men do. Over at Bloomberg dot com, there's a
graphic that compiled all the company pay gaps, including ours.
These numbers aren't broken down by job title or level
of experience, so they don't tell us anything about what
(05:36):
men and women are being paid for the same jobs.
What these numbers show is that at most companies, women
hold very few of the highest paid positions. The question
is what happens next. Susie Ring, a reporter in Bloomberg's
London bureau, reports, now that gender pay reporting is the
(06:02):
law in England, every single UK company with two fifty
employees or more has had to report their gender pay gap.
They had a deadline of a to do it, and
the figure they were asked for was simple, no fancy
math needed, just what an average do the men make
at your company versus what the women make. If the
(06:24):
men make a lot more, it likely means yours as
a company where men are mostly at the senior levels
with the best paid jobs, and women have a lot
of the more junior roles. I can remember it being
very male top heavy, so I remember attending events and
the men at the front were exactly that. There are
(06:45):
men um and I remember looking at those people and thinking,
will I ever be standing on that stage with those men?
Or actually is it? Is it a man's job? Is
it the league manstrow white meal jaw? Actually? This is
Sarah Farquaharsen. She's thirty two and has been working in
(07:07):
customer service since she was seventeen. She says that through
her years in the industry, she's noticed something about her colleagues.
They're mostly women, and the people in the most senior
ranks mostly men. Sarah now works for Virgin Money, the
financial services business of Richard Branson's sprawling Virgin Empire. She
(07:30):
works at the company's customer service center in the northern
English city of Newcastle. It's her job to check on
how well other customer service agents are answering customer complaints.
She's also paid less than most people at her company.
Customer service workers are among the lowest paid groups at
Virgin Money, and most of the customer service workers are women.
(07:52):
That's why, even though Virgin Money has a female CEO
and it openly celebrated this new gender pay reporting law
and wants to be at the fourth of women's equality,
the company ended out reporting a thirty two gender pay gap.
Here's their CEO, Jane A. Gardia. The reason that we
report gender pay gap for thirty two is that although
(08:12):
I'm you know, we have a female chair, female CEO,
and we've got female representation on our EXCO at our
next senior levels of management, we are about male and
our customer services brilliant staff are predominantly female. And so
when you add up everybody's salaries and divide the male
(08:34):
and the female salary, then you get the thirty two
percent pay gap. And that's why I still think numbers
are important, because our objective is to get to fifty
fifty throughout the organization, and that means recruiting more brilliant
men to be fabulous customer service agents and recruiting more
brilliant women to be you know, in all layers, if
(08:54):
you like, of the hierarchy of management, and at that
point our gender pay gap will be equal. When I say,
Virgin Money wanted to be out front in the fight
for women, here's an example. They reported gender pay figures
a year before they legally had to revealing their pay
gap for twenty sixteen. Back then the number was even
(09:14):
bigger thirty six. So here was Virgin Money trying to
do the right thing and be transparent about their numbers
before they technically had to, and their numbers have not
been making them look good, and women weren't moving up
into the higher ranks from customer service rolls. The customer
service segment accounted for about half its gender pay gap.
(09:36):
Here's why Sarah, the customer service worker at Virgin Money,
thinks things ended up that way. I think customer services
has has historically been a female thing. Um, so you've
probably got the forty fifty years worth of female experience
in that area. We work all sorts of shift patterns
(09:57):
of virgin and and and I mean that might lend
it that actually might lend itself to women more because
historically and we have got a we culturally have more
of an issue where there is still a view that
the woman is the caregiver. And so if if a
man returns to a full time and a woman needs
(10:19):
to fit to it, I was around that she will
go for a business who offers flexible working. Jana and
Guardia says getting their gender pay gap from thirty down
to is a start, but she acknowledges they've got a
lot of work to do. Remember, going to a number
of organizations and broadly forty year old white men saying
(10:39):
to me, when you're trying to take my job and
my son's job away from me. And the point is
that we have to give ourselves time to my progress
because we're not in the business of firing men. It's
about making sure that every time there's a new job advertised,
we've got diverse job lists to choose from. It's about
making sure that in the organization people are understand that
(11:01):
um everybody is filled with unconscious bias. Virgin Money is
working on changes that will get more men into customer
service jobs and more women into executive positions. The bank
offers flexible hours across the company and looks at job
applications blind to try and reduce the chances of gender bias.
But a big part of their work, maybe even bigger
(11:22):
than getting more women into executive roles, is going to
be getting more men into customer service jobs. And I
think that's really important because it means that you have
to change some attitudes of men. You know, sometimes men
think I don't want to go into a customer services job,
you know, I want to go into a different role.
But actually that's the way I think that in financial
(11:43):
services organizations, men and women can make a lifetime career
that's going to be successful. It's going to be full
of integrity, and it's going to mean that they can
grow to be whatever they want in in the businesses
of the future. What Virgin Money is going through this
(12:04):
very public realization that they've put more men at the
top and more women at the bottom of their company.
That's happening to a lot of companies in the UK
forced to open up their pay gap numbers. Thousands of
businesses are facing an uncomfortable truth and they have to
figure out how to explain these numbers to the whole country.
(12:26):
Some companies tried to massage the data to make their
numbers look a little bit better. Earlier this year, it
came out that some accountancy firms and law firms didn't
include partners in the numbers the highest paid tears in
their firms. What they were doing was legal. The government
had said it was okay to report this way, but
when people found out businesses were leaving partners out of
(12:48):
the equation, their outrage forced a number of companies to
restate their figures. Then there are the companies that didn't
report in time for the deadline, even though they had
to buy law. About fifteen hundred businesses missed the April cutoff.
In theory, a company can face an unlimited fine for
not reporting, but we don't yet know how easy this
(13:11):
will be to enforce and how much companies who don't
comply will really have to cough up. But for most companies,
what the reporting did was to force them to look
closely at how their businesses were structured and why women
often seemed to drift to the bottom of that structure.
I mean, one classic thing was Ryanair, where there's a
(13:32):
pay gap and they were saying, well, it's obvious we've
got seventy percent pay gap because all the men of
pilots and all the women are serving the drinks. But
they've got a global pilot shortage. Why don't they train
some more women as pilots. That was Harriet Harman. She's
a British politician and she's also the reason this big
new law exists. Ryanair, the company she was just talking about,
(13:56):
says that they've seen an increase in applications from female
pilots and are quote committed to developing this welcome trend.
Harriet is not surprised by the big gaps and companies
are reporting. Her third or six year long political career
has been a lesson in how the different roles are
for men and women in every industry, including government. When
(14:17):
she was elected as a Member of Parliament in only
three percent of British politicians were women. It seemed like
women were blocked from lots of areas of British politics.
Harriet was like a one woman wrecking crew, breaking through
those blockades one by one. She was the first UK
female Solicitor General for American listeners, that's basically the equivalent
(14:39):
of the Deputy Attorney General, and also the first Minister
for women, a role that had never existed before her.
It was her job to make policy about issues like
women's rights. One of her crusades has been gender paid transparency.
But to a lot of politicians, this idea of forcing
companies to state their pay gaps, it was just too radical.
(15:01):
I was a bit on my own arguing for transparency
for pay transparency, but I felt it would put the
power in women's hands if they could actually see what
was going on, if the veil of discrimination was torn off,
because what had been happening for years is the National
Statistical Office would be reporting the overall figure of the
pay gap, and every organization they'd go, oh, tucked up,
(15:25):
isn't that awful a pay gap? We're so against? That
must be happening somewhere else. We'd never have it here.
But of course it always was happening here. Harriet realized
that without widespread support, the only way she'd ever get
the law through was to go step by tiny step.
The first step was to introduce an imperfect solution, make
(15:47):
the program voluntary. Companies could make their pay figures public
if they chose. Even getting government to do that, create
a system for companies to report their pay gap if
they wanted to was controversy. Show we had such a
fight down to the wire. It was the very last
piece of legislation that got through before the general election,
(16:08):
which we then lost. But I didn't manage to get
the bill through until the literally the last day. In
two thousand and ten. Companies did not jump to publish
their pay figures because the reporting was voluntary. Every business
worried about sticking their neck out if they didn't have to.
So by Tift, five years after the voluntary solution was
(16:29):
put into place, only five companies in the whole country
had reported their numbers. Clearly, making reporting optional wasn't working,
but politicians couldn't agree on making reporting mandatory either. Vince Cable,
seventy five year of British political icon and leader of
the Liberal Democrats party, was Business Secretary by this time.
(16:52):
He says his political opponents were really resistant to forcing
companies to report. Here he is describing how they put it.
The argument feels as well, what is it going to
tell us because men and women are doing different geomaty
is measuring like for like. But of course, as we know,
that raises the basic question about why are there and
(17:15):
women doing different roles. In the end, it wasn't even
Harriet or Harriet's party who made the reporting mandatory. A
coalition government had taken power after Harriet's party Labor, was
voted out, and basically what happened was that the left
wing party of that coalition pressured the right wing to
make a campaign promise when it was trying to get reelected.
(17:38):
When they were reelected, it was the right wing Conservative
party who had to make good on their promise and
ended up forcing companies to reveal their gender pay gaps,
and that's where the UK is now. It took years
for a mostly male government to decide that companies should
even be asked to state what men and women make,
and even now that the numbers are out, there was
(18:00):
still seeing companies try to make their numbers better without
paying women more, or failed to report or not adequately
explain why women end up in the low paid jobs
and men in the high paid ones. Given how long
it's taken us to get to this point, I asked
Harriet how long she thinks it should take the country
to close its gender pay gap. These are things that
management can change if they want to, And therefore I
(18:23):
think that women have waited long enough and endured unequal
pay long enough. If you try and add together all
the costs that women have borne by an equal pay,
it is untold billions. So I would say sooner rather
than later, I think women have fed up with waiting
for equality. We don't know yet how much there will
(18:52):
affect the pay gap in the UK. Its main purpose
is to diagnose the problem. It's up to companies to
look at their number and decide what, if anything, they're
going to do. But in another European country, there's a
new law that's getting a lot of attention. It compels
companies to do something about the pay gap. Iceland, like
(19:12):
the US and the UK, passed equal pay and anti
discrimination laws decades ago. The anti discrimination law has been
strengthened four times since nineteen seventy six, and the country
has also passed laws requiring an equal number of men
and women on company boards. But despite all of this,
Iceland still has a pay gap of about sixteen percent,
(19:35):
so this year it doubled down. While the UK has
been looking at the average pay difference between men and women,
Iceland has passed a new law focused on men and
women who hold the same job. Claire Setteth reports starting
this year, companies with more than twenty five employees have
to submit to the government official salaries for every job
(19:59):
and and if one employee is making more than another
who's doing his or her exact same job, a company
has to justify that discrepancy in writing. My name is Rosa,
maybe because of those long surnames mean we use giving
names in Iceland, so you can call me Rosa. But
(20:20):
I'm the head of the Equality Unit at the Ministry
of Welfare and in Iceland. Rosa is in charge of
this big new salary law and the experiment the country
ran to see if it would even work. In two
thousand eight, Iceland launched a pilot version of the law
with real businesses to see what worked and what didn't.
(20:43):
One of the businesses that participated was Iceland's Customs office,
where men tended to be in field jobs and women
worked in the office. Those field jobs they paid better,
so custom officers working out in the field, for example,
are of the cases made. And they had had the
(21:09):
unwritten rule that those men could return to the headquarters
when they were close to their retirement aids and just
do ordinary office work. But then they were sitting and
sharing offices with women that were working as secretaries and
(21:31):
the equal past and that is based on the rule
of paying equally for jobs of equal value. So employers
needs to ask those questions, what are we paying for?
You know, what value has this job for the company?
Here were men working alongside women doing the same jobs,
(21:52):
and because of their field job salary histories, the men
were getting paid more under this new law. The customs
are has had to explain that to the government, and
Iceland decided that If the only reason you're paying one
employee more than another is that he's an older man
close to retirement, well that's not a good enough reason.
(22:12):
The Customs Office volunteered to be part of this experiment,
they didn't necessarily think they'd find much of a paid discrepancy.
Rosa says that a lot of companies were in this boat.
But many employers set that at the beginning, we are
not discriminating in our company. But in many cases they
(22:33):
found out that their workplaces were just astenti biased as
any other, and that there were in some cases discriminating
against individuals. I didn't know, and I don't think that
people decide that they are going to discriminate against people,
or that they're going to pay this guy or this
(22:57):
woman more or less than the colleagues. It's something that happens.
When companies discover a pay gap like this, they're required
to fix it. They can give people raises or even
make pay cuts, but essentially they have to bring people
in line with the stated salary for their job. To
(23:18):
be clear, this new law is just one small part
of Iceland's pay gap strategy. In fact, Rosa isn't really
sure why Iceland's getting so much pressed for it. We
are getting a lot of attention for the work we
are doing. It's it's unbelievable, you know, because I've been
around since in this field, since twenty years or for
(23:40):
twenty years, and I mean, we have never had this
attention for the policy field. Here's something incredible about Iceland
in any given year between forty and Parliament is women.
The reason Iceland has been able to tackle this issue
is that women have enough power to be able to
make the changes they want. In fact, this whole focus
(24:03):
on workplace equality got started because in whopping of the
country's women went on strike from their jobs, from child
care and chores at home to protest their mistreatment. In
(24:26):
Iceland was the first country in the whole world to
democratically elect a woman as head of state. All those
women have helped get these laws passed. Even with all
these changes, closing Iceland's gap is taking an awfully long time.
They still have that six percent pay gap, and once
you account for the differences in the types of jobs
(24:48):
men and women hold or hours worked, six percent of
that gap still persists. A decade ago, it was eight
but at this rate it's going to take another thirty
years to get it down to zero. Politicians have learned
from experience that genter equality doesn't come about on its
(25:09):
owner court. They need to push things and um. They've
also learned that if they will wait on the normal
poses legislative chances, they can wait forever. The fact that
even in Iceland, where so many laws are already on
the books to narrow the pay gap, where so many
women are making the laws, there's still a sixteen percent gap.
(25:33):
So as you just how hard it is to get
to true equality. Iceland wants to eliminate its pay gap
within the next five years. But that gap is the
results of generations of traditions and habits and beliefs that
we've held about women and men's place in society. That's
something that can't just be fixed with a few raissa.
(25:59):
Iceland had a magic ingredient to getting laws passed a
lot of women lawmakers. The United States isn't tackling the
pay gap on the same national scale as Iceland and
other countries, but that could change. A record number of
women in the US declared they were running for office
in If those women win, who knows they might look
(26:23):
to Iceland for inspiration, but that's a lot of ifs.
For now, most of the effort to close the pay
gap here isn't happening on the federal level. Next week
we'll find out what happens when it's up to companies
and not the government to fix pay inequality. Thanks for
(26:44):
listening to another episode of The Paycheck. If you like
the show, please head on over to Apple Podcasts or
wherever you listen to rate, review and subscribe. The show
was reported by Susie Rings Claire Setteth and hosted and
reported by me Rebecca Greenfield. It was edited by Chessca
Levie and produced by Magnus Hendrickson. We also had helped
from Jillian Goodman, Janet Paskin, and Liz Smith. Our original
(27:08):
music is by Leo Sidron. Carrie Vanderyott did the illustrations
on our show page, which you can find at Bloomberg
dot com Slash the Paycheck. Francesca Levie is head of
Bloomberg Podcasts.
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