Social science research informed the introduction of the National Living Wage in 2016, raising the wages of over 1.5 million poorly paid UK workers.
Summary
It is widely acknowledged across the globe that a substantial and persistent earnings gap exists between men and women. This leads to women earning less over the course of their lifetimes and as result also impacts their pension.
Research conducted by Professor Karen Mumford CBE and Professor Peter Smith in collaboration with the Low Pay Commission on wage inequality and the gender pay gap directly informed the introduction of the National Living Wage in 2016, increasing the wages of over 1.5 million workers.
Informing a National Living Wage through tackling the gender pay gap
“The implementation of the National Living Wage from 2016 has had a significant impact. Already in 2019, the main adult minimum wage rate is estimated to have been 7 per cent higher than if the NLW policy had not been introduced. This has a particularly big impact on women, who comprise 3 in 5 workers paid at (or below) the minimum wage. Karen’s [Mumford’s] previous work and related involvement in this project contributed towards this very real achievement.”
Chief Executive Resolution Foundation, 2020
The challenge
It is widely acknowledged across the globe that a substantial and persistent earnings gap exists between men and women. This leads to women earning less over the course of their lifetimes and as result also impacts their pension. Although the gender pay gap has been decreasing slowly over the last 20 years, in April 2023 the median pay for all employees in the UK was 14.3% less for women than for men according to the Office for National Statistics.
In order to reduce overall wage disparities between men and women part of the solution is to improve the pay of low paid workers, especially women. Each year the Low Pay Commission advises the UK Government, based on research, about the National Minimum Wage and National Living Wage, ultimately informing the UK Government of the national wage policy they will implement in the coming financial year.
The research
Professor Karen Mumford CBE and Professor Peter Smith have worked extensively to understand and highlight the relationship between the workplace, occupational segregation, low pay for women and the gender wage gap to policymakers.
Their initial research analysed Workplace Employment Relations Survey (WERS) data from 1998 and 2004, which is a nationally representative sample of workers and workplaces across sectors in the UK, and, for the first time, provided evidence that a national gender pay gap of 11%, on average, existed in workplaces and occupations. Further work into the significance of full time and part time employment on the pay gap using the 2004 WERS data, further cemented a gender earnings gap between male and female employees for both full time and part time workers.
Drawing on this previous research, Karen and Peter worked with the Low Pay Commission (LPC) to examine Annual Survey of Hours and Earnings (ASHE) data from 2004-2015, along with data from WERS to understand the contribution of occupational and industrial segregation to low pay, comparing men and women across both full time and part time working.
They found that gender pay gaps were reducing over time, particularly for part time workers, but that disparities remained, suggesting that the equal pay legislation in the UK at that time was not fully effective and that further complementary policies were needed.
Hear more from Karen on her work on the gender pay gap in this video from the University of York.
The impact
This work directly influenced the introduction of the National Living Wage (NLW) legislation in 2016, which was awarded to over 1.5 million workers aged 25 and over.
The Low Pay Commission continues to regularly review the NLW and makes recommendations to the UK Government concerning this and national minimum wages. Karen and Peter’s research continued to inform the LPC on the gender pay gap and has supported in further informing policy in this area, including in the implementation and further adjustments of the NLW, increasing its reach and effectiveness.
In 2018, following LPC recommendations of increasing the coverage of the NLW, some 1 million women and over 600,000 men received an increase in their wages. The Resolution Foundation suggested that the introduction of the National Living Wage in 2016 meant that the adult minimum wage in 2019 was an estimated 7% higher than if it had not been introduced, and that this was especially impactful for women who comprise three in five workers paid at or below the minimum wage.
Karen and Peter’s research has been included in training for government policymakers to support in increasing understanding of low pay across the community.
Based on this record of research and impact, Professor Mumford was appointed to the NHS Pay Review Body in 2020.
“Gender equality is an extremely important policy area. The Public Sector Equality Duty reinforces that. Professors Karen Mumford and Peter Smith’s research contribution has also made a very considerable impact in terms of its reach and significance across government, including BIS (now BEIS) and various bodies responsible for equalities, such as the Government Equalities Office and the Equality and Human Rights Commission.”
Chief Economist and Deputy Secretary Low Pay Commission, 2020