New research from PWC says ‘it will take more than 50 years to reach gender pay parity’ – but does this present an opportunity for the insurance sector to use its financial acumen and resources to accelerate this timeline?

By Jon Guy

As the world celebrated International Women’s Day yesterday (8 March 2023), a global report has highlighted how the UK is failing its female workers.

On 7 March 2023, PricewaterhouseCoopers (PWC) published its Women in work index and Global empowerment index – these pieces of work explore gender focused matters affecting the global workplace.

Jon Guy

Jon Guy

The Women in work index outlined female workforce participation across 33 countries involved in the intergovernmental Organisation for Economic Co-operation and Development (OECD), based on a survey of 22,000 women.

This found that the UK had recorded a decline in women’s employment outcomes in 2021 – its international ranking therefore fell five places, from 9th to 14th.

PWC identified a significant widening of the UK’s gender pay gap by 2.4 percentage points to 14.4% in 2021 - four times the average increase recorded across the OECD as a whole.

It seems that since the Covid-19 pandemic, the UK’s progress towards gender pay parity has been reversing – PWC found that the UK female labour force participation rate fell 0.4 percentage points between 2020 and 2021, during a time of labour market recovery across the OECD.

The rising costs of childcare threaten to make these results even worse, with more women being priced out of work altogether if they also have caring commitments.

The slight fall in the female labour force participation rate and a worsening gender pay gap meant the UK’s absolute index score declined by two points in 2021 and led to a relative fall to 14th in PWC’s OECD ranking compared to 2020.

Motherhood penalty

Larice Stielow, senior economist at PWC, warned that the prospects for a female entering the workforce are bleak.

“An 18-year-old woman entering the workforce today will not see pay equality in her working lifetime,” she said.

“At the rate the gender pay gap is closing, it will take more than 50 years to reach gender pay parity.

“If the rebound from the pandemic has taught us anything, it is that we can’t rely on economic growth alone to produce gender equality - unless we want to wait another 50 years or more.

“The motherhood penalty is now the most significant driver of the gender pay gap and, in the UK, women are being hit even harder by the rising cost of living and increasing cost of childcare.

“With this and the gap in free childcare provision between [the] ages [of] one and three, more women are being priced out of work. For many, it is more affordable to leave work than remain in employment and pay for childcare, especially for families at lower income levels.”

While PWC does not provide a breakdown of its results across each business sector, financial services as an industry undoubtedly has more to do.

It has the opportunity to take the initiative and seek to use its economic clout to reduce the gender pay gap and create a more compelling story for its female workers - both now and in the future.