UK gender pay gap widens as childcare costs worsen ‘motherhood penalty’

The UK’s gender pay hole has widened as sharp will increase in the price of childcare has worsened a “motherhood penalty”, pricing many ladies out of labor altogether, based on a brand new report.

The nation’s common pay hole widened by 2.4 share factors to 14.4 per cent in 2021, accountancy big PwC present in its Girls in Work index.

It signifies that the hole between what the typical man and the typical girls is paid in hourly pay has obtained greater, indicating UK corporations have taken a step backward in terms of gender parity.

On the fee the pay hole is closing, it can now take greater than 50 years to achieve gender pay parity, PwC mentioned.

Moreover, the UK dropped 5 locations within the agency’s annual index of ladies’s employment outcomes, throughout 33 nations which might be members of the Organisation for Financial Co-operation and Growth (OECD) and included within the evaluation.

The UK stood in 14th place in 2021, down from ninth place in 2019, that means that in addition to the pay hole, indicators like the feminine labour power participation fee has declined and extra girls have turn into unemployed.

World wide, progress in direction of gender equality in work was set again by no less than two years by the influence of the Covid pandemic, the report discovered.

Covid, childcare and the gender pay hole

Girls’s employment losses from Covid have been comparatively worse than males’s.

Furthermore, childcare prices have risen dramatically within the UK since 2015 whereas wage development has slowed, PwC mentioned.

Common nursery prices per week rose by greater than a fifth between 2015 and 2022, whereas common weekly earnings rose by 14 per cent.

And internet childcare prices represented virtually a 3rd of the revenue of a household on the typical UK wage, in comparison with as little as 1% in Germany.

It signifies that girls have born the brunt of upper childcare prices in terms of their careers, the report steered.

Larice Stielow, senior economist at PwC, mentioned: “The motherhood penalty is now probably the most important driver of the gender pay hole and, within the UK, girls are being hit even more durable by the rising price of residing and growing price of childcare.

“With this and the hole in free childcare provision between ages one and three, extra girls are being priced out of labor.

“For a lot of it’s extra inexpensive to go away work than stay in employment and pay for childcare, particularly for households at decrease revenue ranges.”

Alongside extra inexpensive childcare, societal attitudes about gender roles have to shift to be able to sort out the motherhood penalty, the evaluation steered.

It discovered that fathers taking extra paternity depart may pave the best way for extra girls remaining in full-time employment within the UK, subsequently bettering its total rating within the index.