You are using an outdated browser.
Please upgrade your browser
and improve your visit to our site.
Skip Navigation

What the U.S. Can Learn from Britain on Equal Pay

On Equal Pay Day, a look at the UK's giant data collection effort.

Library of Congress

The United Kingdom is in the midst of a massive social experiment. The country’s large employers had until last week to publish data for the first time on their gender wage gaps, including the difference between male and female employees in base compensation and bonuses, as well as the gap in each pay quartile. The dataset is in no ways perfect. But it has revealed how far we have to go in fixing pay inequities on both sides of the Atlantic.

The UK’s requirement is one of the first countrywide attempts at using public transparency and accountability as a bludgeon against the stubborn gender wage gap. So far the effort has revealed that 78 percent of companies pay men more than women, and that that women make less in every single sector. Some of the gaps are staggering: Ryanair, the discount airline, pays men about 72 percent more, for example.

Researchers seeking answers to why pay gaps persist may be frustrated. “If the information is just at the level of a company and not split by job category,” said Amalia Miller, economics professor at the University of Virginia, “then it is a bit hard to interpret where pay differences come from.” Nor, Harvard economist Claudia Goldin pointed out in an email to me, do these numbers include other factors that generally impact how much people are paid, such as workers’ levels of education, experience, or the hours they work.

Some companies don’t seem to be handing over accurate data, either. With days to go until the deadline, some simply entered zeroes in every field, while others reported mathematically impossible numbers or removed certain employees from the calculations. Another 1,500 missed the deadline completely.

But obvious trends still emerge from the imperfect dataset. For example, women appear to do worse in high-wage sectors because there is such a wide distribution of pay: some people making top dollar, others making very little. Pay in low-wage sectors, on the other hand, is clustered close together at the bottom for everyone. So gender wage gaps will be bigger in high-wage industries, even if “in absolute terms [women] do much better than in the low wage sector,” Goldin said. “This is something we already knew, but it is nice to see it play out in these data.”

And the sheer size of the data dump has shined a blistering spotlight on the fact that women, on the whole, make less than men in basically any company you can point to. “Across the UK a whiff of revolution is in the air,” The Guardian reports. A New #PayMeToo campaign from female political leaders, piggybacking off of the #MeToo movement, urges women who work at companies with gaps demand they be closed. “If you have a gender pay gap you should expect to be challenged to address it and held to account if you try to stop your staff speaking up, whether by trade unions, women’s networks or parliament,” said Labour MP Stella Creasy.

From across the water, as the U.S. commemorates yet another Equal Pay Day to mark how far into 2018 women had to work to catch up with what the average man made last year, even these first steps towards pay equity can seem ambitious. In 2016, President Obama proposed requiring large companies to report pay scales, broken down by gender and race, to the federal Equal Employment Opportunity Commission. Unlike the Brits, American companies wouldn’t have been required to publicly post potentially embarrassing data on how much less they pay women. The data would have stayed at the EEOC, allowing the agency to then identify companies that might be paying women unfairly. But last summer, President Trump announced he would abandon even this half-measure, saying it placed too large a burden on businesses.

While the U.S. has retreated from transparency, the rest of the developed world seems to be gravitating toward it. German workers are now entitled to get information on what their coworkers make, and Australia recently decided to require most companies to report gender pay gaps. French Prime Minister Edouard Philippe has proposed fining companies that don’t close unjustified pay gaps within three years. Iceland took the boldest step by requiring companies to prove that they pay men and women equally and face penalties if they don’t. The UK doesn’t go that far—companies face no legal or financial penalties for reporting gaps, even if they don’t shrink year to year.

But its data do show us that gaps exist. That might not sound profound, but reports on UK employee compensation have outed some American companies that have been tight lipped here in the United States.

Google UK, for example, reported that female employees in the UK make an average 17 percent less than male ones and 16 percent less at the median. Its report also showed that women make up half of its lowest-paid employees but less than a quarter of the highest-paid ones, as well as the fact that women’s bonuses are, on average, 43 percent lower than men’s.

And yet Google has tried to claim that it has no pay gap between men and women here in the U.S. The Department of Labor, which must audit government contractors to ensure that they pay men and women equally, in 2016 found “systemic” disparities that one official called “quite extreme.” But when the department requested a full set of data to better assess the situation, Google, the king of data, refused to hand it over. Instead it said it had no pay gap based on its own analyses of its compensation—analyses it refused to make public.

The data it handed to the British government is not the same as what the Department of Labor wanted to see. It doesn’t include a full breakdown of who makes what where and why. But it does expose the problem with Google—and other tech companies—claiming its own secret analyses prove there is no pay gap. There are ways to control for every single potential factor such that wage gaps disappear, especially if you have no one looking over your shoulder.

Three former employees accused Google in a class action lawsuit last year of “systemically paying [women] lower compensation” not just by paying women less when they have the same jobs and skills, but also by pushing them into less lucrative positions that have fewer paths to advancement. And that’s at least one lesson from the UK’s new database: women across the board are clustered at the bottom of the pay scale, likely because they so rarely make it into leadership and earn the highest salaries.

Now that companies have reported their numbers to the UK government, British women are left with the decision of whether and how to take action. The experiment will keep running its course as we all wait and see what kind of effect public transparency actually has on underpayment. But here in the U.S., transparency remains out of reach.