A fairer Scotland for women: gender pay gap action plan

Introduction

As an open economy, trading with the world, Scotland faces into many of the same significant labour market challenges being experienced across the world. These are likely to continue and indeed accelerate in the years ahead. New and emerging technologies are revolutionising how we are able to engage with work and are likely to fundamentally change many of the jobs we currently do. Allied to this, societal changes mean that Scotland is becoming a more diverse and equal society with a growing thirst for fairness.

While we cannot fully predict what the labour market of the future will look like, we do know that Scotland has huge economic potential. We are well placed to take advantage of the economic opportunities that come from our established strengths in innovation and technological change. Our Economic Strategy sets out our vision for sustainable and inclusive growth. Growth that boosts competitiveness while tackling inequalities and delivers for our communities, for the environment, for workers and business. We have an opportunity to take decisive action to release the economic potential of those groups who have traditionally experienced economic inequalities. This will also have an important impact on our commitment to end child poverty. 

One of the biggest and most persistent labour market inequalities we face relates to women. Women consistently experience a range of damaging labour market disadvantages. The main indicator for this is the overall gender pay gap which currently sits at 15 per cent. While most countries have a gender pay gap, the Scottish Government is determined to move beyond narrow and outmoded thinking about the inevitability of the situation and to close Scotland’s pay gap. This action plan is part of a range of labour market action plans designed to lay out meaningful steps to address inequality in the labour market. 

To systematically identify short, medium and long term actions that relate to key stages in a woman’s life, the Scottish Government has worked with a wide range of stakeholders. This action plan should be regarded as a starting point to a long-term commitment to address the challenges women face in the labour market as a central element of our approach to achieving inclusive economic growth. 

It is well understood that equality for women and the gender pay gap are not solely economic issues. However we are looking to ensure that we mainstream these issues within economic policy as well as in those areas of social policy where they have more traditionally resided. We are doing this for two reasons. First, it is unacceptable that in the 21st century women are still disadvantaged in the labour market. Second, our economic potential as a country cannot be fully realised if we do not draw effectively on the talents of women and share the benefits of success more fairly across the genders. This makes good business sense as well as being a fundamental part of a civilised modern society.

While these conclusions should cause us all to feel uncomfortable and angry, we must channel that emotional energy into taking decisive and co-ordinated action. This action plan is a start to that process. We hope it will begin a long-term, sustained movement involving women, men, employers, trade unions, schools, colleges, universities, public bodies and all levels of government to tackle head on the causes of the gender pay gap in Scotland.

Summary of the issues facing women

Addressing the gender pay gap is a key element of delivering inclusive economic growth and in helping to tackle child poverty. This requires different decisions to be made.

There remains a lack of intersectional^[2] data to help ensure that the needs of women in Scotland are considered in the development of policy.

The distribution of unpaid care remains heavily skewed toward women, in particular towards working age women. There is also a direct correlation between the number of hours spent caring and living in areas of multiple deprivation^[3]. In the best performing countries, in terms of gender equality, the gender balance in providing care is more even. We know that flexible employment practices aimed at supporting carers who juggle work and caring responsibilities can play a large role in supporting this.

Availability of high quality, affordable, and flexible childcare is a central factor in enabling women to participate fully in the labour market. 

Societal attitudes are key influencers on behaviours and from an early age, impact upon and shape the attitudes of girls and boys with respect to career options for women. 

Subject choice at school is a key determinant of career choice. Subject choice is often skewed by gender with boys more likely to make subject choices which lead to a wider range of better paid jobs. 

Despite some progress in recent years equality education, with a focus on the workplace, is still not a prominent element of Scottish education. While this cannot be expected to overcome all of the wider influences on children and young people’s attitudes to gender stereotyping, it is an opportunity to equip them with the ability to form their own views.

Workplace and educational environments which tolerate harassment and violence against women narrow women’s study and occupational choices and constrain their career ambitions.

Women are heavily over-represented in occupations which tend to be lower paid and undervalued compared to those which are male dominated. For example, 38.5% of women in employment work in low pay occupations^[4] compared to 20.6% of men. This equates to 1 in 3 women and 1 in 5 men.

Women are many times more likely than men to take career breaks. Many who do, tend to find it difficult to re-enter the labour market at levels commensurate with their skills and experience. 

More women are likely to work in part-time employment, 45% of women in employment work part-time, compared with 13% of men. They are also more likely to be in jobs which are more precarious.

The limited availability of good quality part-time jobs has an impact on the types of jobs women undertake and the level to which they progress.

The gender pay gap varies by geography with women living in islands and remote rural local authorities experiencing a higher gap than those living in mainly rural local authorities. It is also wider in Local Authorities with substantial urban populations than in more rural Local Authorities. In addition, women living in islands and remote Local Authorities experience much higher volatility in wages. In the years between 2012 and 2018 the hourly gender pay gap varied between 0 and 20%, but has fallen back to 4.5% in 2018. Reasons for the more volatile gender pay gap in the islands and remote Local Authorities are likely to include the underlying fragility of the local labour market where there are limited opportunities to adjust to changing economic circumstances. These trends are furthered by a reliance on employment in low paid, seasonal or unpredictable sectors such as accommodation and food services (including tourism-related activities) and higher levels of part-time working. Reduced mobility and lack of formal childcare are also more common in remote rural Scotland^[5].

In general women with additional protected characteristics (including disabled women, minority ethnic women and older women); living in areas of multiple deprivation; and those caring for sick and disabled relatives tend to experience greater labour market inequalities. 

Women suffering domestic abuse are more likely to have interrupted and constrained careers.

While occupational segregation by gender is a significant driver of the gender pay gap, it is not the only one. Even when women and men enter the labour market on an equal basis in the same professions, pay gaps quickly emerge.

Employer practices, such as differential access to training and biased and non-transparent promotion procedures, can often disadvantage women at different career stages.

The rate of women involved in starting or running their own business is much lower than that of men.

Analytical Summary

To complement the Gender Pay Gap Action Plan we have published an analysis of the actions contained within the Plan. This analysis is presented as a logic model which sets out the main causes of the gender pay gap and examines how the policy commitments in the Plan can be expected to impact the gender pay gap, while also considering gender equality more broadly along with its intersectional dimensions. A copy of this analysis can be found at https://www.gov.scot/publications/fairer-scotland-women-gender-pay-gap-action-plan/analytical-annex/

Implementation Statement 

We have established a Fair Work and Gender Equality Ministerial Working Group. Led by the Minister for Business, Fair Work and Skills and whose membership consists of Ministers whose portfolios link into both the Fair Work and Gender Pay Gap Action Plans. The Ministerial Group will drive a more strategic and embedded approach to fair work and gender equality across portfolios. The remit of the Ministerial Working Group includes galvanising action to drive forward a cross-portfolio approach to tackling the causes of the gender pay gap.

A Scottish Government Fair Work Champion will be appointed to promote Fair Work across Directorates within the Scottish Government. Furthermore, each Directorate will be asked to develop Directorate-level Fair Work Action Plans, which set out the actions that are currently being taken or planned to mainstream Fair Work into policy areas and activities specific to the Directorate, and to develop a strong Directorate-specific Fair Work narrative.

The Scottish Government Fair Work Champion and Directors will be supported by a Fair Work and Gender Equality Officials Working Group.

Monitoring and Evaluating the Impact of the Action Plan

The Fair Work and Gender Equality Ministerial Working Group will provide a challenge function to the action that is being taken. The Scottish Government will also undertake to provide the Scottish Parliament with annual reports on progress in reducing the gender pay gap via the Economy, Jobs and Fair Work Committee. 

We will measure the impact of this action plan across a range of indicators and measures which we will publish separately.

Acknowledgements

We have many people to thank in helping to shape the development of this action plan. First, we acknowledge the many individuals and organisations that participated in the policy discussion sessions and voices events. The valuable contributions of all who participated are reflected in our Plan. 

Thanks go to members of the Gender Pay Gap Working Group for their contribution towards the development of actions within this Plan. Additional thanks to Close the Gap and Engender who led in providing detailed background discussion papers for the eight themed stakeholder workshops. These papers offered challenge to policymakers working across the Scottish Government and significantly helped in the development of recommendations which shaped this Plan. We would also like to thank Professor Alan McGregor for his contribution to the facilitation of these workshops.