Pay gaps arise when people from a certain group are paid considerably less than their peers. The most commonly discussed type is the gender pay gap. However, salary inequality occurs in more forms than just one.
Gender
The discrepancy between male and female salaries has been a historical issue. Already in 1963, a US study revealed that women earned 44% less compared to men. Ever since, more awareness has been created surrounding the topic. Still, in 2016 another US study revealed that a woman on average still receives 18% less than a man. In the EU, data from 2020 show an average pay gap of 13%. Interestingly, in both cases the wage inequality is greater for part-time workers as opposed to full-time employees. There are some explanations as to what causes this issue. Firstly, there are more women working in low-skilled jobs (such as cleaning, catering, caring jobs, etc.) where the salary is generally lower. Secondly, on average, women spend less time doing their job, to balance it with childcare. However, in general, women also earn less even when they are hired for the exact same job as men. This demonstrates that discrimination – whether it is intentional or not – is still very present.
Socio-economic background
Another type of income inequality is based on people’s social background, which relates to one’s income, education, occupation and social background. A recent study, which analysed salary data from 2014 until 2021 in the UK, revealed that people from a working-class background earned 13% less on average, compared to their peers. The authors Prof. Sam Friedman and Dr. Daniel Laurison published “The Class Ceiling” in 2019, in which they state that when difference such as an expensive education or how hard someone works are adjusted for, a persistent gap is clearly demonstrated. Therefore, it can be concluded that a privileged background has a strong influence on someone’s salary size. This is a topic that has often been excluded from equality and diversity debate.
Ethnicity
This form of pay gap appears when the average pay of staff members from an ethnic minority background in a workforce is less than their ‘White’ peers. Data from 2021 displays an average ethnicity pay gap of 25% across all ethnic minority groups in the UK (https://www.lawsociety.org.uk/topics/research/race-for-inclusion-the-experiences-of-black-asian-and-minority-ethnic-solicitors). This demonstrates that for example a Black or Asian person earns on average only 75% of a White person’s salary. Again, discrimination might play an important role to cause this inequality, even though recent legislation, such as the Equality Act in the UK, should prevent this from happening.
Disability
Finally, also disabled people earn on average less compared to their peers. UK data from 2021 reveal a pay gap of 13,8% between disabled and non-disabled people. This demonstrates that, on average, a disabled person will receive 86,2% of a non-disabled’s salary. Alarmingly, this pay gap has increased since 2014 (11,7%) by almost 20%. Many factors may lay at the root of this problem, such as job characteristics – with disabled people often graduating with a lower education compared to non-disabled people – or work experience – disabled people are more likely to spend time out of the labor market due to health reasons. However, it is believed that discrimination still plays a very important role.
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