Study of the Gender Pay Gap at Sectoral Level in Ireland

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1 Study of the Gender Pay Gap at Sectoral Level in Ireland Prepared for The PPF Consultative Group on Male/Female Wage Differentials By International Economic Consultants December 2002 Copyright. No part of this document may be used or reproduced without s express permission in writing.

2 Contents Page Executive Summary 1 Introduction and Background 1 Background and Terms of Reference 1 Methodological Approach to Assignment 3 Structure of Report 6 Acknowledgements and Disclaimer 7 2 Review of Previous Research on Gender Pay Issues 8 Overview of Existing Research 8 Conclusion 15 3 Recent Trends in the Gender Pay Gap at National Level 16 National Gender Pay Trends 16 Trends in Gender Employment at National Level 22 Factors Influencing Gender Employment and Pay Conditions 28 Summary of Conclusions 30 4 Review of the Retail Sector 31 Analysis of Gender Pay Conditions 31 Analysis of Gender Employment Conditions 37 Factors Influencing Gender Pay and Employment Conditions 42 Summary of Conclusions 61 5 Review of the IT, Electrical & Electronics Sector 62 Analysis of Gender Pay Conditions 62 Gender Segregation Characteristics 68 Factors Influencing Gender Pay and Employment Conditions 74 Summary of Conclusions 95 6 Review of the Food Sector 96 Analysis of Gender Pay Differentials 96 Analysis of Gender Employment Conditions 100 Analysis of Factors affecting Gender Pay and Employment Conditions 109 Summary of Sectoral Characteristics 119 i December 2002 i

3 Contents Page 7 Review of the Local Government Sector 120 Analysis of Gender Pay Conditions 120 Analysis of Gender Employment Conditions 127 Factors Influencing Gender Pay and Employment Conditions 132 Summary of Conclusions Conclusions and Recommendations 162 Conclusions on the Gender Pay Gap 162 Cross-sectoral Comparison of Gender Issues 170 Recommendations to Address the Gender Pay Gap 171 Overall Conclusion 196 Annex 1 Copies of Survey Questionnaires 197 December 2002 ii

4 Executive Summary Executive Summary Introduction and Background This report has been completed for the PPF Consultative Group on Male/Female Wage Differentials by International Economic Consultants. The report concerns a study of the gender pay gap at sectoral level in Ireland. While extensive research on the gender wage gap has been undertaken to-date, this has not focused on the sectoral pattern of wage differentials. The Consultative Group has decided to investigate the gender wage gap within specific sectors of the economy and has specified the following sectors as being relevant to the current study: IT, electrical and electronic; Retail; Food; and Local Government. Review of Previous National Research on Gender Pay Issues How Unequal (2000) The current sectoral assignment follows on from the national-level research completed in This research focused on quantifying the gender pay gap at national level in Ireland, identified how the pay gap relates to patterns of labour market participation and proposed a range of policy responses to address the gender pay gap. According to the research based on the Living in Ireland Survey, average hourly earnings of women in 1987 were about 80 per cent of those of average male earnings. By 1994, this ratio had risen to just over 80%, while by 1997 the differential closed further to reach 84.5 per cent. The research found that about half of the total wage gap in 1987 was explained mainly by differences in labour market experience. However, by the 1990s close to three-quarters of the wage gap was explained by labour market factors. The research concludes that the wage paths for men and women cannot be brought closely into line in the absence of a further increase in the labour market attachment of women during childbearing and childrearing years. One approach to achieving this would be through family-friendly working arrangements such as part-time working. The research also highlights the importance of the recent legislation on equality, the internal structure of trades unions and the nature of bargaining with employers in addressing gender employment and pay issues. In addition, the National Minimum Wage is also seen to have assisted in closing the pay gap, though attention must be given to how the minimum wage is up-rated in the future. The need for measures aimed at reducing vertical segregation within the workforce is also emphasised. Finally the report suggested a need for regular monitoring at national, sectoral and firm level, in addition to the monitoring of cases investigated by the Office of the Director of Equality Investigations. December 2002 i

5 Executive Summary Recent Trends in the Gender Pay Gap at National Level It is important to first provide a national context for the sectoral analyses. Our research therefore includes a review of the recent trends in the gender pay gap at national level, in addition to looking at some of the key features of the gender structure of employment and the labour market. We also consider the perceptions of the general public in relation to the factors influencing gender pay inequality. The key findings from our research are as follows: The most recent CSO figures for the average industrial hourly earnings indicator reveal a significant existing gender pay gap at national level, with female average hourly earnings 28.4% below male earnings in June Moreover, while the gender pay gap had narrowed on a continuous basis between 1997 and 2001, the figures for June 2002 suggest a widening of the pay gap. An analysis of Principal Economic Status of persons aged 15+ indicates a much lower proportion of females at work, though there has been an increase in this proportion in recent years. The proportion of females employed in home duties, at 35.1% in 2001, compares with just 0.3% among males. 21.8% of males in employment held managerial/administrative occupations, compared with 11.8% of females. Women are also under-represented in craft and related occupations and plant & machine operative roles. However, it is striking that 23.2% of females in employment worked in clerical and secretarial occupations, compared with just 5.3% of males. There has been a notably higher proportion of female school leavers entering the distribution, professional services and personal services sectors. A substantial gender pay gap remains among recent third-level graduates, though there is a considerable variation depending on study discipline and level of education achieved. Public perceptions indicate that the main factors influencing the gender pay gap are likely to be educational qualifications held, the skills required for particular jobs, the types of jobs held, the number of years of work experience held, the proportion of women applying for senior positions, and the proportion of senior positions held by women. December 2002 ii

6 Executive Summary Review of the Retail Sector The sectoral analysis begins by examining the gender pay and employment conditions prevailing in the retail sector in Ireland. In addition, we investigated the factors that help explain the gender pay gap, including employee characteristics, human resource and work procedures, and recruitment and promotion issues. The key findings from our analysis are as follows: Our consultation programme indicates evidence showing a higher rate of turnover among employees within the retail sector, which may have adverse implications for bargaining and pay entitlements; There has been a strong overall growth in employment in the retail sector, reflecting the recent economic boom; Survey data provides evidence that male employees earn more on average than female employees in the retail sector; The retail sector is heavily female dominated. Moreover, the female proportion of the workforce increased over the period from ; The incidence of part-time working is substantially higher among females in the retail sector (45.6% in 2001 versus 16.8% among male employees); An analysis of occupational breakdown of employment reveals a substantially lower proportion of females in managerial/administrative positions in the sector; Average weekly working hours for female employees in the retail sector are noticeably lower than for male employees, reflecting much higher incidence of part-time working; According to the survey evidence, a much lower proportion (48.3%) of female employees in the sector avail of a pension scheme, compared with 61% of male employees. This, however, may also partly reflect a higher incidence of part-time employment among women; Among females employed in the retail sector, the incidence of lone parenting is a particular issue (16.9% of female employees in 2001 versus 2.6% of males) when compared to the pattern in the other sectors under review and across the economy as a whole, which may discourage females from seeking promotion; and, The available data does not suggest any discernable difference in educational attainment across gender for the retail sector, though a higher proportion of males (7.6%) have degrees than the corresponding proportion of females (4.6%). December 2002 iii

7 Executive Summary Review of the IT, Electrical & Electronics Sector This report also examines the gender pay and employment conditions prevailing in the IT, Electrical, and Electronics sector in Ireland. The principal findings from the analysis are as follows: The IT, Electrical & Electronics sector is a relatively new sector, experiencing very fast growth in recent years; The sector is comprised of a large proportion of foreign owned and nonunionised firms; Survey evidence suggests that male employees earn more on average than female employees in the sector; The latest CSO data indicate that average hourly earnings of female employees in the IT, electrical & electronic sector are between 11-28% below that for males in June 2002; The overall workforce in the sector is largely male-based; There is higher incidence of part-time working among females in sector; Females are under-represented in managerial and administrative occupations and over-represented in clerical & secretarial, and plant & machine operative occupations; The age profile of the female workforce is younger than that of the male workforce; Average weekly hours worked are lower for female than for male employees in the sector; Women in the sector are more likely to take extended leave or be absent from employment due to childrearing responsibilities or illness than their male counterparts; There is a lower incidence of degree level or higher educational attainment among female employees in the sector; There is evidence of poor access by women to flexible and family friendly working arrangements within the sector. December 2002 iv

8 Executive Summary Review of the Food Sector Our analysis of gender pay and employment conditions, and the factors likely to influence the gender pay gap in the food sector revealed a number of key findings, as follows: CSO data on average hourly earnings indicates that male employees earn more on average than female employees in the food sector. In June 2002 there was a 20% difference between male and female average hourly earnings in the sector; An analysis of employment shows that the food sector remains heavily male dominated; There is a higher incidence and recent growth of part-time employment among females in the sector; There has been strong recent growth in number of females in managerial/administrative positions within the food sector, however, a significant gap remains between sexes in this category; A recent IBEC survey confirms under-representation of females in higher management positions within the food, drink & tobacco sector; Females within the sector have a younger age profile than male employees on average; Average weekly hours worked are lower for females in the sector, mainly reflecting a higher incidence of part-time working; The proportion of lone parent female employees in sector is higher than for male employees, but is comparable to the pattern across the economy as a whole, which may discourage females from seeking promotion; and, Overall, female employees in the food sector appear to have slightly higher levels of educational attainment on average than male employees. December 2002 v

9 Executive Summary Review of the Local Government Sector The principal findings from our analysis of gender pay and employment conditions in local government, and the factors influencing these conditions, are as follows: The Local Government sector differs from other sectors examined, particularly in relation to the definition of pay scales, career progression and allocation to posts; Local Government posts more clearly defined, but promotion rates differ for female and male employees; An analysis of the findings from survey of local government employees indicates the existence of a gender pay gap adversely affecting women employed in local government in Ireland; Our analysis reveals a noticeable variation in male/female pay conditions, with 51.8% of female employees paid 30,000 or below compared with 34.8% of male employees; An analysis of senior management grades in local government indicates that female representation is extremely low in many grades, varying between 0% and 26.7%; In December 1999, only 3% of County/City Managers and only 5.6% of Assistant City/County Managers were women; There is a marked difference in the proportion of males and females eligible for application for administrative and professional & technical positions within the local government service; There are higher numbers of males appointed to administrative and professional & technical positions; However, the success rate of female eligible applicants has been higher in recent years; Among the potential approaches to addressing the gender pay gap, 82.3% of local government employers attached a high level of importance to the promotion of non-traditional subject choices for female school children and college students. Recommendations to Address to Gender Pay Gap This study also sets out our recommendations to address the gender pay gap at sectoral level across the sectors under review. It is important to note that in many cases sectoral issues may require national level responses and our research suggests that while there are some differences within sectors, many of the initiatives required are likely to apply across the economy. Before presenting our recommendations at sectoral level, it is instructive to consider the views of the general public on the priorities attached to various approaches to addressing the gender pay gap at national level. In the table below we present the public s perceptions on the gender pay gap in Ireland and in particular their views on the importance attached to a number of potential approaches to addressing the issue. The data is taken from the /MRBI Public Perceptions Survey on the Gender Pay Gap, of which there were 1,002 responses. December 2002 vi

10 Executive Summary Public Perceptions on the Gender Pay Gap - Views on Importance Attached to Potential Approaches to Addressing the Gender Pay Gap % of Respondents Potential Approaches Important Neither Important nor Unimportant Unimportant Very unimportant Don't know Total Setting of targets for Recruitment and Promotion of Women at Different Levels within Organisations Provision of Improved Childcare Support Availability of more Flexible Working Arrangements, Including Part-Time Employment, Job-Sharing, Tele-working, Flexitime and Working from Home Availability of More Flexible Maternity and Paternity Leave Arrangements Promotion of NonTraditional Subject Choices for Female School Children and College Students Provision of Better Training and Job Search Assistance for Women Reentering the Work Market Government Awareness Campaigns Aimed at Employers and the General Public Greater Educational/Training Support for Women Very important Use of standard/uniform approaches to hiring and promotion issues Source: /MRBI Survey of Public Perceptions on the Gender Pay Gap (Sample response = 1,004 adults aged 15+) December 2002 vii

11 Executive Summary Recommendations to Address the Gender Pay Gap in the Retail Sector Our recommendations to address the gender pay gap are presented on a sectoral basis for the four sectors under review. In the table below we summarise our recommendations to address the gender pay gap in the retail sector. We expand on each recommendation in more detail in Section 8 of the report. Recommendations to Address the Gender Pay Gap in the Retail Sector 1. PROMOTE APPLICATION OF EQUALITY REVIEWS AND GENDER AUDITS WITHIN THE RETAIL SECTOR. 2. INTRODUCE PROGRAMME TO ENCOURAGE GREATER PROPORTION OF WOMEN TO SEEK SENIOR MANAGEMENT POSITIONS IN THE RETAIL SECTOR. 3. FACILITATE PROGRAMMES TO ENHANCE THE PROPORTION OF WOMEN IN THE RETAIL SECTOR SECURING THIRD-LEVEL DEGREES. 4. PROMOTE THE PROVISION BY EMPLOYERS OF IMPROVED ACCESS TO FAMILY FRIENDLY AND FLEXIBLE WORKING ARRANGEMENTS. 5. INTRODUCE PROGRAMMES TO REINTEGRATE WOMEN INTO THE RETAIL SECTOR FOLLOWING PERIODS OF EXTENDED LEAVE OF ABSENCE December 2002 viii

12 Executive Summary Recommendations to Address the Gender Pay Gap in the IT, Electrical & Electronics Sector In the table below we summarise our recommendations designed to address the gender pay gap in the IT, Electrical & Electronics sector. Recommendations to Address the Gender Pay Gap in the IT, Electrical & Electronics Sector 1. PROMOTE THE APPLICATION OF GENDER EQUALITY REVIEWS AND AUDITS. 2. INTRODUCE NEW AND EXTEND EXISTING PROGRAMMES TO ENCOURAGE GREATER NUMBERS OF WOMEN TO JOIN SECTOR. 3. INTRODUCE PROGRAMMES TO ENCOURAGE GREATER PROPORTION OF WOMEN TO SEEK SENIOR MANAGEMENT POSITIONS IN THE SECTOR. 4. ENCOURAGE EMPLOYERS TO INCREASE ACCESSIBILITY TO FLEXIBLE AND FAMILY- FRIENDLY WORKING ARRANGEMENTS. 5. PROMOTE AND FACILITATE INCREASED EDUCATIONAL ATTAINMENT AMONG WOMEN IN THE SECTOR THROUGH PROGRAMMES TO INCREASE PARTICIPATION IN THIRD-LEVEL EDUCATION. 6. INTRODUCE PROGRAMMES TO RE-INTEGRATE WOMEN RETURNING TO EMPLOYMENT FROM MATERNITY LEAVE AND PERIODS OF EXTENDED ABSENCE FROM THE WORKFORCE. December 2002 ix

13 Executive Summary Recommendations to Address the Gender Pay Gap in the Food Sector In the table below we summarise our recommendations to address the gender pay gap in the food sector. Each recommendation is elaborated upon in Section 8 of the report. Recommendations to Address the Gender Pay Gap in the Food Sector 1. INTRODUCE PROGRAMME TO IMPLEMENT GENDER EQUALITY AND AUDIT ACTION PLAN TARGETED AT THE FOOD MANUFACTURING AND PROCESSING SECTOR. 2. IMPLEMENT PROGRAMME TO ENCOURAGE GREATER FEMALE REPRESENTATION IN THE FOOD SECTOR. 3. INTRODUCE PROGRAMMES TO ENCOURAGE GREATER PROPORTION OF WOMEN TO SEEK SENIOR MANAGEMENT POSITIONS WITHIN THE FOOD SECTOR. 4. PROMOTION OF GREATER USE BY EMPLOYERS OF EXTERNAL RECRUITMENT ASSISTANCE RATHER THAN IN-HOUSE PERSONNEL. 5. PROVISION OF ENHANCED TRAINING AND JOB SEARCH ASSISTANCE TO WOMEN RE- ENTERING EMPLOYMENT IN THE SECTOR AFTER PERIODS OF EXTENDED ABSENCE December 2002 x

14 Executive Summary Recommendations to Address the Gender Pay Gap in Local Government In the table below we summarise our recommendations to address the gender pay gap in the local government sector. Each recommendation is discussed in further detail in Section 8 of the main report. Recommendations to Address the Gender Pay Gap in the Local Government Sector 1. IMPLEMENT PROGRAMME TO ACHIEVE GREATER FEMALE REPRESENTATION AT SENIOR LEVEL IN LOCAL GOVERNMENT. 2. INCREASE ACCESS TO EXTERNAL CANDIDATES SEEKING CAREERS IN LOCAL GOVERNMENT. 3. LOCAL GOVERNMENT EMPLOYERS TO ENCOURAGE GREATER PROPORTION OF FEMALE EMPLOYEES TO TAKE UP THIRD-LEVEL EDUCATION AND TRAINING COURSES. 4. PROVIDE IMPROVED TRAINING AND JOB SEARCH ASSISTANCE FOR WOMEN RE- ENTERING LOCAL GOVERNMENT FOLLOWING MATERNITY LEAVE AND PERIODS OF EXTENDED ABSENCE. 5. IMPROVE AVAILABILITY OF STATISTICAL AND MONITORING INFORMATION AND UNDERTAKE MORE REGULAR FORMAL REVIEWS OF GENDER EQUALITY WITHIN LOCAL GOVERNMENT Overall Conclusion This study has described in detail the extent of the gender pay gap and gender segregation in the Retail, IT, Electrical & Electronics, Food and Local Government sectors of the Irish economy. The research has also examined a range of factors likely to impact on gender pay and employment conditions in each sector. The objective of any policy response must be to ensure that gender discriminatory practices are removed so that the full potential of the economy s labour resources is utilized, with resulting benefits for both individuals and for commercial efficiency and development in the sectors concerned. This requires, in particular, a pro-active approach to addressing the gender segregation issues highlighted in this report. However, in advising on recommendations to address the gender pay gap, a balance must also be struck to ensure that competitiveness issues are recognized. But if companies overlook the potential of a very significant part of the labour force, the overall competitiveness of the sectors concerned and the Irish economy as a whole is likely to be damaged. December 2002 xi

15 Section 1 Introduction and Background 1 Introduction and Background 1.1 This report has been completed for the PPF Consultative Group on Male/Female Wage Differentials by International Economic Consultants. The report concerns a study of the gender pay gap at sectoral level in Ireland. Background and Terms of Reference 1.2 The background to the study is that the PPF Consultative Group on Male/Female Wage Differentials was established under the Programme for Prosperity and Fairness with the aim of investigating the actions required to address the gender pay gap in Ireland. This Group is chaired by the Department of Justice, Equality and Law Reform and includes the Department of Enterprise, Trade and Employment and the social partners. 1.3 The Group s overall objectives, set out below, provide the context for the current study. This report addresses the PPF commitment at indent two in so far as it relates to the sectoral analysis. The recommendations in this report are s. It is a matter, in the first instance, for the Consultative Group to consider which, if any, of the recommendations should be implemented. Oversee the finalisation of the ESRI report on male/female wage differentials undertaken following the commitment in Partnership 2000; Consider the recommendations contained in the above report, including the case for a sectoral analysis in both the public and private sectors; Develop proposals for action(s) to address issues identified in the report for consideration by the Government. 1.4 While extensive research on the gender wage gap has been undertaken to-date, this has not focused on the sectoral pattern of wage differentials. The Consultative Group has decided to investigate the gender wage gap within specific sectors of the economy and has specified the following sectors as being relevant to the current study: IT, electrical and electronic; Retail; Food; and Local Government. December

16 Section 1 Introduction and Background 1.5 The study sets out to address the following matters: Compile relevant statistics which help explain the gender pay gap at sectoral level; Map the extent of gender segregation, both horizontal and vertical, in the sector(s); Examine human resources procedures and practices which have either a negative or positive impact on gender equality in the sector(s), including career opportunities within the sectors, recruitment and promotion, and working conditions; Examine work procedures and practices which have either a negative or positive impact on gender equality within the sector(s); Explain factors which influence gender differences within the sector(s); Identify any skills differences between men and women; Examine, where possible, factors determining exits from the sector, and assess any gender dimension to this; Draw conclusions relating to the gender pay gap at sectoral level; Issue national recommendations on tackling the gender pay gap; and, Identify proposals for action for submission to the Consultative Group on Male/Female Wage Differentials. December

17 Section 1 Introduction and Background Methodological Approach to Assignment 1.6 Our approach to this assignment entailed six key phases of research, as follows: (ii) (iii) (iv) (v) (vi) (vii) Review of existing research and collation of statistical data; Review of national trends in gender pay conditions; Quantification of gender pay conditions at sectoral level; Analysis of gender employment conditions at sectoral level; Identification and assessment of factors influencing gender pay and employment conditions at sectoral level; Conclusions and Recommendations to address the gender pay gap at sector level; Existing data sources and new survey approaches 1.7 Our analysis in this study includes an examination of gender pay and employment conditions at sectoral level based in part on a number of existing data sources, which include: CSO data on average industrial earnings and hours worked; IBEC survey on Women in Management in Irish Business (March 2002); Existing findings on gender pay and employment conditions and related issues. December

18 Section 1 Introduction and Background 1.8 While much research has been undertaken in relation to the gender pay gap at national level, little if any data and research exists at sectoral level. To address existing data and research gaps, our approach has entailed an extensive and innovative new research programme, the objective of which has been to assist in fully addressing the terms of reference through the following survey exercises: Survey of Public Perceptions on the Gender Pay Gap. Special analysis of Central Statistics Office (CSO) Quarterly National Household Survey (QNHS) data; Department of Environment and Local Government special data run on employment by grade in local government; Office of the Civil Service and Local Appointments Commissioners data; Survey of Employers in each sector under review; Survey of Recruitment Consultants; Survey of Trades Unions; Survey of Employer and Business Organisations; and, Survey of Employees in each sector under review. Survey of Public Perceptions on the Gender Pay Gap 1.9 As part of this Study, undertook a public perceptions survey, with the assistance of MRBI, of 1,002 adults aged 15 years and over. This survey represents a nationally representative sample of the population. A copy of the survey questionnaire is included in the annex to this report. Special analysis of Central Statistics Office (CSO) Quarterly National Household Survey (QNHS) data 1.10 A special analysis of Central Statistics Office (CSO) Quarterly National Household Survey (QNHS) data was undertaken by. The QNHS covers 39,000 households. December

19 Section 1 Introduction and Background Department of Environment and Local Government special data run on employment by grade in local government 1.11 also undertook a special data run, on employment by grade in local government, from Department of Environment and Local Government databases. Office of the Civil Service and Local Appointments Commissioners data 1.12 Similarly, a special data run was also undertaken on Office of the Civil Service and Local Appointments Commissioners data. Survey of Employers in each sector under review 1.13 Surveys of employers in each of the four sectors under review were undertaken for this Study. A total of 92 employers responded to these surveys, representing a total employment of 23,248 persons. The breakdown of responses to the employer surveys by sector is as follows: - IT, Electrical & Electronics sector: 26 employers employing 1,445; - Food sector: 18 employers employing 4,089; - Retail sector: 31 employers employing 3,155; - Local Government: 17 employers employing 14, The survey questionnaires used for the survey of employers are based on a similar content and format. A copy of the survey questionnaire in respect of the retail sector is included in the annex to this report. Survey of Recruitment Consultants 1.15 A survey of eleven leading recruitment consultants/agencies was undertaken. A copy of the survey questionnaire is included in the annex to this report. Surveys of Trades Unions and of Employer and Business Organisations 1.16 A total of 7 trades unions and 4 employer and business organisations were also surveyed as part of this Study. Copies of the survey questionnaire are included in the annex to this report. December

20 Section 1 Introduction and Background Survey of Employees in each sector under review 1.17 In addition to the main research work, it was decided to undertake some limited surveys of employees, in each of the four sectors under review for this Study, in order to explore indicative views on certain issues. Independent CSO data on gender pay was obtained as part of this study for two sectors, namely the IT and food sectors, however similar sectoral data was not available for the retail and local government sectors. We therefore decided to place more significant resources than originally envisaged on the employee surveys in these latter two surveys in order to obtain quantified data on pay differences as well as indicative views on certain issues A total of 725 employees responded to these surveys. The breakdown of responses to the employee surveys by sector is as follows: IT, Electrical & Electronics sector: 49 employees; Food sector: 31 employees; Retail sector: 361 employees; and Local Government: 284 employees The survey questionnaires used for the survey of employees are based on a similar content and format. A copy of the survey questionnaire in respect of employees in the retail sector is included in the annex to this report. Structure of Report 1.20 This report is structured as follows: in Section 2 we review the existing research undertaken in relation to gender pay and employment issues at national and international level. In Section 3 we review the recent trends in the gender pay gap at national level. Section 4 commences our sectoral analysis, focusing on the Retail sector. In Section 5 we present our assessment of the IT, Electrical and Electronics sector. Section 6 examines the gender pay and employment conditions in the Food sector, while in Section 7 we review the position in relation to the Local Government area. Finally, in Section 8 we bring together our analysis completed in the preceding sections, draw our overall conclusions as well as present our recommendations. December

21 Section 1 Introduction and Background Acknowledgements and Disclaimer 1.21 A number of organisations/bodies have assisted the consultancy team during the course of this study and we would like to acknowledge their contribution. Firstly, we would particularly like to thank the Members of the Consultative Group on Male-Female Wage Differentials and the officials within the Department of Justice, Equality and Law Reform. We would also like to thank ICTU for their assistance in relation to our survey programme of employees and trades unions. We also acknowledge the inputs of IBEC and other organisations. In addition, we would like to acknowledge the assistance of Olive Sweetman and Donal O Neill of the Department of Economics, NUI Maynooth, for their valuable research inputs. We would like to thank the Department of Environment and Local Government, the Civil Service and Local Appointments Commission, the local authorities, the Department of Finance and the Central Statistics Office for their extensive assistance in relation to data and other research inputs. And last but not least, we would like to acknowledge the invaluable contribution to the study provided by the large number of employers, employees, and members of the public who participated in our surveys. The usual disclaimer applies, and the analysis and views in this report are the sole responsibility of. December

22 Section 2 Review of Previous Research on Gender Pay Issues 2 Review of Previous Research on Gender Pay Issues 2.1 In this Section we present an overview of previous research undertaken in relation to the gender pay gap and gender employment issues, both in Ireland and overseas. The purpose of our review is to set a context for our subsequent analysis of recent trends in the gender pay gap at national and sectoral level and to assist in identifying the factors that typically influence gender pay conditions. Overview of Existing Research 2.2 The current sectoral assignment follows on from the research completed in This research focused on quantifying the gender pay gap at national level in Ireland, identified how the pay gap relates to patterns of labour market participation and proposed a range of policy responses to address the gender pay gap. 2.3 In setting a context for the current sectoral study, it is instructive to restate the main findings from the ESRI s research, which can be broken down under the following headings: - Measuring the wage gap; - Structure of the wage gap; - Potential causes of the gap; - Earnings and labour market participation; - Policy conclusions. 1 Economic and Social Research Institute, How Unequal? Men and Women in the Irish Labour Market, December

23 Section 2 Review of Previous Research on Gender Pay Issues 2.4 In relation to measuring the wage gap, the research noted that regular statistics on a full-economy-wide basis identifying male and female earnings are not available. This has often resulted in a over-reliance on the CSO s regularly published series for hourly earnings in manufacturing, which have the weakness that women are underrepresented in the manufacturing sector. This has pointed to the requirement to rely on survey exercises that provide a fuller picture of gender patterns at national level. The research therefore draws extensively from a panel dataset, the Living in Ireland Survey, in particular the 1994 and 1997 waves of the survey. 2.5 The Living in Ireland Survey research at national level has shown that average hourly earnings of women in 1987 were about 80 per cent of those of the average male. By 1994, this ratio had risen to just over 80%, while by 1997 the differential closed further to reach 84.5 per cent. It was noted that the above ratios are about 13 percentage points higher than the corresponding pay ratios within the manufacturing sector. 2.6 It was also noted that men were more likely to be able to avail of a range of non-wage/salary benefits, including pension benefits. When such benefits are taken into account, it was found that the pay gap between male and female overall earnings was 1-2 percentage points higher than in the case of wage/salary-only earnings. 2.7 Regarding the structure of the wage gap, the previous research notes that part of this gap can be explained by reference to differences in labour-market-relevant characteristics of men and women in paid employment. Through decomposing the wage gap into a part explained by labour market characteristics and a remaining unexplained part, the research found that about half of the total wage gap in 1987 was explained mainly by differences in labour market experience. However, by 1997 close to three-quarters of the wage gap was explained by labour market factors. 2.8 It was also found that when an index of discrimination was constructed - which attempted to provide an estimate of the extent of discrimination on the basis of the unexplained element of the wage gap the index stood at about 15 per cent in 1987, i.e. the average woman would have earned about 15 per cent more than her male counterpart if her characteristics were rewarded in the same way as men s. By the 1990s, the index of discrimination had fallen to about 5 per cent. The research notes, however, that this shift has coincided with a substantial increase in overall wage inequality, whereby the wage structure generally across the economy has seen a greater move towards vertical inequality. December

24 Section 2 Review of Previous Research on Gender Pay Issues 2.9 In identifying potential causes for the gender wage gap that cannot be explained by reference to observable labour market characteristics of men and women, the previous research noted that the most plausible economic theories of discrimination focus on what is termed statistical discrimination. This occurs where employers face greater incentives to hire or promote males instead of equally qualified females if the latter are more likely to have a shorter job tenure and if there are additional costs associated with employment of women (e.g. maternity leave) In relation to earnings and labour market participation, the research notes that following analysis of the factors influencing participation the research shows that it is the arrival of children that leads to the crucial differences in participation. It was found that women possessing identical qualifications and experience would typically end up with nine years less labour market experience by the time they reach the age of 47. The research concludes that the wage paths for men and women cannot be brought closely into line in the absence of a further increase in the labour market attachment of women during childbearing and childrearing years. One approach to achieving this, according to the research, would be through family-friendly working arrangements such as part-time working In developing policy conclusions, the ESRI research notes the central importance of provision of flexible childcare assistance that facilitates individual choices either to remain in the paid labour market or to take time out to care for children or indeed for other family members In terms of other policy responses, the research highlights the importance of the recent legislation on equality, the internal structure of trades unions and the nature of bargaining with employers in assisting to address gender employment and pay issues. In addition, the National Minimum Wage is also seen to have assisted in closing the pay gap, though attention must be given to how the minimum wage is uprated in the future. Family friendly working arrangements are also highlighted, including parental and maternity leave and assistance for women re-entering the labour market after a period of full-time work in the home. The need for measures aimed at reducing vertical segregation within the workforce is also emphasised. Finally the report suggests a need for regular monitoring at national, sectoral and firm level, in addition to the monitoring of cases investigated by the Office of the Director of Equality Investigations. December

25 Section 2 Review of Previous Research on Gender Pay Issues Getting out of the House Women Returning to Employment, Education, and Training 2.13 This study was undertaken by Helen Russell, Emer Smyth, Maureen Lyons, and Philip J. O Connell, and published by the ESRI in Among the findings of the research was that lack of childcare provision is one of the most significant barriers to women returning to education, training and the labour market. Survey evidence undertaken for the report showed that, among women in home duties, those with children under five years of age were significantly less likely to be seeking employment than other groups. Furthermore, analysis of women s labour market experiences over time showed that (controlling for job search and other factors) women with children in this age group were much less likely to make the transition from working full-time in the home into paid employment However it was found also that childcare concerns were not confined to those with pre-school children. The absence of after-school care was a problem for women with school going children and meant that many were confined to part-time jobs, with consequent implications for the quality of their employment. Older women s opportunities to engage in education, training or employment were also constrained because, as grandparents, they were often required to fill gaps in affordable childcare provisions The study also revealed that access to information is a critical issue in facilitating the successful return to education, training and employment for women. It was found that women outside the labour market lacked information on the type of courses and schemes available, the eligibility requirements for these courses, the nature of application procedures and course content. Similarly, they tended to lack knowledge about the kind of job opportunities available in the current labour market. December

26 Section 2 Review of Previous Research on Gender Pay Issues Identifying Members Childcare Needs - Irish Congress of Trades unions 2.16 This study notes that employees are increasingly seeking a more balanced approach to reconciling their work and family lives and that consequently they are identifying the need for policy improvements to help them reconcile employment and caring for their children that ensures quality of life for children, parents and families This survey commissioned by ICTU found that access to childcare is far from satisfactory in Ireland, and also highlights the problems that working parents experience across a wide range of areas including having to leave the workforce, not applying for promotional opportunities, and putting careers on hold. Meeting the cost of childcare was generally seen as the biggest problem facing working parents. The scale of the difficulty faced by workers in meeting their childcare costs is large and felt most by those families where both parents work The study states that while childcare is not a woman s issue the research shows that in Ireland today, mothers continue to be expected to be available for unpaid caring work. Therefore it was suggested that childcare must be seen as vital to ensuring women s participation in the labour force and is critical in respect of eliminating the gender pay gap. This survey demonstrates both the impact that the lack of childcare has on workers and their families, and the need for a multifaceted and interconnected response at workplace level In the report, ICTU calls for the development of a long-term strategy at national level aimed at meeting the needs of working parents. This strategy should reassess current taxation policies to assist working parent s meet their childcare costs and should review the overall mix of the childcare supply support to be provided. December

27 Section 2 Review of Previous Research on Gender Pay Issues Creating Opportunities, Making Choices: Women and Work National Women s Council of Ireland 2.20 This study was undertaken by the National Women s Council of Ireland to obtain views in relation to women and work in Ireland. The key findings from the study include, inter alia, the following: A dominant theme that emerged was the importance of the development and implementation of policies by the State and employers to enable women to reconcile caring responsibilities with paid employment. The issue of childcare was seen as a fundamental factor in determining the extent of women s access to the labour market. It was felt that government should play a key role, along with the social partners, to provide a comprehensive and regulated childcare service. An issue that was raised repeatedly within research groups was the need for the more general application of flexibility in working conditions and the introduction of a more comprehensive system of family friendly policies. There was a general support for the introduction of paid parental leave as a right to enable women and men to make freer choices about their careers and home lives. Participants repeatedly expressed their desire for greater equality in the workplace - this would encompass recognition of women s caring responsibilities, career promotions, recognition of the value of woman s work, protection against sexual harassment and greater access to educational and vocational training. The women in this project concluded that a change in awareness was necessary with regards to societal perceptions of women s roles. Women identified the co-operation of the three principal actors the Government, employers and employees as critical to the development of a `women-friendly working environment by December

28 Section 2 Review of Previous Research on Gender Pay Issues The Gender Pay Gap: A Research Review Equal Opportunities Commission UK 2.21 This study undertaken by the Equal Opportunities Commission in the UK found that efforts to close the gender pay gap must operate alongside current trends and developments since these can have divergent effects on the pay of different groups of men and women in different labour force segments Changes in organisational structure, changes in collective bargaining coverage and wage setting policy, restructuring of internal pay systems and changes to welfare benefits and system of family organisation reflect significant processes of transformation at different levels of the economy. However, the net effect of these changes on the male and female wage structure is not pre-determined; there is considerable scope for political choice. Changing the gender pay ratio thus requires action on a wide set of policy agendas, involving the mainstreaming of gender pay equality across different levels of policymaking In terms of policy, the report indicates that the mainstreaming of gender pay issues into the whole framework of policy-making is essential if the gender pay gap is to be closed. The policies that should be adopted as part of this process need to: Bring into the balance the value attached to men and women s work; Enable women to participate in employment on a more equal and more continuous basis; Promote women s rights and women s participation as citizens. December

29 Section 2 Review of Previous Research on Gender Pay Issues Gender Equality in the Civil Service Institute of Public Administration 2.24 This research study was undertaken for the Equality Committee of the Human Resources Management Implementation Group, as part of the Strategic Management Initiative (SMI). Its brief was to identify the reasons for the considerable under-representation of women in the civil service at the general service grades of Higher Executive Officer (HEO) level and above The study concluded that despite the existence of an Equal Opportunities Policy and Guidelines for over 12 years, women and men are still likely to have very different experiences and outcomes while serving in the civil service. During their period of service, women, compared to men, can expect to enter at a lower level and progress more slowly through the grading structure. As a result, they can often expect to be paid less. They are far more likely to have to balance caring responsibilities outside work with a long-hour culture within the service itself, often choosing job-sharing or ruling out promotion as a result. They are less likely than men to be placed in high profile, core activities within the service. Rather, women are often concentrated in operational areas of work which are less visible to senior managers and ministers alike. As a result, women are less likely to benefit from such opportunities for accelerated career progression The study suggests that although equality of opportunity exists de jure within the civil service, considerable further progress will need to be made to ensure that women and men experience equality as a de facto and routine parts of their working lives. The report suggests that given the slow rate of progress to-date, unless new and affirmed action is taken across a wide front, a balanced representation of women and men in the higher grades of the civil service is unlikely to be achieved within the working lives of most of those currently serving. Conclusion 2.27 Overall the review of existing research has included an examination of previous national and international research on gender segregation and pay issues. While research on the national pay gap has been widespread, very little research has been undertaken on sectoral gender issues. December

30 Section 3 Recent Trends in the Gender Pay Gap at National Level 3 Recent Trends in the Gender Pay Gap at National Level 3.1 Before examining the extent of and factors influencing the gender pay gap at sectoral level, it is useful to provide a national context for the sectoral analyses. In this Section we present a review of the recent trends in the gender pay gap at national level, in addition to looking at some of the key features of the gender structure of employment and the labour market. We also consider the perceptions of the general public in relation to the factors influencing gender pay inequality. National Gender Pay Trends 3.2 As pointed out in the previous national-level research, there is a lack of suitable statistical data sources that provide a reliable picture of the gender pay gap in Ireland. The principle existing national indicator of pay conditions is the CSO s regularly released series, Industrial Earnings and Hours Worked. 3.3 In Table 3.1 we indicate the recent trends in average hourly earnings of male and female industrial workers over the period , based on data released by the CSO in September Table 3.1: Recent Trends in Average Hourly Earnings of Industrial Workers by Gender per hour - All Industries Year Male Industrial Workers (A) Female Industrial Workers (B) (B)/(A) - % * Adult rates only; Annual averages Source: CSO, Industrial Earnings and Hours Worked, Preliminary figures for June 2002, released September 2002 December

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