Gender pay gap endures for millennials

4 Jan 17

Young ‘millennial’ women are likely to earn significantly less than their male counterparts over the course of their careers, although the gender pay gap has narrowed, the Resolution Foundation has found.

In an analysis published today, the think-tank revealed that the gender pay gap for millennials ) those in their 20s – has halved in a generation to just 5%. However, this gap widens again when women enter their 30s and 40s.

Overall, the think-tank highlighted the “enduring pay penalty” associated with having children. Unless this is tackled, current and future generations of working women will continue to face a significant life earnings penalty, it stated.  

The study analysed the typical hourly pay of different generations of women from 1911 to the present day. It showed that since the beginning of the study, through the ‘greatest generation’, ‘baby boomers’ and ‘generation X’ to ‘millennials’, the pay gap has narrowed to 5% in the early phase of a woman’s career.   

This reflects positive trends such as rising higher educational participation among women, the think-tank stated, and the fact that more women have broken into higher paying industries and occupations.

However, as women approach the age of 30 they experience a very similar pay gap (9%) to the previous generation. This indicates that the “old challenges” associated with having children endure for young women today, the think-tank said.

The study also highlighted the role that longer working lives are having in contributing to the lifetime pay gap.

It stated: “Tackling the gender pay gap at all stages of women’s careers will hold the key to reducing the lifetime earnings penalty.”

Laura Gardiner, senior policy analyst at the Resolution Foundation, said that successive generations of women have benefited from slow but steady progress in closing the gender pay gap.

“But while many millennial women haven’t experienced much of a pay gap yet, most probably will once they reach their 30s, when they start having children. What’s more this pay penalty is big and long-lasting, and remains for younger generations despite the progress in early careers.”

Gardiner added: “As people continue to live and work longer, it’s important that businesses, policy makers and civic society continue to focus on closing the gender pay gap at all ages, and for every generation.”  

Small hourly pay gaps grow quickly into large lifetime pay penalties that can leave women “hundreds of thousands of pounds worse off over the course of their careers,” she noted.

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