The UK\u2019s gender pay gap has been underestimated for more than 20 years, according to new research, sparking concerns about the reliability of official figures that underpin major policy decisions, including those on minimum wage.<\/p>\n
New findings published in the\u00a0British Journal of Industrial Relations<\/a> suggest that since 2004 the Office for National Statistics (ONS) has failed to properly represent smaller organisations in its annual survey of hours and earnings (Ashe).\u00a0<\/p>\n The report found the gender pay gap had been consistently underestimated by a \u201csmall but noteworthy\u201d margin of around one percentage point. This is because the ONS had given undue weighting to larger businesses, where pay tends to be higher and the gap between men and women\u2019s earnings is usually smaller.<\/p>\n Quarter of organisations have made no progress in closing gender pay gap since 2017, analysis reveals<\/a><\/p>\n Women 1.5 times more likely than men to earn low wages, report finds<\/a><\/p>\n Gender pay gap will \u2018take 45 years to close\u2019 in the UK, research finds<\/a><\/p>\n The flawed data could have widespread consequences, as ONS statistics are used to inform doctors\u2019 and nurses\u2019 pay recommendations and help set the national minimum wage, the study\u2019s lead author, John Forth, professor in human resource management at Bayes Business School at City St George\u2019s, University of London, said.<\/p>\n The UK\u2019s gender pay gap<\/a> was 7 per cent in 2024 for full-time employees, according to official figures. The report, however, indicates the true figure should be closer to 8 per cent.\u00a0<\/p>\n These findings contribute to broader concerns about the quality of ONS statistics. The organisation has faced a series of data setbacks, including postponing July\u2019s retail sales release over quality issues and halting publication of trade data earlier this year after discovering errors dating back to 2023, according to a Financial Times<\/a> report.<\/p>\n The impact of inaccurate figures<\/p>\n Despite ongoing quality concerns, ONS data continues to shape key policymaking, making it crucial for Ashe data to accurately reflect wages and earnings, Forth said.\u00a0<\/p>\n Many employers also benchmark their own gender pay gap figures against the national stats, according to Tom Heys, pay reporting lead at law firm Lewis Silkin. It\u2019s mandatory for all employers with 250 or more employees to publish their gender pay gap data.\u00a0<\/p>\n Additionally, the inaccurate figures have potentially slowed down progress on closing the gender pay divide. \u201cIf policy makers had known the gender pay gap was wider than the ONS was estimating, it\u2019s possible that it may have pursued more stringent policies to close it \u2013 or introduced new initiatives more quickly,\u201d Forth added.\u00a0<\/p>\n An ONS spokesperson said the Bayes Business School research raises \u201cinteresting questions\u201d about the best way to weight survey data. \u201cHowever it\u2019s worth noting that, even if new methods were used, the overall impact on the gender pay gap would be small,\u201d they said.\u00a0<\/p>\n The ONS said it has introduced a number of improvements to Ashe, and further work is under way to review its sampling methods.\u00a0<\/p>\n Forth welcomed the review and urged the ONS to ensure its methodology better reflects the diversity of jobs and organisations across the UK so underlying issues can be properly addressed.\u00a0<\/p>\n Flawed figures shouldn\u2019t cloud fundamental issues<\/p>\n Despite attempts to close the gender pay gap, disparities between men\u2019s and women\u2019s pay persist, with women earning \u00a3631 less than men every month on average, according to the Fawcett Society<\/a>.<\/p>\n Black, minority ethnic, and disabled women face even greater pay disparities \u2013 women of Bangladeshi (28.4 per cent), Pakistani (25.9 per cent) and Mixed White and Black Caribbean (25 per cent) backgrounds experience higher pay gaps.\u00a0<\/p>\n<\/p>\n The pay gap has decreased from 27.5 per cent in 1997 to 13.1 per cent in 2024 for all employees, according to the now disputed Ashe figures<\/a>.\u00a0<\/p>\n For part-time employees, the gender pay gap has dropped from 0.6 per cent in 1997 to -3 in 2024. A negative number shows women earn more than men on average. This is due to the higher percentage of women working in part-time roles and the lower hourly median pay for these positions.\u00a0<\/p>\n While the issue of flawed figures is significant, it shouldn\u2019t cloud the ongoing issue of pay inequality, Heys said. \u201cIf the headline gap is slightly larger than previously thought, it doesn\u2019t change the fundamental issues that the government and employers still need to tackle.\u201d\u00a0<\/p>\n The issue needs attention to \u201csharpen the political focus and strengthen the case for broader measures to address the complex drivers of pay gaps\u201d, he added.\u00a0<\/p>\n