The real reason women are paid less than men

Recent figures showed that the pay gap now stands at 17.2%, and a shocking 27% at senior management level. So why do women put up with this? asks Merryn Somerset Webb.

More figures out last week showed that women still aren't getting paid as much as men. Across the board the pay gap is still a much too high 17.2%.

The reasons for this have been much discussed and generally put down to motherhood the fact that we take career breaks and so advance more slowly - and that we take more low paid part-time jobs than men.

But if this is the case it should also be the case that at the top of the tree in full time professional jobs the gap should be much smaller. Not so. In fact, ONS numbers show that for senior mangement the pay gap is around 27%, while IOD numbers show it at 22% in the boardroom.

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So what's going on? I don't much like the answer to this but here is what I think it is. Women are worth less to employers (male or female) than men are because they can't be counted on to stay in their job for as long. I'm not saying that men don't job hop all the time but in general an employer knows that if he gets paid well and treated nicely a man is likely to stay.

This doesn't work with a professional woman. Doesn't matter how well you treat her, she's probably going leave anyway. She's going to have a baby so she'll be gone for at least six months, maybe a year. Then she might come back. But then after another year she'll have another baby, after which the odds of her coming back fall very sharply. So why work so hard to keep her? The rational course (if not the legal one) is to pay any extra cash to the men on the team.

You might wonder why professional women, who must surely be confident enough to demand equal pay, let their employers get away with this. The answer to this is simple too. We're trading pay for stability and, we hope, understanding. Someone with children who isn't entirely sure she can keep coping with full time work; who knows for sure she can't cope with the upheaval of changing jobs (something you often come to after laying down pay ultimatums); who would quite like to have another baby; and who feels a bit guilty about wondering how her toddler is doing at play group during boring meetings both wants and needs to keep her employer sweet.

Ask for more money? No way. Move jobs to bump up her salary and give up years of accumulated maternity benefits (stay at a good company for five years plus and you can get 6 months of full pay)? No way. I think a lot of women also rather hope that taking a little less out of the pot protects them: that being cheap means they'll be last out of the door when tough times come surely, we think to ourselves, they'll fire all those expensive men first. Women working in the City may be about to find out if that was a good bet or not.

First published in The Evening Standard

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.