Friday, 17 September 2010

Pay And The Genders

‘The differential between the sexes on pay has increased to 22%’ A Radio 4 article on equal pay between the sexes prompted me to look at this topic again in these columns.
The emotive flavour of that comment hides a lack of substance and it was not explained in the item on the radio. If you take the average earnings of all working males and measure that against the average earnings of all female workers you get a figure for a comparison (presumably the 22%) but it is inadequate.
If you take all train drivers and compare them to all bus drivers you might have a comparison that makes sense, but even then only with qualification. For example the average wage in Cornwall is about half what it is in central London for the same occupation. With buses essentially more locally based in the main, you need to qualify the information. If you can agree a common basis under that observation you can start to compare whether the constant decisions and operation of a bus fairly compare with the longer lasting more intent concentration of a train driver who has possibly 10 times the number of passengers but has other people looking out for his route and what might be in the way, but all the stops signals and latest restrictions to attend to on his journey. Is it the same? The pay rates certainly are not, and partly from historical precedent.
Sticking with transport the BA cabin crews’ dispute brought out some interesting quirks. I understand the cabin crews are paid at different rates if they are working from Heathrow, say to those rates applying to Gatwick.  It seems they were agreed at different times under different trading conditions.  Widening the thinking, presumably the Unions are aware of what the various airlines pay. Does an airline crew from a non European country have similar rates to BA? I don’t suppose they do. Imagine if BA crews had wages pegged to the country they were in for that flight, Sri Lanka perhaps, or Thailand perhaps. You would never get anyone to fly to the poorly paid countries.
On a domestic scale the same considerations actually apply. Geography creates havoc however you look at the problem. At present there are some disturbing realities. Fire fighters I understand come from many miles away for some stations because they cannot afford to live in the locations where they are based. Perhaps they need subsidised accommodation as part of the package because the ideal worker needs to be based locally. But set a wage too high and workers would come from less favoured areas anyway simply to get the extra pay.
The cost of living in any one area is different and the reward for skills cannot be satisfactorily measured across the board. Part time work is sometimes more suited for some occupations and long hours is demanded for others. Some work is clean and some dirty. Some is dangerous and some not. All this is why we have seen Polish and Romanian folk, for example, coming to the UK for what seems like well paid work. The hotel and catering industries depend on foreign workers .
 A Tower Crane operator has a hugely responsible job, requiring special skills as well as a head for heights. Yet we pay entertainers and sports folk far more than would appear to be reasonable on any comparison. Maybe it should all come down to market forces and we should stop trying to compare and set benchmarks.
If every job was paid subject to the number of applicants in some way, ie subject to the Demand for the job vs. the Demand for the service, then the unpleasant jobs would carry a premium. The jobs that suffer a low benchmark figure now would be better paid in an expensive area. In an area that is less favoured the jobs would carry a premium just to keep or get people there. That already happens to some degree but not with any consistency.
The problem with that is already seen. Domiciliary Care workers for example have a responsible and trying job to do. They are not well paid for the most part. Usually they don’t get travel time I believe, so a Dom Care company is likely to have difficulty with a wide spread rural area. They will not be able to source staff to service a wide spread area at the same rates as they can in a town.  Since the Local Authorities go very largely on cost, the problem is passed on because the companies will not be bidding for less favoured areas without an overriding reason.
Small company SMEs are all subject to market forces. If it is not the big boys setting the rates, by comparison or by attitude (if you won’t supply us at that rate there are plenty more that will...) then it is the market forces that dictate the success of the business pricing policy. In there is the cost of wages in some form as well as all the other demand forces. 
The whole thing is riddled with unfairness and difficulties of comparison. I wish the news media would stop jumping on the wagon with headlines about gender comparisons when the problem is infinitely more subtle than that.
Bob Shepherd Associates tries to take in all the market considerations when considering the promotion and the presentation of a business to the outside world.  
For another article exploring this subject see 'Apples and Pears' - 

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