Gender pay gap for millennials in their 20s falls to 5%

The Resolution Foundation has produced analysis which shows the gender pay gap for millennials (ie those reaching young adulthood around the year 2000) has halved in a generation to 5%.

However, early signs show that the pay gap continues to escalate as women enter their 30s and 40s, suggesting millennial women will still earn significantly less than their male counterparts over the course of their careers.The analysis was published as part of the Resolution Foundation’s Intergenerational Commission. It tracks the typical hourly pay of different generations of women (from as far back as the generation born between 1911 and 1925) over the course of their careers, compared to that of their male counterparts.

The analysis highlights that baby boomers (those born between 1946 and 1965) experienced a pay gap of 16% during their 20s, with the gap falling to 9% for women in generation X (born between 1966 and 1980) and then to 5% for millennials (born between 1981 and 2000).

It goes onto explain that the gender pay gap continues to rise rapidly for women in their 30s and 40s and that among baby boomers the gender pay gap rose from 21% at the age of 30 to 34% by the age of 40, after which it started to fall. Again, for generation X the pay gap increased from 10% at age 30 to 25% by the age of 40.

On a positive note, the gender pay gap has closed for every subsequent generation of women which is likely to be as a result of rising higher educational participation which women in particular have benefited from, and more women breaking into high-paying industries and occupations.

Despite this, challenges remain, with the most notable being the enduring pay penalty associated with having children. If this is not addressed, current and future generations of working women will continue to face a significant life earnings penalty. As the gender pay gap is now firmly on the agenda, it will be interesting to see what happens to millennial women (who have not yet experienced much of a pay gap) in terms of what happens when they reach their 30s and start to have children.

More gender pay gap information will be available from April 2018 when large employers (with more than 250 employees) will be required to publish differences in pay between the genders in their organisations.

If you require assistance in your own organisation’s gender pay gap reporting obligations or if you require further information on this topic, please contact Claire Sleep at Ashtons Legal (claire.sleep@ashtonslegal.co.uk or 01223 431094).