Pay gap suggests sexism still rife in the City

The gender pay gap in the City women is twice the national average. Should we be outraged?

Last Updated: 31 Aug 2010

Women in the City still earn up to 60% less than their male counterparts, according to a report from the Equality and Human Rights Commission. Although there are now as many women as men working in the financial services sector, they still seem to be getting a worse deal on salary, the stats suggest – the industry’s pay gap is twice that for the UK as a whole. Just to give the general populace even more reason to dislike bankers…

In news that will make Harriet Harman apoplectic, the Commission reports that across the sector, women’s annual gross pay is on average 55% less than men’s (female fund managers and stockbrokers are apparently the worst off, earning 60% less). Throw in bonuses and incentives too, and this stretches to 79%. Chairman Trevor Phillips described the figures as ‘shocking’; the industry, he said, was ‘losing or not taking advantage of talented women from a crucial industry – something we can ill afford in these troubled times’.

One important point to note is that although City women may be present in greater numbers these days, it’s mostly at the lower levels of the industry. 70% earned less than £29,500 in 2007/8, whereas 70% of men in the sector earned more than that. And just 11% of senior bankers are women (which some think is how we got into this mess – check out the debate here in our piece ‘Let Women Tame the Macho Excess’, if you’re feeling brave).

Detractors will undoubtedly see this as another stick with which to beat the banks, but it may not be quite that simple. As Angela Knight, the head of the British Bankers Association, points out in today’s FT, many women choose not to put in the hours that senior banking roles require, which is why they fall behind their male counterparts (though perhaps if bankers could start working smarter, rather than harder, this would be less of an issue). ‘Statistics don’t tell the whole story,’ she insists, suggesting that the City is not as macho as it’s often portrayed.

However, giving the City a sympathetic hearing isn’t exactly high on many people’s agendas these days. And the Commission’s figures do also seem to suggest that those women who do break the much-vaunted glass ceiling and climb to the higher echelons still get paid less than men, and take home smaller bonuses. So the financial services industry clearly still has a lot of work to do to get its house in order. Another problem to add to a very long list...

In today's bulletin:
No surprises as Bank holds rates at 0.5%
Pay gap suggests sexism still rife in the City
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Chancellor for the Day: Lord Digby Jones
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