Sex and the salary: Why are women still being short-changed?

Hamish McRae charts a workplace revolution in the UK, while Holly Williams talks to four females succeeding in a man's world

"Why," asked Professor Higgins in My Fair Lady, "can't a woman be more like a man?" If women were more like men they might earn as much and get as many top jobs. (They might also start more wars and commit more crimes – but that is another story for another day.)

That a gender gap still exists in the workplace is not in dispute. February will see Lord Mervyn Davies report to the Government on how to boost the number of women in the boardroom, both identifying the obstacles to women becoming well-paid directors of listed company boards – in 2009, a pitiful 12.2 per cent of FTSE 100 directors were of the fairer sex – as well as offering suggestions about what action the Government and business should take to improve the situation.

Women get paid less than men for all sorts of reasons, but even after you have eliminated everything that might affect pay – from hours worked to years of training – there is still an unexplained element. More of that in a moment, for it is a huge and complicated story. But there is something even bigger happening, something that has never happened before in the history of our species. Economics is driving equality. As a result, though women still lag behind both in pay and job status, the gap has been narrowing steadily in most of the developed world for half a century.

This is driven by changes in the structure of our economies. Quite simply, there is a growing demand for the skills that women tend to have and a decline in the demand for the skills that men tend to have. Put crudely, a manufacturing economy needs men whereas a service economy needs women. So as the balance of activity shifts towards services – and that shift is happening in every developed economy, not just Britain – women will find it easier to get jobs while men will find it tougher.

You can see this happening in Britain. Go back to the beginning of the 1970s and more than 90 per cent of men of working age were in some kind of civilian work, but less than 60 per cent of women were working. Now only 76 per cent of men are in work, while 66 per cent of women are. It is also true that men tend to be in full-time employment whereas women often work part-time, a difference partly of choice, partly of opportunity, partly of family structure and so on. There are not yet as many women in the workforce as men: there are 15.6 million men and 13.5 million women. But like all developed countries, we are gradually moving towards parity. In another 10 years' time, it is quite probable that a majority of our workforce will be women.

If women's skills are in more demand, why is their pay still lower than men and why are there not more women in top jobs?

There are two completely different sorts of top job: jobs where performance is everything and that performance can be accurately measured; and there are jobs which are managerial, where the job is, so to speak, getting a team of people to do a task.

In performance jobs, the differences are really fascinating. We can see that there are some occupations where women compete absolutely level with men: the most obvious is publishing, and of course at the peak is JK Rowling. But there are not very many professions to compare in this respect. In films, women on the whole earn less than men: Tom Hanks earns more than Cameron Diaz, Daniel Radcliffe earns more than Emma Watson, who with Diaz was one of only two women in the top 20 Hollywood earners in 2009.

In most sports the gap is huge, astoundingly so in football and golf, with tennis really the only sport where women are in anything like the same league as men, though they still rank below them. Singers and songwriters? Women do very well but in general men still earn more. Indeed, on a quick tally, I have only been able to come up with one branch of showbiz where women earn a lot more than men and that is modelling. Draw what conclusions you will.

In more mundane performance jobs, much the same pattern applies. Women lawyers tend to earn less than their male counterparts and not just because they tend to specialise in areas such as family law, rather than takeovers and mergers. The only area in financial services where women compete pretty equally with men is fund management.

What about managerial jobs? Of course they're about performance too, but the point here is that it is hard to identify who is really doing exceptionally and who is just lucky. It is not just in banking where people get bonuses that seem to outsiders hard to justify. So rewarding management performance is a very uncertain area, where pay goes to the politically astute as much as to the hard worker. But in management the great divide is between the public and private sectors.

In the public sector in the UK, there is now something pretty close to a level playing field. Pay scales are gender-neutral, of course, and anecdotally at least it seems that promotion is more or less gender-neutral, too. More or less? Well, factually there are and have been a number of women at the top of the civil service and several in senior ambassadorial posts. But the head of both the home and foreign services is a man, the head of the Bank of England is a man, the head of the BBC is a man – there is perhaps something here that does not simply reflect the male-dominated intake into these bureaucracies 30 years ago. I'll come back to that in a moment.

In the private sector, a huge amount depends on the line of business. As a general rule, the closer a business is to the final consumer the more likely it is that women will rise to the top. Retailing? Pretty much level – look at the way Belinda Earl is reviving Jaeger and Aquascutum. Fashion? Well not as level as you might think, for though we can all name women designers, most of the big fashion houses are controlled by men. Oil? Well, no (unless maybe I have missed it) – I cannot think of a women in a senior executive position in a major oil company. Motor industry? Ditto. Resources? Actually, there is an interesting exception in that Cynthia Carroll is head of Anglo-American, the huge mining group, and she did       previously work for the oil company Amoco, now part of BP. But it is unusual.

Now it may simply be that women are more sensible than men, that they take a more balanced view of their lives and reckon that they are going to contribute more to the world by not engaging in the corporate game. But looking at the contrast between the private sector and the public sector, not just in the UK but elsewhere in Europe and in the US, I find myself wondering whether there is some aspect of corporate life than discourages the half of the workforce that happens to be female.

As you might imagine there is a mound of data about this. Among the studies I have been leafing through is a nice one about male competitiveness. Boys and girls were asked to run against the clock. Then the boys were asked to run against other boys and the girls against other girls. Then finally the boys ran against the girls. When the boys ran against each other they ran faster than they did when running against the clock; but when the girls did that, they ran at the same speed. And when the boys ran against the girls? You guessed it: they ran fastest of all.

There have been several studies of the earnings of business-school graduates and a similar phenomenon occurs. Men who have just got an MBA earn more than women with an identical qualification. Why? Well it seems that men ask for more, whereas women tend to accept the salary first offered.

But the thing I find most interesting of all is not what happens in the job market, but what happens when people employ themselves – what happens to entrepreneurs. That seems to be a quality that is evenly distributed between the genders. Many women found successful businesses here and elsewhere in the world. But the greatest commercial success stories – the Dells, the Googles, the Facebooks – have all been started by men. Could it be that there is a certain obsessive, competitive quality in some men which explains that success? The greatest self-made fortunes in the global league of billionaires have all been made by men.

That will not change fast... and points to a further issue: who owns the wealth?

If you look at income there is no doubt that the gap between the genders is narrowing. You can have a debate as to whether it is narrowing fast enough or to why it still exists at all, but the direction is very clear. And it is not just legislation that is driving this change, it is economics. The balance in skills needed in the workplace, at least in Europe and North America, is shifting towards women. But women have a further reason to feel short-changed. Shortchanged is the title of a book written by Mariko Lin Chang and argues that though the earnings gap may have narrowed, the wealth gap remains huge.

Right now, according to the Boston Consulting Group, women control only about a quarter of the funds available for investment in Europe and one-third of the funds in the US, and even less in the emerging world. That, surely, is the next great issue to be tackled, for if women controlled more of the world's wealth, the world would indeed be a different place.

Samantha Dodds,19

Mechanic, Vickers garage, Northallerton

Nobody expects a girl to walk out of the garage; it's great when you see people's reactions. To be fair, people are always cheering me, saying 'Good on you' – I've never been shot down. And I didn't doubt myself.

There are some things that are challenging, that you need man's strength for, but I really enjoy the job. I've always been a tomboy; I've been brought up in quite a male area. I'm an only child, but my dad's a farmer so I've always been on the farm. When I was younger, I wasn't going out with the girls, I was lambing with dad.

I think I am on an equal pay with male mechanics, although I'm still studying – I'm just finishing my training this year.

But I was very lucky with where I chose to ask for a job. I knew a girl at college who was desperate for an apprenticeship, but she struggled like hell, and she did feel she was turned down purely because she was a girl. It was a shame; now she's given up. Some employers think you can't do it, you don't have strength, or they worry that later down the line you might get pregnant. They were turning her down without a chance. But we do need a chance – we can do it.

I never considered that I would become a mechanic. But I had quit college at 16 after starting to study public services, and sat on my backside for seven months. I hung out with mates who were mechanics, and thought, 'I could go for that'. So I walked into Vickers garage and asked if I could have an apprenticeship, and they didn't look twice. I had a three-month trial – and I've been here ever since.

I don't think they've ever regretted it. They've seen an increase in female customers, plus a younger generation coming in; it's helped the business to grow. To be honest, some women come in and don't know what they're talking about. They can feel a bit thick when they talk to mechanics – so sometimes it is easier talking to a girl.

People still don't believe me when I tell them what I do. But it's girl power – we can do what we want. If you work and study hard, then why not? It's a very good opportunity to get men's eyes open. And more employers need to open their eyes – that's partly why I'm doing it, to prove we can. We're not all girly-girls, some of us like to get our hands mucky, to get stuck in.

It's not a job for people who paint their nails every five minutes, but for people who like to have a laugh, who get on with lads, it's a good place to be.

Julie Meyer, 44

CEO of Ariadne Capital and dragons' den judge, london

My father, when I was 11, said 'Julie, don't ever think it's a man's world' – and I never have. It would make me feel defensive and up against something that was insurmountable. I've set up my own business a number of times; the model of not trying to break through the ceiling but building my own cathedrals is the one that works for me.

We do have an issue, if you believe it's a 'good thing' having women on the board. But do most businesswomen want to be on the boards of FTSE 100 companies? I'm not sure they do. Is that a problem? I'm not sure it is. I'd rather join a business that is looking for my expertise, than a board I have to fight my way on to through quotas.

There's a certain prehistoric view that if women have more power, authority, success, it takes that away from men. It doesn't. We can have more success, and it helps men have more success, and it makes the world a better place. But some men don't see that yet.

The world is becoming more feminine. The network orientation that's happening all over the world today is something which works more for the feminine mind. It's a generalisation, but women tend to think circular, network, community. The world is moving that way – everyone's coming over to the way I think!

Women can be their own worst enemies. We need to put on our armour in the morning, to go out there and be super-heroes. We're far too modest, and a little chutzpah could go a long way.

Dr Helen Wright, 40

Head of St Mary's school, President of the girls' school association, Wiltshire

Is education still a male-dominated profession? Yes, the majority of headteachers are male. Is everything at a senior position dominated by males? Yes.

I moved into girls' schools specifically because I felt very strongly about these issues. Nobody ever told me what I should be doing to get to the top. I'm absolutely passionate that you need to have mentors for young women, to give them that confidence to challenge things. And I did challenge things. But I look back and I think it shouldn't have to be that hard.

It is difficult for a government – at what point do you say enough is enough, we're putting legislation in place? Senior people need to stand up and say, 'We should be working towards 50/50'. No question – company boards benefit from diversity. But something is stopping women leaping on to these boards; it will be a mix of confidence and structure. So, you can impose from above, and you can work from below. And we should do both.

That's my job. Girls' schools are an environment where you can say, 'You can do anything – don't be held back by structures that have just always been there'. We talk about this very explicitly, and we talk about it a lot. Most of my assemblies are probably about this!

I took my daughter, Jessica, back to work the day she was born. There was a lot of fuss, but the girls were indignant that anyone should say anything negative. We live in the 21st century – flexible working can be done. We've got to be a lot more decent about what we say about people's choices.

Faye White, 32

Arsenal club captain, England women's football captain, London

In the past, some people didn't think women should play football. There were certainly a few barriers of people's perception, and with the media – it wasn't seen as something anyone would watch so they didn't report it. Nowadays, it is changing. The success of the England team has helped raise the profile – games getting on TV has helped to widen the net and is changing people's opinions.

We always had to play catch-up with the men's game – but lots of other sports struggle as well, to pay both men and women. It's a catch-22: you need to be good in order to get people interested, but you need money to get good.

The new FAWSL league will hopefully be more sustainable, with girls being able to earn a bit of money. Eight clubs will form an elite league, which will play from April to October. There will be highlight packages and live games shown on ESPN, and part of the criteria is to get sponsors for individual clubs, and to get coverage in the papers; the idea is to make it a viable commercial product.

Clubs have to show that they can run as a business, and the FA is also putting funding in. Players will earn a bit of money for playing, and some will work with the club – in coaching, development, working as ambassadors in education, PR, community work. If girls can earn money within the club, and for training, it means they're not trying to balance football with full-time work.

We do want to be good role models. I go into schools, and the reaction I get to the Arsenal logo is incredible, whether I'm a girl or not. These days, 20 or 30 girls will put their hands up, wanting to play – when I was growing up it was only me!

It's not been easy, though, having to break through the idea that girls shouldn't play. It's good to show it can happen and it can change.

I've gone from having to pay to play to now having a full-time salary. I am living on football. Although obviously it's not at the stage where we can get loads of money like the men – that's like a different planet, and I'm not sure it will ever get there.