Press Release: CMI’s pay gap findings fatally flawed by not controlling for working hours

For further comments or to arrange an interview, contact Head of Communications Kate Andrews: kate@adamsmith.org | 07584 778207.

Commenting on the Chartered Management Institute’s findings on the gender pay gap, Head of Research at the Adam Smith Institute Ben Southwood said:

The Chartered Management Institute’s report makes a fatal error, completely undermining their findings that women work nearly 2 hours a day ‘for free’—they do not control for hours worked. Evidence we have suggests that women work fewer hours than men – they are not ‘working for free’.

Their survey of middle managers finds a pay gap of about £8,500, or 23% in average annual pay, but they have not released any information on average hours. As such, we are forced to assume they don’t have such data, an assumption supported by the fact that they rely on the average working week statistic from the ONS when they compute their dubious estimate of the time women allegedly spend working for free.

If they do not have any data on working weeks, then there is no reason to assume there is any hourly wage gap at all. A more reasonable assumption is that men are simply working for longer—since this is what other data has consistently told us.

A sophisticated discussion of the gender wage gap would include reference to data showing gender pay gaps are wider in more gender egalitarian countries, that women who never leave the work force are more likely to make CEO and earn more on average and that women aged 22-29 and 30-39 earn slightly more per hour than men at the median.

Notes to Editors:

For further comments or to arrange an interview, contact Kate Andrews, Head of Communications, at kate@adamsmith.org | 07584 778207.

The Adam Smith Institute is a free market, libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Should Tories celebrate Corbyn’s popularity? | Dr Madsen Pirie argues NO in the City AM debate

President of the ASI, Dr Madsen Pirie, argues that Jeremy Corbyn’s growing popularity is nothing for Tories to celebrate in the City AM debate:

Dr Madsen Pirie is founder and president of the Adam Smith Institute, says No

Some Conservatives want Jeremy Corbyn to win because they think he will prompt lasting divisions within Labour, and make the party unelectable in a general election. They should not celebrate too soon. Even if this is true, there is a short-term price to be paid. If Corbyn became official Leader of the Opposition, it would legitimise economic and political fantasy. Every day the media would have to treat his proposals as serious politics. The discussions would centre on things we already know are unworkable. We have seen how nationalisation ruins industries by making them serve political, not economic, objectives. We have seen how high taxes squeeze out growth, and how they drive out our talent and deter outside talent from locating here. We have seen how unfunded largesse targeted at selected groups creates a black hole of debt. A Corbyn-led Labour would make this a legitimate matter of public debate. It should not be, because it remains the same nonsense it was before.

Read the full debate here.

Kate Andrews discusses executive pay on BBC News and Sky News

Head of Communications Kate Andrews spoke to BBC News and Sky News about the value a CEO and top executives can bring to a global company, and how their decisions can translate into better, cheaper consumer products.

Watch the BBC News interview here. (Starts 19:15)

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Watch the Sky News interview here:

Capping bosses’ salaries will not raise salaries of people at the bottom | Kate Andrews writes for City AM

Head of Communications Kate Andrews writes for City AM:

Today’s briefing paper from the High Pay Centre (HPC) has zoned in on the gap between FTSE 100 chief executive pay and the average salary of UK workers in 2014: 183/1.

Perhaps it is the HPC’s emphasis – or perhaps it is the world’s recent focus on inequality – that has most people, in the media and elsewhere, focused on this divide. The assumption is that high executive pay is costing lower earners a pay rise, and that condoning people getting rich at the top is an endorsement of keeping people poor at the bottom.

But one does not cause the other; and while it is crucial that we tackle in-work poverty and address long-term low pay, capping executive pay will not raise the salaries of people at the bottom. Indeed, this could lead to negative consequences of its own.

Read the full comment piece here.