Kate Andrews's comments on Cameron's pay gap pledge feature in the Guardian and Daily Mail

Head of Communications Kate Andrews's comments on the Prime Minister's pay gap pledge have featured in the Guardian and Daily Mail. From the Guardian (page 1):

Kate Andrews, its head of communications, said: “According to the ONS, women between the ages of 22–39 working more than 30 hours a week earn, on average, more than their male counterparts.

“Forcing businesses with more than 250 employees to publish their ‘pay gaps’ will only promote more myths and confusion. There is no such thing as an ‘average salary’; education, previous experiences, negotiating tactics, and unique abilities all contribute to one’s salary, none of which can be known by comparing John and Jane’s annual take-home pay on a spreadsheet.

“Furthermore, men and women often choose to make different career decisions – usually based on flexibility and rigour – so they can embrace other, equally meaningful parts of their life; this, naturally, can be reflected in their pay.”

Read the full article here.

From The Daily Mail (page 4):

Kate Andrews, from the Adam Smith Institute, said: 'There is no such thing as an "average salary". Education, previous experiences, negotiating tactics and unique abilities all contribute to one's salary, none of which can be known by comparing John and Jane's annual take-home pay on a spreadsheet."

Also, from the Mail Online:

Kate Andrews at the free-market think tank the Adam Smith Institute said: ‘Men and women often choose to make different career decisions, so they can embrace other, equally meaningful parts of their life. This, naturally, can be reflected in their pay.’

Read the full article here.

 

Kate Andrews's comments on the gender pay gap feature in City AM, Huffington Post and IBTimes

Head of Communications Kate Andrew’s comments on the Prime Minister’s pay gap pledge have featured in City AM, the Huffington Post UK and the International Business Times UK. From City AM:

“It’s a sad state of affairs when even the Prime Minister is promoting the gender pay gap myth. According to the Office for National Statistics, women between the ages of 22-39 working more than 30 hours a week earn, on average, more than their male counterparts,” said Kate Andrews from free-market think tank the Adam Smith Institute.

“Education, previous experiences, negotiating tactics, and unique abilities all contribute to one’s salary, none of which can be known by comparing John and Jane’s annual take-home pay on a spreadsheet.”

Read the full article here.

From the Huffington Post:

Commenting on Cameron's announcement, Kate Andrews of the Adam Smith Institute said it is a “sad state of affairs when even the Prime Minister is promoting the gender pay gap myth.” Andrews noted that according to the ONS, women between the ages of 22 – 39 working more than 30 hours a week "earn, on average, more than their male counterparts.”

"Forcing business with more than 250 employees to publish their ‘pay gaps’ will only promote more myths and confusion,” she said. “There is no such thing as an ‘average salary’; education, previous experiences, negotiating tactics, and unique abilities all contribute to one’s salary, none of which can be known by comparing John and Jane’s annual take-home pay on a spread sheet.”

"FTSE 100 companies have met the proposed target for 25% female board members not because the government told them to, but because women, through their own abilities and determination, are thriving in the work place more than ever before. But leave it to the government to try to usurp their achievements," she said.

Read the full article here.

From the International Business Times UK:

The Adam Smith Institute, a free market right-leaning thinktank also opposes the move, saying that it was a "sad state of affairs when even the prime minister is promoting the gender pay gap myth."

The institute's head of communications, Kate Andrews said that forcing businesses to publish their pay gaps will only promote more myths and confusion. "There is no such thing as an 'average salary''; education, previous experiences, negotiating tactics, and unique abilities all contribute to one's salary, none of which can be known by comparing John and Jane's annual take-home pay on a spreadsheet."

She said men and women also make different career decisions to allow them to embrace other parts of their life and this, naturally can be reflected in their pay, according to the Guardian.

Read the full article here.

Press Release: The gender pay gap is a myth

For further comments or to arrange an interview, contact Kate Andrews, Head of Communications, at kate@adamsmith.org | 07584 778207. Commenting on David Cameron's announcement to make businesses with 250+ employees publish their pay gap figures, Head of Communications at the Adam Smith Institute Kate Andrews said:

It’s a sad state of affairs when even the Prime Minister is promoting the gender pay gap myth. According to the ONS, women between the ages of 22 – 39 working more than 30 hours a week earn, on average, more than their male counterparts.

Forcing business with more than 250 employees to publish their ‘pay gaps’ will only promote more myths and confusion. There is no such thing as an ‘average salary’; education, previous experiences, negotiating tactics, and unique abilities all contribute to one’s salary, none of which can be known by comparing John and Jane’s annual take-home pay on a spreadsheet.

Furthermore, men and women often choose to make difference career decisions – usually based on flexibility and rigor – so they can embrace other, equally meaningful parts of their life; this, naturally, can be reflected in their pay.

The Prime Minster’s claim that the implementation of the National Living Wage will primarily help women in lower paid jobs is a weak justification for another recent policy faux pas. It is women, particularly who are less-skilled or less-educated, who are most likely to be part of the 60,000 who are estimated by the OBR to be cut by their employers when they are unable to afford this wage increase.

FTSE 100 companies have met the proposed target for 25% female board members not because the government told them to, but because women, through their own abilities and determination, are thriving in the work place more than ever before. But leave it to the government to try to usurp their achievements.

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.

Sam Bowman's comments on the Summer Budget in the Financial Times

Deputy Director Sam Bowman's comments on the Chancellor's latest Budget have featured in the Financial Times.

Sam Bowman of the Adam Smith Institute denounced the chancellor’s decision to impose a £7.20 minimum wage on business from April as a “disaster that will condemn tens of thousands of people to long-term unemployment”.

Mr Bowman wrote: “Almost all the most methodologically robust academic indicate that increases in the minimum wage kills jobs.”

Read the full article here.

New ASI Report: Scrap mandatory National Living Wage, slash taxes on low-earners instead

For further comments or to arrange an interview, contact Deputy Director Sam Bowman: sam@adamsmith.org | 07584 778207

  • Instead of imposing a mandatory National Living Wage, the Chancellor should take minimum wage workers out of tax and National Insurance, giving workers a similar level of post-tax income while avoiding the 60,000 higher unemployment and £1.5 billion lower GDP that the Office for Budget Responsibility predicts will accompany his plans.
  • Even if the minimum wage for the over-25s is increased to £9/hour under the current tax system, take home pay will be only 69p/hour above the untaxed level of the 2015 minimum wage. This difference will become even less significant considering planned increases in the minimum wage in the coming 5 years.
  • Without tax, working 37.5 hours a week on the minimum wage would bring workers to within 5% of the living wage.

Instead of imposing a mandatory National Living Wage, the Chancellor should give minimum wage workers a ‘living wage’-level income by slashing taxes on low-paid workers, according to a new paper from the Adam Smith Institute.

The paper, Abolish the Poor: How raising the Income Tax and National Insurance thresholds could give everyone a living wage, shows that income tax and national insurance contributions from low-paid workers are significant causes of in-work poverty, and argues that raising these thresholds to the full-time minimum wage level would bring minimum wage workers’ incomes to within 5% (up to 32p an hour or £670 a year) of the living wage.

This would avoid the 60,000 job losses and £1.5 billion hit to GDP that the Office for Budget Responsibility predicts will accompany his plans.

Even if the minimum wage for the over-25s is increased to £9/hour under the current tax system, take home pay will be only 69p/hour above the untaxed level of the 2015 minimum wage. This difference will become even less significant considering planned increases in the minimum wage in the coming 5 years.

The paper, written by ASI Senior Fellow Tim Worstall, also illustrates that in-work benefits are not a net subsidy to employers of low-wage employees, except to the extent that they attract more people into work. Economist Jesse Rothstein found that $1 of Earned Income Tax Credit (the US tax credit) spending results in $0.74 in higher wages to the recipient. This doesn't imply an $0.26 benefit to employers, however – if wages have only fallen because more people have entered the workforce, the ‘lost’ sum may be spread among other workers.

Employer-side national insurance contributions, which tax employment, also fall partly on workers’ wages and partly on job numbers. If the government truly wants to raise wages and improve the labour market at the bottom end, it should consider reducing their rate, increasing the threshold at which they kick in, and eventually scrapping them altogether. They are a pay-destroying stealth tax on workers.

Senior Fellow at the Adam Smith Institute and author of the report, Tim Worstall, said:

If we want to kill working poverty stone dead then all we've got to do is stop taxing the working poor so much.

The simple truth is that the difference between the current minimum wage, which it is said still leaves people working full-time in poverty, and the living wage which would take all of those working full-time out of poverty, is the incredible, unconscionable, amount of taxation upon incomes that we charge to people with those low incomes. By simply raising the national insurance and income tax allowance to the full year, full-time, minimum wage we can rid ourselves of this problem.

We may or may not take those who campaign about relative poverty to heart but why not take them seriously for a moment? If that living wage is all that is needed to entirely abolish working poverty in this country then the solution is in the hands of the government. Simply stop taxing those who make low incomes. For the truth is that we do not have low wage poverty in the UK, we have tax poverty.

ASI Head of Research Ben Southwood added:

There has been a lot of bluster around tax credits—the government and others have claimed that they 'subsidise' employers. But it's more true to say that employers 'subsidise' the government by taking on low-productivity workers and reducing the benefits bill for the government to pick up. Would the government rather they were in work?

Abolish the Poor is a timely reminder that we should look at evidence before we make ad-hoc eyeball judgements. Economics is complex and surprising and we cannot jump to conclusions.

Notes to editors:

For further comments or to arrange an interview, contact Deputy Director Sam Bowman: sam@adamsmith.org | 07584 778207.

To access the full report Abolish the Poor: How raising the Income Tax and National Insurance thresholds could give everyone a living wage, click here.

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.