The Pay Gap and Prosecco

Tasting Notes: Prosecco is the go-to, affordable alternative to Champagne when you want to celebrate and is now the tipple of choice for many women across the UK. It has that air of class and sophistication while still remaining accessible to everyone.

Before I scare all those male readers away who are expecting a feminist attack on the horrors of a misogynistic business world, don't fret. That is not the point of this post.

As a young women starting out in my career, I am very aware of the gender pay debate. Having been educated at a same-sex independent school, I am also well versed in the 'dominant female' mindset and therefore even more vulnerable to the lures of feminism.

However, I would like to approach this topic in a more neutral manner and try to steer clear of the 'boy-bashing' which sometimes follows from an analysis of gender inequality.

Having said that, I do understand the issue.

According to the government report "Opportunities and outcomes in education and work: Gender effects" released in November last year by the UK Commission for Employment and Skills; "male workers are paid on average 19% more than female counterparts in almost all areas of the workforce."

The report goes on to say that: "women working in financial and insurance sectors, as well as other professional roles, are worst affected in the gap in pay - with some earning almost 40% less than men."

Admittedly, this isn't an ideal situation.

However, since the report was released the percentage difference has reduced to 18% continuing the downward trend from a 28% gap in 1993 and 23% in 2003. So that's a good thing, right?

A recent article in The Week entitled  "The gender pay gap UK: How bad is it?"  argued that the headlines mask some underlying variables which may be exaggerating the improvements. It claimed that the reason the headline gap has shrunk is due to women "becoming more educated and so able to work in better-paid jobs."

So maybe access to education is the issue here, not gender bias?

Think again.

Another one of the 'legitimate' reasons for the gender pay gap is childcare. Now this is a very flammable topic and even I was slightly put out by this comment in The Week's article, from Ben Southwood of the Adam Smith Institute:

"There is a gender pay gap, but the entirety of it is determined by 'legitimate' factors" Continuing on to say that "women leave the labour market during crucial years, setting them substantially back in labour market terms. That is, the gap comes down to women's choices."

I don't know why, but that last sentence did make me wince - "The gap comes down to women's choices." Ouch!

So is the gender pay gap simply the result of life choices? Can women realistically have a career and a family?

There is an army of career women out there who claim you can - and will shoot down any man who dares to suggest otherwise.

Radhika Sanghani, speaking in The Telegraph  proclaimed that it is just as much a man's job to help raise a family as it is a woman's, subverting the age-old family unit stereotype so characteristic of idealistic 50s suburbia. But this is not the 1950s.

Sanghani blamed the government for maintaining this status quo by having "lumped together equality, women and childcare, suggesting that all are 'women's issues."

She concludes that "childcare is not a woman's issue. It's everyone's issue and if we want to end the pay gap, it needs to be treated that way."

The Government has introduced a shared parental leave (SPL) scheme but the uptake has been extremely low, with only 4% of those eligible taking part. Admittedly this is probably due more to a need for economic security than a neglect of responsibility.

So what can be done?

From April next year, more than 250 employers in Britain will be required by law to publish gender pay gap statistics, hopefully shaming those who are guilty into action. But I can't help wondering if a diversity of skills, career choice and deciding to have a child are legitimate reasons for a pay gap.

I would hate to be a traitor to my sex here, but if this was a gender neutral issue and a higher paying job was given to a worker with the right skills, who was also prepared to work overtime rather than insist on part-time (should circumstances require it), I would accept that reasoning.

If the gender skills gap was down to the education system I would be more likely to voice some angst, but I can't see that it is. Schools offer STEM subjects regardless of sex. It's uptake that's the issue, and that is  down to choice, not availability. Plus, the recent GCSE and A-Level results showed, yet again, that girls achieve better results than boys.

Is it therefore 'choice'  which causes that 18% gap? Is Ben Southwood right?

Maybe he is. The Annual Survey of Hours and Earnings: 2015 released by the ONS last year commented that their findings on gender pay disparity were not actually based on "comparable jobs", claiming that the figures were "affected by factors such as the proportion of men and women in different occupations. For example, a higher proportion of women work in occupations such as administration and caring, that tend to offer lower salaries." 

The report also pointed out that part-time workers also get paid less than full-time workers and, once again, these are occupations that tend to have a female majority.

I think this is a very important point. Data has a habit of getting manipulated to fit certain conclusions, and while there is undoubtedly a pay gap in the upper-echelons of the business world - and I am fully behind this being exposed by the Government -it is not as pervasive in society as the media may claim.

It IS a woman's choice to have children, it IS her choice about what subjects to study, career to pursue, and how many hours to work and, unfortunately, these are factors that result in a lower salary, purely due to the demand for certain skills and cost of labour per hour.

This is not to say that women do not deserve the same pay as men when doing the exactly the same job, for the same number of hours. That is actually illegal under the Equality Act 2010.

In terms of women working in male dominated arenas, even politics is starting to diversify. We now have a female Prime Minister, a female home secretary and (I hope to high heaven) we will have a female President of the United States. But could this be down to choice, too?

Politics is male-dominated due to the personal qualities required to work in that environment. You must be on call 24/7, authoritative, thick-skinned and slightly arrogant. Some women are, but I can't help feeling those attributes are more inherently male.

Perhaps a lot of men do not choose a career in politics simply because it is not suited to their personality and I believe that is true of women, too. I am not ignoring the fact that a 'boy club' mentality does still exist, but the fact that there is a female presence now may result in a cultural shift - we can only hope so.

  The bottom line is that we should not be rejoicing because women are in these positions of power, but because they have earned the right to be there, just like any man would have done, and it was their choice.

It should not be about 'girl power' it should be about 'people power'.

The #HeforShe campaign is a perfect example of 'people power' over 'girl power'. We should be working together to reach fairness in the work place, championing people who seek equality, be they men or women, giving the jobs to those with the right skills and experience.

But I also think a certain amount of sensibility and realism should be employed (pun intended) when confronting this issue. Choices made by people will affect their career, and therefore pay, regardless of gender.

We are definitely not still suffering from the same kind of gender imbalance that was rife in the 50s. The situation is improving, and hopefully the upcoming government policy changes will shine a light on any issues that need addressing,


Why Prosecco?

Wikipedia defines Prosecco as a "less expensive alternative to champagne" and let's be honest, if given the choice we would all rather sip Champagne. But sometimes circumstances are not conducive to a champagne-lifestyle. And so it is with the gender pay gap.

Unfortunately (or fortunately), it's a woman's biological privilege to be a carrier of children. No man can take this job on. Yes, after the birth a great Dad will share some responsibility; but what if his main responsibility is to support the family while the mother wants to stay at home with the child? Circumstances mean that you can't always 'have it all', it's too expensive.

Prosecco has also acted as a great equalizer: it is a 'classy' beverage we can all indulge in. This is how the world of work should be. It should be an arena where everybody is on a level playing-field where males and females can pursue any career they wish to, achieving equal pay and opportunity for the same work.

A glass of fizz is no longer a privilege only accessible to the elite, it is now available to everybody and in most sectors this is also now true in terms of gender opportunity.

Finally, Prosecco grows stale with time, it does not ferment in the bottle. It should be drunk as young as possible to prevent wastage. In some ways I think this should be a message to all young women starting out in their career. If you make the most of the opportunities you have now, have an awareness of your value (using this handy little app), and continue to work hard, it should stop you getting stale over time.

And while the gender pay gap is not an issue to be ignored, I think we should remember not to let it take the fizz out of our Bellinis.

Metro Bank and Merlot

Tasting Notes: Enjoy with the Merlot you buy when you have had a bad day and you can’t be bothered to find a more exciting alternative.

The Competition and Markets Authority (CMA) have been busy bees recently, firstly offering their recommendations to OFGEM about how best to increase competition in the energy market, releasing the stranglehold of the ‘Big Six’, and more recently turning their attention to the banking sector to see what mischief they can cause there.

This latter pursuit is the subject of this week’s blog. You have probably heard about Metro Bank, the new kid on the banking block, hoping to win over part of the 77% market share the traditional big four currently enjoy.

(NB: The big four are: Lloyds Banking Group, Royal Bank of Scotland, HSBC and Barclays)

After seeing Metro Bank’s meteoric rise to success, other banks have entered the ring, prompting the CMA to step in and see what they can do to help them along a bit.

The report entitled “Making banks work harder for you” was published on 9th August, claiming to have identified the reasons why the big banks monopolise the market and offering recommendations for reform.

The CMA reported that; “Essentially, the older and larger banks, which still account for the large majority of the retail banking market, do not have to work hard enough to win and retain customers, and it is difficult for new and smaller providers to attract customers.”

So why do smaller banks find it so hard to win-over personal account holders and small businesses? Ultimately, it is a combination of ignorance, apathy and a massive teenage-like case of ‘can’t be bothered’.

The findings seem to conclude that a lack of knowledge about the ease and benefits of switching provider is the main reason only 3-4% of customers transfer to a different bank each year.

The supposed ‘difficulty of switching’ is a myth that the report seeks to dispel by noting that there is a Current Account Switch Service (CASS) currently available which seeks to make it easy for customers to change banks but, due to a lack of awareness, it is under used, making a transfer long and onerous in most cases.

The report also hopes to raise awareness of the fact that personal customers could be saving an average of £92 a year, and business customers £80 a year, if they switched providers. For overdraft users, the savings could be even higher: £180 on average, due to the hidden charges many overdraft accounts contain.

While ignorance of a better option is one excuse, and in some respects one that can be forgiven, a reason that is less easy to understand is the identification of a sort of 'loyalty'. A characteristic especially prevalent among small business account holders.

It was found that many business owners tended to have their business account at the same bank as their domestic account. This 'loyalty' and familiarity prevented them from shopping around due to the belief that it’s quicker and easier to open a business account if you stick with what you know. The big four currently hold 85% of small business accounts and grant 90% of small business loans. Metro Bank has been the only entrant into the SME banking market in recent years.

So the dominance of the major banks is not only a result of a lack of awareness, but also a lack of willingness to explore other options.

The perceived difficulty of moving banks, combined with an inability to easily compare what they have to offer, seems to lie at the heart of the matter.

So what have the CMA suggested? They’ve recommended a phone app.

Yep, that’s right: the main way to increase competition in banking is to introduce an Open Banking phone app which would allow personal account customers and small businesses to compare and manage numerous accounts, from different banks, via the secure sharing of data between banks and third parties.

This would be accompanied by a kind of glorified Net Promoter Score, where banks would be required to publish objective information on their quality of service, including whether or not customers would recommend the bank to their peers.

Combine this with the third recommended requirement, that banks should send out “suitable periodic and event-based prompts” when charges are altered or local branches close, and it is hoped that this enhanced transparency will encourage competition.

But will it?

Market watchdog Which? were one of the first to raise concerns, being quoted by the BBC as saying “it is questionable whether these measures will be enough.”

Concerns were also voiced over data security, with many asking whether the general public, let alone the banks, would accept such widespread data sharing.

And the challenger banks themselves? They branded it a major missed opportunity, failing to combat the disproportionate capital requirements and regulatory hurdles currently barring new entrants.

Without competition, the big banks will continue to hold a majority stake. But it is more than that: until customers take the leap and try something new, shaking off apathy and questioning loyalty, the status quo will not alter and no ‘app’ will change that.

Why Merlot?

Merlot is arguably one of the most popular red wine varieties in the current market. A flexible grape, it is one of the most widely-planted the world over, most notably in Bordeaux (France) and Chile. It is common, reliable and widely available.

When you’re in desperate need of a glass of vino, you can usually rest assured that a relatively cheap Merlot will be available on the shelves of any local supermarket, and you know you can just grab it and drink it with warm familiarity.

So it is with the big four banks.

They are always there, they are widely used, and they can be relied upon (generally) to do the job you ask of them. Yes, there is the odd 'duff' experience, but it doesn't stop you going back for more.For those for whom wine is not of paramount importance, Merlot is a name they know and one they can identify with. Again, it’s the same with banks: for those who are not particularly well acquainted with the particulars of the sector, the bank they (or their parents) have always banked with is an easy option that requires no real in-depth research.

A constant pruning of the vine is needed for Merlot to flourish, with reduced yields being rumored to result in a higher quality wine. It is also believed that the older the vine, the more characteristic the taste.

If we apply this to the CMA report, maybe then it is a good thing that the doors have not simply been flung wide open to new entrants. It could be a good idea to strip back the leaves and force the existing incumbents to expose themselves, forcing them to work harder, resulting in a lower yield but higher quality.

This may be taking the analogy too far… but next time you’re reaching for that ‘old faithful’ on the bottom shelf, ask yourself this - is there an option better suited to you out there? This app may help.

Enjoy!

Inflation Rates and Rioja

Tasting Notes: Enjoy with a nice Spanish Rioja Tempranillo, no need for a Reserva yet, it's still early days. Ideally find a 2014 vintage, a great year for the grape and also the last time inflation rates were as high as they are now. 

Yesterday saw the Office for National Statistics (ONS) release their July 2016 Consumer price inflation report, the first data set from the government covering the post-Brexit period. 

The Headline: A 0.6% increase means that inflation is now at its highest level since November 2014. 

Quick! Panic and blame Brexit, we'll all be penniless by Christmas!

No. Let's not panic, let's take a leisurely sip of wine and assess the situation.

Yes, sterling took a hit and yes, investor confidence is still down. But while the increase in inflation rates is undoubtedly the result of rising import costs, there are other factors in play.

When looking at the longer-term trends of inflation rate fluctuation, this 0.6% rise is minimal, and only seems high due to 2015 being a year of historically low inflation. Even the ONS made a point of stating that the rise is “still relatively low in the historical context.”

It’s still too early to speculate on the full impact Brexit will have on inflation, especially given the fact that ONS data is collected mid-month, so the vote to leave had only been decided 2-3 weeks previously. 

It was also only a month ago since The Spectator published an article entitled “Inflation is up. But don’t panic, it’s nothing to do with the Brexit”, calming fears that the 0.5% increase in June was a result of the vote to leave when, in fact, the data related to the period before the referendum had even occurred.

Mike Prestwood, head of prices at the ONS, even went so far as to say that “there was no obvious impact on today’s consumer price figures following the EU referendum results though the Producer Prices Index suggests the fall in exchange rate is beginning to push up import prices”. 

Admittedly, producer prices have risen by 0.3%, the fastest rate in 2 years, with the cost of raw materials also increasing by 3.3%.

But, wait! Could it be that the worst is over in terms of a declining exchange rate?

After the report was released, the pound rallied against the dollar, increasing by 1.3% to $1.3038. Could this suggest that sterling is starting a slow recovery?

Probably not, and it almost certainly does not mean we are 'out of the woods' in terms of post-referendum uncertainty. Future CPI data will give a better indication of the Brexit effect, a point confirmed by former monetary policy committee (MPC) member Andrew Sentence, now at PwC, who commented that “The big rise driven by a weak pound will take longer to come through – at least six to 12 months.”

Combine this with the Bank of England (BoE) warning that it is prepared to withstand a period of high inflation in order to stimulate growth and create jobs, this really is just the start of a necessary period of adjustment to the changing market conditions in which we now find ourselves.

Bringing it down to reality, what will this mean for the majority of us, in laymen’s terms?

1)     It’s worse news for savers, and those with pensions. With interest rates already at an all-time low (0.25%), an increase in prices is not going to help the situation.

2)     An increase in fuel prices led to a 1.6% increase in transport costs according to the Consumer Price Index (CPI). This is bad news for commuters as regulated train fares are set to rise again. The increase, determined by the old Retail Price Index (RPI), which always tends to be slightly higher than the CPI, means that, by January 2017, regulated rail fares will have increased by 1.9%!

3)     Real wages could suffer as employers struggle to match pay with rising prices. This will exacerbate the transport issue for commuters, as outlined above, and also put pressure on businesses, who will now need to balance an increase in import prices with a need to pay their workforce a living wage. However, with the BoE focusing on growth stimulation and job creation, the effect may be muted to some extent.

4)     And the worst news… alcohol is more expensive. Not only that, wine is to blame!! According to the ONS report, “the upward contribution came from alcoholic beverages” going on to say that “this was primarily due to prices for wine”. Damn it!

Why Rioja?

Well, Rioja is traditionally produced from a blend of various grapes and, similarly, this month’s inflation increase was caused by a blend of factors, namely depreciation of sterling and rising transport, alcohol and hospitality prices.

Rioja varieties are determined by how long they have left to age. Rioja is the youngest, spending less than a year in an oak aging barrel. Crianza is aged for two years, Reserva at least three and Gran Reserva has two oak barrel years followed by three in a bottle.

Given that it is still very early days post Brexit, the full maturity of the impact has yet to be reached, so stick with the baby for now. As a younger wine, it's also cheaper, which should help you out with the rising wine prices currently being experienced.

Rioja is an old grape with the earliest written evidence of its existence dating back to 873. Inflation must also be viewed in a historical context to get some real perspective on the situation.  

So there you have it, no need to panic, go pour yourself another glass.

Enjoy!

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Welcome to Read-Whine

Tasting Notes: Enjoy this post with a light and fruity Beaujolais, served slightly chilled as an aperitif.

Welcome to Read-Whine, the blog where wine and current affairs blend together in perfect harmony, making the seemingly 'boring', bearable. 

Pairing opinion on the latest political, economic and business news with a suggested tipple, I created this blog to combine two of my greatest passions, believing that one truly does complement the other. 

I have been ghost writing about politics, economics, business and current affairs ever since I left University and I thought it was about time to write in my own voice. 

A self-confessed Millennial, I am well aware that the opinions held by one so young may not be held in such high esteem as those voiced by world leaders and successful CEO's, but hopefully after a glass or two of wine, that won't matter so much. 

Why Beaujolais?

Beaujolais is often described as a "white wine pretending to be red". A light, fruity wine best served slightly chilled as an aperitif or with a light snack.

I am just political ingénue, interested in current affairs, pretending to be an expert. This is a light introduction with a fruity undertone, a relaxed start to what I hope will be a rich and stimulating experience hereafter.

Enjoy!

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