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Labour market discrimination occurs when workers who are equally productive receive different pay or face different employment opportunities because of characteristics unrelated to their productivity — such as gender, ethnicity, age, disability, or sexual orientation. Understanding discrimination is essential for analysing wage differentials and evaluating government policy.
The gender pay gap is the most widely reported measure of labour market inequality. It can be measured in two ways:
Key Definition: The gender pay gap is the difference between the average (mean or median) earnings of men and women, expressed as a percentage of men's earnings.
| Year | Median Gender Pay Gap (full-time) | Mean Gender Pay Gap (all employees) |
|---|---|---|
| 1997 | 17.4% | 27.5% |
| 2010 | 10.1% | 19.8% |
| 2017 | 9.1% | 17.4% |
| 2023 | 7.7% | 14.3% |
Source: ONS Annual Survey of Hours and Earnings (ASHE)
Since April 2017, UK employers with 250+ employees must publish their gender pay gap data annually. This transparency measure revealed striking gaps in some sectors:
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