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Research on Open Data and Transparency


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Gender Pay Gap Transparency: Will It Work?

Gender pay gap two

In July this year the BBC, with a bang and probably a muffled whimper, released details of its highest earners. It predictably provoked outrage at the overpaid but also, less predictably, re-ignited the debate on the gender pay gap. Political leaders were quick off the mark to condemn the stark gap between male and female presenters. Theresa May criticised the BBC for paying women less for doing the same job as men and Jeremy Corbyn suggested a pay cap.

How Big is the Gender Pay Gap in the UK?

Measuring the gap is tricky. Here’s a summary from the ONS of some of the key figures for the UK in 2016:

  • Average pay for full-time female employees was 9.4% lower than for full-time male employees (down from 17.4% in 1997).
  • The gap for all employees (full-time and part-time) has reduced from 19.3% in 2015 to 18.1% in 2016 (down from 27.5% in 1997).

So the gap is nearly 10% or 18% depending how you measure it. This FOI request shows how the gap has altered in the past decade or so in the UK. The pay gap is high, and higher than the UK, in many other parts of the EU, where the UK sits about seventh from the top: ‘across Member States, the gender pay gap varied by 21 percentage points, ranging from 5.5 % in Italy and Luxembourg to 26.9 % in Estonia’.  To get some sense of the scale of the problem, in 2015 ‘women’s gross hourly earnings were on average 16.3 % below those of men in the European Union (EU-28) and 16.8% in the euro area (EA-19)’.

Gender pay

So what’s being done?

Something, finally. Successive governments have been determined to open up gender pay. Gender pay transparency is actually a Labour policy from long ago in 2010. Theresa May’s sound and fury has been heard before. Back in 2010 a certain Theresa May, writing in the Guardian no less, already claimed she was ‘clearing a path towards equal pay’ in 2010.What she forgot to say was that the Conservative-Liberal coalition she was part of didn’t actually engage the requirement to publish gender pay, contained in section 78 of (Labour’s) Equality Act of 2010. They wished to pursue a ‘voluntary scheme.’ Alas, few volunteered. Four years into the scheme only 4 companies had reported.

David Cameron, in a second wind of revolutionary ardour, committed to engage mandatory reporting (5 years after not doing so). This would ‘eradicate gender pay inequality’. All companies over 250 employees would have to publish the data. As of April 2017 companies have a year to produce the data and a written statement explaining, if there is a gap, what action will be taken. After 2018 organisations not publishing will be contacted by the Equalities and Human Rights Commission. The light of transparency will, it is hoped, end pay inequality.

How’s it going so far?

Although a number of companies have been voluntarily publishing the data, as of May 2017 only 7 companies had reported. An email from the GEO from July informed me there were now 26 and, according to a spreadsheet on data.gov.uk, there are now 40.

That’s from an estimated 7,000 companies with 250 or more employees. On a very generous rounding up, that means only 0.57% companies have reported. At this rate, if the Equalities and Human Rights Commission must send out notices next April, they’d better fire up the old email wizard or buy plenty of stamps.

There is also concern over the coverage of the policy, as this paper argued:

Only around 6000…of the 4.7 million businesses in the UK have more than 250 employees. Thus, around 59% of employees would be unaffected by the provisions if reintroduced in their current form.

The government calculated that the pay gap reporting would cover 34% of businesses with a further 12% covered by regulations for public bodies, meaning ‘approximately 8,500 employers, with over 15 million employees’ would be opened up.

The Women and Equalities Select Committee argued that the data needed to be broken down by age and status, and applied to companies with less than 100 employees-moving to 50 in the next two years (the government argued smaller businesses may find it ‘difficult to comply due to system constraints’). May appeared to promise further action on gender pay before the General Election and there was a mention of more data in the manifesto but, like much in that doomed document, we’ll probably never know what, if anything, was intended.

What will publication do?

On a practical level much may depend on how the data is published and who accesses or uses it. Underneath this is a serious question for all transparency policies: what exactly will publication do? While opening up such data is useful, measuring gender inequality is highly complex and a ‘moving target’ and is caught within wider issues of female representation in public life, professions and boardrooms. There is a long way between publishing data on a problem and ‘eradicating’ it.

In the case of the BBC, the controversy has led to a letter and high profile lobbying but will it lead to real change? Tony Hall has set a deadline for action (2020) and promised representation and consultation. Now FT journalists may strike over it and Sheryl Sandburg has weighed in.

The former Secretary of State for Equalities spoke of how publication of gender pay gaps would have benefits in terms of ‘transparency, concentrating the mind and helping people make employment decisions’, all of which are either a bit tautological (transparency will make everything more transparent) or vague. More worryingly, a survey for the Young Women’s Trust found that many business were unconvinced ‘44 per cent of those making hiring decisions say the measure introduced last April will not lead to any change in pay levels’. In the 2016 the Women and Equalities Select Committee concluded that pay publication focuses attention on the issue but is not a solution: ‘It will be a useful stimulus to action but it is not a silver bullet’ and recommended that ‘the government should produce a strategy for ensuring employers use gender pay gap reporting’.

As the committee put it, openness is ‘a first step for taking action rather than an end in itself’. It is hoped that publication could drive up pay and standards-though the evidence of what publishing pay generally does is rather mixed (publishing executive pay appears to push overall pay up not down). Companies could be embarrassed into action but could, equally, ignore it, wait for the storm to blow over or kick it to the long grass with a consultation.

As with all sorts of openness, mandating publicity is only the start. Gender pay data must not sit on a spreadsheet but needs to wielded, repeated and find a place as a staple, symbolic benchmark-and become, like the ‘scores on doors’ restaurant star rating, a mark of quality or reason to avoid.

Images from UK government equality report and EU gender pay gap pages

 


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Up, Down or No Change: What Happens When You Publish Salaries?

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In a blaze of publicity, the BBC has now published the pay of its top earners (you can see the full 16 page annexe here). Given the government is also committed to opening up corporate pay across the private sector, what actually happens when you publish salaries? Does the force of terrible headlines and an outraged public help reduce out of control pay packets? Or is the result, as the BBC Director General warned, really inflationary, driving up pay?

It is, of course, quite tricky to measure this sort of effect. This study of what happened when academic pay in Canada was made public concluded that publishing had no effect on pay levels (it also said academics weren’t paid enough. I digress). However, other evidence, such as this piece on opening up German executive pay, found a so-called ‘ratchet effect’ with disclosure increasing overall salaries by creating upward pressure from colleagues who demand to be paid better. One detailed study of CEO pay from the 1930s found openness had a generally upward effect:

 …disclosure did not achieve the intended effect of broadly lowering CEO compensation. If anything, and in spite of popular outrage against compensation practices, average CEO compensation increased…The evidence suggests an upward “ratcheting” effect whereby lower paid CEOs…experienced relative gains while well paid CEOs…were not penalized (Mas 2016, 1).

It concluded that only ‘the most salient and visible wages’ were ‘restrained’-so Gary Lineker and Chris Evans could get a wage cut but everyone else could get an increase. So the evidence actually says, at the very best, publishing has no effect on driving pay downwards and could well drive it upwards. The focus on levels of pay also obscures other important issues around performance and exactly how people are paid. Perhaps the bigger story is over the BBC gender pay gap and perhaps publication could help close a pretty scandalous discrepancy (blog on its way on this).

However, this evidence only takes us so far. Pay levels in the entertainment sector may work very differently from academia (insert entertainment related joke) or ‘normal’ CEOs. The BBC is rather a unique institution and any popular judgment could be bound up in views of the BBC itself, which the public appear to love. This could account for the fact a full quarter of those asked think the pay is OK and only 53% think it’s too high. But maybe public opinion about pay is quite nuanced. Even this poll about MPs’ salaries in 2013 found 60% of Britons think Members of Parliament get paid too much but 28% felt MPs were ‘paid about the right amount’ and a full 5% ‘think Members of Parliament are paid too little’.

The difficult of measuring anything is about what to measure it against-what’s the benchmark being used? Compared with the average UK salary of £ 28,200 then the amounts are eye-watering. However, the pay of almost anyone of note in the UK is compared with the Prime Minister, whether it’s Chris Evans, 9,000 public sector workers or 24 employees at Kent and Medway council. The problem for any comparison is that the last two Prime Ministers have, bless them, taken a 5% pay cut and a self-imposed pay freeze since 2010 and so Theresa May has to scrape along with a measly £150,402  instead of the £152, 532 she could have won. For any Prime Minister there is, remember, a free central London house in a very desirable location plus weekend ‘chillin’ pad and £64,000 pension. Luckily for Theresa May, a Prime Minister is entitled to a ‘pension equal to one half of their final salary when the leave that office, regardless of…length of service’.

So, as with many eye-catching transparency reforms, it’s not clear exactly what will happen in the weeks, months and years after publication. Certainly there is a principled reason publishing such data. But the evidence suggests that there’ll be no great BBC pay cut and it could push some pay higher. Ironically, it could be worth a few days of Twitter storm each year for a nice salary boost.

 


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Friday lunchtime lecture: Brexit and open government in the UK – 11 months of May

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Come along to my talk

Friday 14 July 2017, 1:00pm – 2:00pm

Open Data Institute, 65 Clifton Street, London, EC2A 4JE

https://theodi.org/lunchtime-lectures/friday-lunchtime-lecture-brexit-and-open-government-in-the-uk-11-months-of-may

How has Brexit influenced the UK’s transparency regime and how, in turn, will openness will shape Brexit? There are three ways of looking at Brexit and open government: 1) possible changes to old policies and new ones being pushed, 2) the new Prime Minister either championing transparency or supporting secrecy, and 3) the openness of the Brexit process itself, which has so far struggled between the executive’s secretive prerogative powers and the legislature’s rights to know.

May’s government will be seen as one that prized secrecy but conceded openness, an object (and abject) lesson in how hard it is to keep government closed in the 21st century. The May administration 2016–2017 is likely to be remembered as a secretive one, headed by a Prime Minister that wished to govern through confidentiality and closed networks. There were some high-profile openness policies, but they were inherited and slow.

In this lecture, Ben Worthy will explain how Brexit shows how badly the approach misfired. The government’s plan of no ‘running commentary’ and secrecy was undermined by the Supreme Court, the UK Parliament and the EU Commission – who all forced greater transparency and greatly limited May’s room for manoeuvre and concealment. The three institutions – creating and using ‘institution friction’ to open up government – also exposed the government’s lack of preparation and undermined the UK’s credibility and leverage even before Brexit began.

You can read the paper here

 


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New Paper: Brexit and Open Government in the UK: 11 Months of May

Westminster Terrorist Attack Statement

This paper examines how Brexit has influenced the UK’s transparency regime and how, in turn, will openness shape the UK’s Brexit process. There are three ways of looking at Brexit and open government: through possible changes to old policies and the pushing of new ones, through the new Prime Minister championing transparency or supporting secrecy, and the openness of the Brexit process itself, which so far has seen a struggle between the executive’s secretive prerogative powers and the legislature’s rights to know.

May’s government will also be seen as one that prized secrecy but conceded openness, an object (and abject) lesson in how hard it is to keep government closed in the 21st century. The May administration 2016-2017 is likely to be remembered as a secretive one, headed by a Prime Minister that wished to govern through confidentiality and closed networks. Though there were some high profile openness policies they were inherited and proceeded slowly, if at all.

Brexit reveals how badly the approach misfired. The government’s plan of no ‘running commentary’  and secrecy was undermined by the Supreme Court, the UK Parliament and the EU Commission, who all forced greater transparency and greatly limited May’s room for manoeuvre and concealment. The three institutions, creating and using ‘institution friction’ to open up government, also exposed the government’s lack of preparation and undermined the UK’s credibility and leverage even before Brexit began.

Read the paper here https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2988952


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Donald Trump’s Secrecy Problem

Most US presidents that want to shake things up want to open them up too. From Woodrow Wilson to Barack Obama, those wanting to change the system have championed greater openness, whether by promoting openness in international affairs or rebooting FOI and Open Data. ‘Sunlight’, they would almost always say, ‘is the best disinfectant’. Even LBJ, albeit reluctantly, became the father of the first US FOI law when he sulkily signed the 1966 bill.

This is not to say that they stay open and ‘sunny’. Most radicals go off being open. Some do it quickly, some do it slowly, but go off they almost always do. Woodrow Wilson, for all his promises, introduced the 1917 Espionage Act and hid his severe illness in 1919 from the public for two years (and his wife governed, giving the US a secret female president between 1919-1921). For all his promises, Obama also clamped down hard on leakers. As Sissela Bok put it:

‘How many leaders have come into office determined to work for more open government, only to end by fretting over leaks, seeking new ways to classify documents and questioning the loyalty of outspoken subordinates?’ (Bok 1986, 177).

Donald Trump seems to have skipped the ‘open government’ phase entirely and gone straight to the fretting. Greater transparency is not part of his big 100 day plans. Trump isn’t even transparent about the smaller things presidents are generally open about. In the US candidates and office holders regularly publish their tax returns as a matter of course. Details of Obama’s falling income were on the White House website and you can see Reagan’s, Nixon’s, Truman’s and some of FDR’s on the great Tax History project site. Hillary Clinton’s returns are here and Bernie Sanders’ (possibly incomplete) ones here. Presidents also release medical records. Except, of course, Donald Trump, who released a rather brief statement that his doctor later confessed to have written ‘in a few minutes’.

All these little Trumpian secrets seem rather tame in comparison with ‘Russiagate’ that we see unfolding before our eyes (see this great piece for a detailed analysis and these 7 charts). This week the Senate hearings on Russian interference in the US election began in earnest while Mike Flynn, Trump’s former National Security Advisor, looks to go public. Though it isn’t clear what sort of scandal it is or where it may go, it is clear that all this secrecy is damaging the White House. Secrets almost always do three things: create suspicion, leaks and pressure to be open.

Problem one is that secrets makes people suspicious. Trump’s non-release of tax returns, for example, appears odder and odder – even Wikileaks is interested in it. As John Dean said, putting pressure on the FBI is not the behaviour of innocent people. And he should know: he was White House counsel for Richard Nixon 1970 until 1973.

This suspicion was encapsulated in Jeff Sessions’ cover up and non-answers to Congress. If, as defenders asserted after, it was normal to meet the Russian ambassador, why not say it? Why hide it? As Chris Hayes put it ‘there’s this pattern…in which there’s this kind of bizarre disassembling about the basic facts of the matter…do you understand why that reads to people as fishy?’ As the Onion put it, ‘Heartbroken Russian Ambassador Thought Special Meetings with Jeff Sessions Were Very Memorable’.

Problem two is that strident denial and clamping down kickstarts all sorts of informal openness. ‘The ship of state’, as the saying goes, ‘is the only known vessel that leaks from the top’. And Trump’s White House is extraordinarily and spectacularly leaky, as a result of factions, frustration and fear (not because of Trump’s phone). Even the administration’s attempts to clamp down on leaks leak.

Problem three is that secrecy attracts attention and motivates others to force you to be open. Trump’s supposed smokescreens and distractions via Twitter are spectacularly counterproductive. There are currently no less than three Congressional investigations ongoing (Senate intelligence, House intelligence and House oversight) all of whom will search, call witnesses and dig. Even Republicans in Congress, who have accepted his racism, sexism and mocking of the disabled, are beginning to want to know more. There’s also a joint intelligence services probe, run by many of the organisations Trump has outright insulted. On 20 March, the heads of the FBI and CIA, in Congressional hearings, contested Trumps’ wiretapping claims: as one observer put it ‘two months after taking office, Trump has implicitly been branded a fantasist by the heads of America’s largest law enforcement agency and its largest intelligence agency’. These investigations

…guarantee that the Russia cloud will hang over the Trump administration at least until the various investigations are over [this] could take months and possibly years to wrap up. All the while, speculation is likely to be fuelled by more leaks, and more embarrassing testimonies.

The media are pursuing Russia and, in a further echo of Watergate, are keeping the topic on the front pages. Meanwhile a whole host of FOI requests ask about Trump’s conflicts of interest with more than 3000 followers of this Trump FOI Slack channel and at least 184 requests on the requesting site muck rock (perhaps someone should invent a bot like this one).

As I wrote in relation to Theresa May, some politicians are born to be open, some achieve openness by accident and some have openness thrust upon them. The combination of suspicion, leaking and pressure is shining a light on the new president. Russia is now coming to dominate everything Trump does and undermine everything else. Soon there will be an attempt to answer the most dangerous question in politics – why? There may never be a smoking gun, but the glimpses and hints at a truth, and the drip of revelations, are likely to be deep, dangerous and damaging. Even in the very unlikely event there is no gun, just smoke, remember it’s the smoke that normally kills. Trump will regret he wasn’t more open from the start.

Ben Worthy is a Lecturer in Politics at Birkbeck College. His new book The Politics of Freedom of Information: How and why governments pass laws that threaten their power is published by Manchester University Press. You can read chapter 1 here.


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New Paper: Brexit and Open Government in the UK

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Abstract:

How will Brexit influence the UK’s transparency regime and how, in turn, will openness shape the UK’s Brexit process? There are three ways of looking at Brexit and open government: through possible changes to old policies and the pushing of new ones, through the new Prime Minister championing transparency or supporting secrecy, and the openness of the Brexit process itself, which so far has seen a struggle between the executive’s secretive prerogative powers and the legislature’s rights to know.

 

Download the paper here

 


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Some collected new (ish) work on FOI and Open Data

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Some collected new (ish) work on FOI and Open Data. All are free to access on the links…

Worthy, Ben and John, Peter and Vannoni, Matia, Transparency at the Parish Pump: A Field Experiment to Measure the Effectiveness of Freedom of Information Requests (December 4, 2015). Available at SSRN: https://ssrn.com/abstract=2699198 (see also FOI man’s excellent summary here and this longer assessment 201607-parishcouncils)

Worthy, Ben, Freedom of Information and the Media (September 12, 2016). Available at SSRN: https://ssrn.com/abstract=2837762

Worthy, Ben and Hazell, Robert, Disruptive, Dynamic and Democratic? Ten Years of Freedom of Information in the UK (December 28, 2015). Parliamentary Affairs, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2708768

Worthy, Ben, The Impact of Open Data in the UK: Complex, Unpredictable and Political (March 5, 2015). Public Administration 93 (3): 788-805, 2015. Available at SSRN: https://ssrn.com/abstract=2806876