The British Equality Trap: Equal Pay for Unequal Work

By John Gustavsson

Saturday, May 09, 2026

 

Over the past 50 years, most countries in the West have passed laws banning employers from wage-discriminating on the basis of sex. The United Kingdom, however, has gone one step further: Its Equality Act targets not just outright discrimination but also differences in pay stemming from men and women choosing different roles. Under the act, work of “equal value” must be paid the same — and it’s not the market that determines value. And put simply, this policy has done unquestionable damage to British communities and to the economy.

 

In Birmingham, for example, female public-sector employees working as anything from carers to lunch ladies have used the law to demand that they be paid the same as male garbagemen, arguing that their work was of equal value to the general public. The city (correctly) argued that higher pay was needed to attract staff for dangerous, physically demanding work like sanitation.

 

The courts, however, disagreed. In response to the ruling, the city attempted to restructure public services and remove some of the higher-paying, male-dominated roles, which of course caused an uproar. In the fall of 2023, Birmingham was forced into bankruptcy. The garbagemen have now been on strike for over a year, and trash is piling up in the streets.

 

The blame for this can be placed squarely on the U.K.’s Equality Act. The Act was passed in 2010 during the final month of Gordon Brown’s Labour government. The Tories, either unwilling to fight a culture war or unable to see the destructive potential of the legislation, left it in place. At first, damage was limited, with relatively few claims filed.

 

But this would change in 2024, when the retail chain Next lost a case brought by its female employees, who successfully argued that Next’s practice of paying warehouse and distribution workers more than cashiers and other shop-floor workers constituted discrimination.

 

This legal precedent opened the floodgates — and the deluge of court challenges continues. On May 1, hearings were held in a nearly identical case involving Britain’s largest retail chain Tesco, which faces having to pay £4 billion in compensation (equivalent to almost two years’ worth of profits). Crucially, the Equality Act allows for claims to be backdated: A business that wasn’t knowingly discriminating against anyone but was just hiring based on market rates can at any point find itself owing up to six years in back pay to its “victims.”

 

The Equality Act is but one component of Britain’s recent obsession with equality. Today, wage compression in Britain is even worse than it was in the Soviet Union. Yes — Britain, with its heavily regulated market economy, has achieved a flatter income distribution than even the communist Soviet Union.

 

Income distribution actually flattened further under the Conservative government that ruled from 2010–2024. While the Tories did cut taxes for low- and middle-income earners, they lacked the political courage to cut taxes for high-income earners, who instead actually saw their tax bills rise. At the same time, the Tories introduced new benefits cliffs that meant earning more resulted in losing benefits that previously weren’t income-tested, a move that effectively raised the marginal tax rate around the cut-off points. In Britain, if you are a family with young children, you are now generally better off making £99,000 than £149,000.

 

Instead of reforming the means-testing, Labour is now making matters worse by closing a loophole that allowed high-income earners to reduce their taxable income and avoid the “tax trap” through pension contributions. This move will discourage private pension-saving at a time when Britain, like many other Western countries, is already struggling to care for its aging population, and, by forcing more high-income earners to pay punishing marginal tax rates, it will reduce the amount of work done by affected professions. Already, over two-thirds of British surgeons have reduced their hours explicitly to avoid the tax trap, for example, by working four days instead of five. Waiting times have increased as a result.

 

In New Zealand, an equivalent gender equality legislation was quietly and rapidly amended as soon as it became clear that it would be used to demand equal salaries for completely different roles. In Britain, on the other hand, Labour may soon go even further by introducing a racial equality act that would mean employees in (typically low-paying) immigrant-dominated roles could demand equal pay to those in roles held by ethnic Brits. Labour promised legislation to this effect in its election manifesto, and it was also included in last year’s King’s speech — though some recent reports indicate that work on this matter has been paused for now.

 

Even now without race included as a category, the Equality Act has already made its ignominious mark — and it will continue to. No business can afford to pay its cashiers what they pay its warehouse workers; instead, as in Birmingham, the end result will be that certain high-paying roles will be eliminated.

 

Furthermore, while some cashiers may find themselves earning slightly more, others will find themselves out of work, as cities and businesses put even more effort into automation to afford payroll. Women could also end up facing a tougher job market, as businesses will be wary of hiring someone who, even years after working for an agreed-upon market-rate salary, may sue them for wage discrimination.

 

There is no doubt that women still face unique challenges in the workplace, including discrimination, stereotyping, and harassment. One can also make a strong moral case that certain female-dominated professions (e.g., care work) are underpaid. Yet this does not justify the heavy-handed bureaucratic nightmare that is the Equality Act, which effectively leaves the determining of a “fair wage” for any given kind of work in the hands of an employment tribunal, rather than the free market.

 

Now, while British politicians are busy discussing what additional bureaucracy, taxes, and spending their country needs, bond yields are already spiking to 30-year highs in response to what it already has. Markets do not care about political correctness, and until Britain finds itself another leader in the style of Margaret Thatcher, it will remain an economically stagnated, red-tape-riddled cautionary example for the United States.