Chapter Three

INCOME FROM EMPLOYMENT

So far, everything you have read applies equally to men. Now things change a little. Figure 1 is a graph covering the life of a typical woman. We'll call her Eve. A graph is only a picture, so there is nothing to worry about, and the only figures in this one, are her age. The pictures show when, over her lifetime, Eve is most likely to have spare money.

Go to the bottom left-hand corner of  Figure 1 marked 0. The bottom line (called an axis) starts at birth and measures years. The vertical line also starts at 0 but this time it means £0. The higher the wavy line climbs up the page, the more money Eve has to spend at the age shown below.

So the graph tells us that Eve enjoyed virtually no money until she started to work at 16. There was no silver spoon: no fabulous earnings as a child star: no income from Granny's trust.

Figure 1

Eve did not earn much even then, because she was unskilled. Matters improved when she turned 18 and started to earn a full adult wage. From then on, Eve's available money started to increase quite nicely until at 25 she married Jeff. What reduced her income was not the fact that she married, nor the fact that the new couple started to buy a house. It was her pregnancy because it stopped her working.

So until 32, Eve had little money again. Then her younger son started school and she could manage a part-time job. But part-time workers normally earn little, with no chance of promotion. So Eve's income hardly increased until she reached 45. Then, with both children working, she too went back to work full-time.

No the family income really started to improve, because the mortgage was nearly paid off. Compared to earlier years of struggle, the payments seemed tiny. When she was 50, Eve's father died and left her some cash in a legacy. She took the whole family to the United States and, while it lasted, had a marvellous binge.

At 55 Eve had a shock. Jeff left her and started divorce proceedings. The solicitors pointed out that they both worked full-time now and had no dependent children. They suggested that a lump-sum settlement (cash) would be better than regular payments of alimony. Jeff and Eve agreed. The family home was sold and part of the proceeds provided the lump sum for Eve. She enjoyed a lovely cruise to get over the shock, then went on a spending spree to furnish the new flat she rented.

At 60 Eve has retired. Now she can claim some state pension because of her own National Insurance contributions when she worked and those of Jeff before the divorce. She never thought she might need to provide a private pension for herself because she relied on Jeff. Besides, she never had the money, except when she was very young and was more interested in a good time. Now at 60, she has little to live on and the prospect of another twenty-five comfortless years ahead of her.

Sad? Of course, but not uncommon. All the fault of the divorce? Only partly. If Eve and Jeff had stayed together, they would still possess the house they worked so hard for. In  a year or two, as they are much the same age, Jeff would retire too, and they could share his job pension. His state pension for the two of them would probably amount to less  than they now receive separately - a lot less if Eve claims supplementary benefit.

Blame it all on Jeff? He kept Eve all the time the family was growing up and gave her a fair divorce settlement when he left. Honest and hard-working, he did as much as anyone could expect. He does not reproach himself.

Perhaps he should have taken the promotion the firm offered him in his twenties, but it would have meant moving and they were happy where they lived.

Perhaps he should have accepted his brother's offer when he was 30 that the two of them should start up in business together. Their father wanted to lend them the money. But neither could manage the paperwork. Eve said she was too busy with the new baby and wanted Jeff at home.

Perhaps he should have thought of the future when he won that few thousand on the football pools in his thirties. But he'd always fancied a sports car and Eve enjoyed being seen out in it too.

No, the problem is that whenever Eve or Jeff had money or the chance of earning money, they did not take advantage of it. When you have read this book, you should be able to plan better.

Eve's life history may be nothing at all like yours. But her graph illustrates the problems that face all working women. So we will look at it again in more detail.

Take the period from 16 to 25. This is the first time when Eve is affluent. Obviously, the longer you can make this period last the better. This period usually sets the scene for your future lifestyle. This may well be the most important time in your life to earn.

It finishes, not because you get married or because you start a mortgage but because you start a family and so cannot earn. If you have children in your teens, the period is over almost before it began. (Obviously more and more women are returning to work, even full-time, while their children are tiny. If you honestly deduct from their wages, the cost of child-care and include the expenses of delivering and collecting the infants, you will often find that they work for next to nothing.)

Eve started untrained work at 16. If, instead, you continue your education and don't start work until 21 or 2 after your university course, or even later after professional training, you have squeezed your peak earning time still tighter. One female barrister I know never earned a penny until she was 25 and then peanuts until 30.

Besides, we all suffer the loss of money when our career hiccups because we lose our job, retrain, get married or have to follow our husband's career. My cousin Margaret's little boy had already started his third school at only 5 and a half. His father worked for a bank. Every promotion involved a new branch and a house move. At this pace, Margaret could not possibly have worked herself, even without a child.

All right, many women decide, I will have my family. But I will employ someone to look after the children out of my earnings. So they do. Jessie, for instance, handed over her entire salary to her nanny because she was so desperate to work. Was it worthwhile? She thought so. From a financial point of view, I wonder. If Jessie had been a well-qualified high-flyer and it was a short-term arrangement, maybe. But she was a secretary with no prospects. Her biggest asset was her determination. She worked herself to a frazzle when the nanny was ill, on holiday or needed transport.

Some employers do provide creches where workers can leave their children, but certainly not all. Small firms will never be able to afford such luxuries and the government will never finance them adequately as long as there is male unemployment. In wartime, when every worker is needed, of course, things are different.

Most male employers have no idea how much effort their female staff put into ensuring their children are well taken care of. What is more, they don't care. It is no more their business than whether a female employee locked the door before leaving home. They look on child care as a woman's problem.

All right, you say, we know the problems. Tell us the answers. Sadly, if you decide to have children without capital or high earning capacity of your own, nothing has changed. You are going to stay financially dependent on your husband - or the state - for a very long time. Anyone who tells you differently is deceiving you.

Equally, the dream of a wage for housewives is too expensive ever to be practical. What political party dare introduce it? How many working women, let alone men, would accept the much higher taxes it would demand - simply to pay someone to do in a week what they have to cram into their 'leisure' time? This is a practical book and you need to know the truth.

When Eve was 32, she started work part-time. This is the compromise many women settle for. Unfortunately, part-time work, and work at home for that matter, is normally shabbily paid compared to the wages of full-timers.

Part-time work can also be a blatant con. As a full-time lecturer, I spent twenty-four hours in a classroom a week. My unfortunate - and always female - colleagues taught for thirty hours. Yet they were officially part-time. And they received no pay until after the end of term! This continued, uncertain year after uncertain year, because a part-timer enjoys less job security. If times turn hard, businesses always sack their part-time people first. This is one reason why they employ them in the first place. They can increase or reduce the workforce quickly and cheaply.

Why do so many women fall into this trap? Because there are too many women in the same position. In other words supply and demand which I will explain later on. The college always ran a waiting-list of women keen to lecture part-time.

Things are improving. The Civil Service now allows full-time workers to work part-time and keep their job security and seniority. They are also experimenting with job-sharing. If your skills are in short supply, employers are more willing to help. For example, computer programmers could work at home creating web-sites, choose their own hours and earn high wages. This is another reason to make yourself as well trained as you can before you start a family.

Look back again at Eve's story. Her income only picks up when she can go back to work full-time. She enjoys better job security and better pay and stands a chance of the pay increases which reward promotion. But Eve is 45 and in competition with people of 25. Besides, much of what she knew before is out of date.

There are lots of books on how to return to work, so I will say no more except that there are problems and there are also solutions to them.

WHICH JOBS PAY THE MOST - AND WHERE?

Wages always stay lowest where most of the workforce are women (or, to be cruelly frank, male immigrants) as with shop workers or nurses. This is true regardless of the level of training, if you compare the wages with what others earn who have undergone the same length of training.

A woman may spend three years at university studying French, and one more year actually in France earning peanuts as part of the training. But translators and teachers - mostly female - are poorly paid. The girl studying economics in the next room for three years will fare much better, not only in the salary she earns but in the range of jobs open to her.

Why should this be? For a start, women have in the past either refused to join trade unions that were run by men for men, or worked in areas where it was difficult for unions to organise. (Secretaries, for instance,  are spread over thousands of employers. You can imagine the chore of trying to organise a sudden union meeting.) When they have joined in sufficient numbers to play an active part in running the union, they are often reluctant to take industrial action on pay. A strike involves unpleasantness and loss of wages. It may drag on for months with no guarantee of success. Men usually think extra money alone is worth the risk. Women may be more concerned with safety, conditions at work, the right not to wear uniform or a moral issue - like the Irish shop girls who held out for months because their shop sold South African apples in the days of  Apartheid. Or the Liverpool manageress who was sacked after trying to protect her staff from their randy boss. Perhaps you have seen Glenda Jackson's marvellous performance in the film of the successful strike for her reinstatement.

Most pay increases are based on a percentage of last year's pay. If you miss out one year, you never catch up.

Also, you would be surprised (and men would be amazed, some downright scornful) how many women are frightened of getting a pay increase if it means they earn more than their husband.

'My husband only earns the same as I do now, and he's a chartered accountant,' declared Lucy, blushing. The fact that she herself was a fully qualified and experienced information technologist, and therefore in great demand, cut no ice at all.

Also - let's be honest - many girls and women don't really believe they have to work, whatever they may say in public. Or at most they think they'll have to work only for a few years, especially those in dead-end jobs. Perhaps they don't really expect Prince Charming or a miraculous pools win to whirl them away from the factory and into a paradise of idle luxury. But there is always the chance of release, through pregnancy, family commitments or their husband's job move, perhaps tomorrow. As a result, many consider mundane work a passing chore, as it was for Cinderella, and they don't take it seriously.

Men, on the other hand, know they are stuck with work for life. They take it seriously, and this means they relax. No one but a fool wears himself out in the first few months at a job he knows he will be doing for the next forty years.

The different time scale explains why so many highly thought of men at work appear infuriatingly lazy. It also explains why many female graduates are criticized for being too 'keen'.

The next reason why jobs done mainly by women pay badly is supply and demand. I will mention this again. Broadly, the more people there are willing to supply a service, or to do a certain job, the less employers need to pay to hire them. This is the supply side.

Conversely, the more employers need workers for a job, the more they will have to offer. This is the demand side.

So, from the supply side, women cannot expect to earn much if they can only offer skills which half the population is expected to possess by instinct, like cleaning or looking after children. They face too much competition. This forces the wages down. A man who can only offer his strength, as a labourer, has the same problem.

My young neighbour Dawn tried to build herself a career as a professional baby-sitter. She worked hard, exceptionally long hours, and dashed from one client to another. Everyone marvelled at her Mini. She decked it out with 'Baby on Board' signs, two baby-seats in the back and umpteen mirrors so she could watch over her charges as she drove. Several cuddly animals swung from the roof to entertain the infants. Boxes of wet-wipes and nappies sat ready. She had created a mobile nursery.

If Dawn had only done her sums beforehand, she would have realised that her dream was impossible. She could work around the clock but never earn a living wage. People were very grateful for her care but they would not pay her more than the going rate. Why should they? Common sense said that any schoolgirl could do the job.

The moral is to find an opening with less competition where one's skills are highly valued. If advisers try to channel you into 'traditional' women's work, remember that there is no such thing. Traditionally women, certainly educated ones, didn't work. Take typing. The typewriter was invented in the 1890s, but female typists were not allowed into the City of London until the mid-1920s. The male clerks fought tooth and nail to keep them out.

You cannot expect high wages if you can only offer what most people don't want or value. Mary was a qualified milliner, but who buys an individually made hat nowadays? Mary thought her skill guaranteed a job for life. How many girls leave college even today, thankful that they will never have to study anything again? They could not be more wrong.

Logically, you would expect people with greater skills to earn more. This is not necessarily what happens. Bilingual secretaries often earn less than ordinary ones. Professors may take home less pay than the people who were their students not long before. Why? Supply and demand again.

Clean hands often mean lower wages. The graduate book-seller in the smart shop may take home far less than the car mechanic round the corner. Perhaps the graduate really has the better prospects he or she was promised as compensation. On the other hand, many industries and professions run on the backs of a succession of young hopefuls. (Accountancy and hairdressing for instance.) Always try to find out just how many have been promoted from your job in the past.

Then take working conditions. How many of us would accept the isolation of a prison warder or a submarine crew member? I recently met my first female driver of an articulated lorry. She told me she had trained for eighteen months, found everyone very helpful and did not mind a life on her own on the road and in transport cafes.

In our society, unlike some countries, the filthiest and most dangerous jobs are normally done by men. As long as we are content to let this continue - and it is not used as an excuse to pay men more - 'danger money', 'dirt money and 'overtime' money will always keep the average male wage higher than the average female.

Where you work influences how much you can earn. Everyone knows that wage rates are usually far higher in London and the South-East than in Scotland and Northern Ireland. That is, in prosperous urban areas rather than poor rural ones. So, if you work for an employer, like the government, who pays on a nationwide scale, your wages appear relatively low if you are working in central London or the South-East. They seem reasonable if you live in Birmingham and a downright fortune in Newcastle. Yes, I know they offer a London allowance, but it does not make up the difference.

Why do the wages vary from place to place? Our old friends supply and demand: the more people available and willing to tackle a job, the less they will be paid. Higher house and flat prices, rents and travelling costs reduce the supply of people in London, so employers have to pay them more to overcome this. The more employers in an area who need people, the more they will have to offer them. Most big firms keep their prestige head office in London.

This effect does not stop at Dover or any national frontier. Everyone knows the fantastic tax-free salaries, perks and free accommodation that secretaries and nurses earn in the U.S.A. or the Persian Gulf. They have tempted many women to work abroad, at least for a few years.

Bear in mind also, when you choose a job or a training scheme, that some skills travel and others do not. A good typist can step into a job readily anywhere in the English-speaking world. An English solicitor or lawyer is rarely of any use outside England and Wales, because every country has its own laws, even Scotland.

When I left Britain for New Zealand, all the detailed tax knowledge that clients cheerfully paid a fortune for was suddenly worthless. My teaching qualification provided a job straight away.

Of course, if you just consider pay when you decide which job to choose, you run the risk of spending a vast part of your life doing something you hate. Just remember, it is possible to use the same skills under different conditions for many different employers. You can nurse the sick under the National Health Service, in a private hospital, in uniform in the armed forces, in a factory, in a boarding school, in the Persian Gulf working for an oil company - or even plane-hopping in the Australian outback or in Hollywood on a film set. Not to mention Africa, working for a charity.

The same applies to pounding a typewriter or sitting in front of a computer screen - but not to operating a sewing machine, or smearing synthetic cream over a conveyor belt of Swiss roll in a cake factory.

If you choose to work for an international, male-orientated employer, you too obtain all the perks that other employees have negotiated and insisted on.

There is an old saying : don't marry money, marry where money is. The same applies to choosing a career.

We all know which job really pays a woman the most. Even in our civilised society, the highest-paid women follow the oldest profession. Prostitution is legal, and, in practice, although not in law, earnings usually come tax-free. The amounts earned can be astronomical. This explains the many highly organised criminals and 'protectors' ready to take their cut, using violence where necessary.

I have never had a prostitute ask me for tax advice - she would hardly need it - or for investment advice. Yet she would need the latter desperately with her highly paid, high-risk, uninsurable and short-term career.

WHEN WILL YOU EARN MOST ?

Modelling, advertising, sales, hostessing, anything were looks count and glamour is everything means you will earn most when young. Often by 25 you are a has-been. The same goes for any job where you use your strength or stamina. A man may earn high wages at 20 because he can endure lots of overtime on a building site, or shrug off the round-the-clock pressure of  broking. The same man, worn out at 54 (not to mention 64) will struggle to drag himself through an ordinary day. Of course, then he only manages the basic wage - if the boss has not already managed to get rid of him.

At the other end of the age scale you find the professions. You will earn a pittance for many years but really coin it when you are older, say 40 and above.

It is not so very long ago that people had to pay to be trained, say as a solicitor (lawyer), even through they produced valuable work for years as they trained. Entire industries, from accountancy to hairdressing, still run on the cheap labour of a succession of hopeful apprentices or articled clerks.

Again, this late reward tells against women. Just when the men of the firm are sitting pretty at 40, the women are starting again at the bottom of the ladder, with their children only just off their hands.

WHAT IS AN EMPLOYEE?

An employee is anyone who works under a contract of service. This is simply a written agreement telling you the job, the hours, holidays, pay, etc. It may be just the letter offering you the job. Big employers, like the Civil Service, produce large manuals spelling out in detail exactly what their employees are entitled to.

Basically, the boss tells you what to do and how to do it. Employers provide all you need to do the job. If anything goes wrong, they are responsible. So if you, as a waitress, trip up and pour scalding tea into a customer's lap (as I once did) it is your boss and not you who picks up the dry-cleaning bill.

Employees receive their wages under the PAYE (short for Pay As You Earn) system. Employers must calculate how much income tax  and National Insurance to deduct from each employee's wages. They use a computer package containing tax tables and a tax code given them by the Inland Revenue. Employers also have to pay National Insurance contributions themselves for each of their employees to help pay towards their pensions etc. This may cost them as much as 12.8  per cent of the employee's gross wages.

Employees who are paid straight out of the till, like casual barmaids, and whose employers do not deduct tax, form part of the black economy. Sometimes, the numbers of people and amount of money involved are huge - but not among women.

In a secret survey of  black-economy women in London, many claimed they worked that way to avoid tax. In fact, when they quoted their wages, most earned so little that there would have been no tax or National Insurance to pay. So they were not in the black economy at all. These 'employees' had simply been conned by their 'employers'.

They were cheated out of job security, health-and-safety-at-work protection, perhaps pension contributions and any possible career prospects. Why? Higher-level people are never treated like this; with them, tax-dodging is more sophisticated.

How do you know if you have fallen into this trap? Broadly, you can forget about tax if you are earning less than £4745 a year or £91 a week*. Details on tax and National Insurance change every year. How do you find out? Phone or visit the Inland Revenue. Simply ask what the current figures are. The number is listed in any telephone directory. These people don't bite, and the offices are mostly staffed by women. For National Insurance details ask the telephone operator for National Insurance Freephone. Or again you can pop into the local Department of Work and Pensions office. Easier still, look up the sites on the internet.

www.dwp.gov.uk/

You will find a big difference between the two departments. The Inland Revenue are used to dealing with the wealthy - people who will stand their ground or call on lawyers and accountants to argue for them. The DWP are used to dealing with the needy and the helpless.

The Inland Revenue will not answer questions like, 'If I buy a house and rent it out, how much tax will I pay?' If they did, all their time would be spent helping people to avoid tax.

So much for the job scene in general. You want to know how you can improve your own position, whatever your job. This is the subject of the next chapter.

* These are 2005 figures. I have  tried to avoid quoting figures. I aim for this book to be useful to you in ten years' time.

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