Reducing the gender wage gap in Europe – how to tackle the task ?

Women in Europe currently earn on average 17.5% less than men. Even though there is an increasing political will to reduce the gender wage gap, initiatives often do not have much impact, as the real reasons for the persisiting gender wage gap tend to be misidentified.

At EU level, the gender pay gap is defined as the relative difference in the average gross hourly earnings of women and men within the economy as a whole. Even though there exists a significant gender pay gap in every European country, there are considerable differences between the Member States in this regard, with the pay gap ranging from less than 10% in Italy, Malta, Poland, Slovenia and Belgium to more than 20% in Slovakia, the Netherlands, Czech Republic, Cyprus, Germany, United Kingdom and Greece and more than 25% in Estonia and Austria.

Source: Data: Eurostat (2008) except for EE (2007); Image: European Commission

The gender pay gap differs widely between France and Germany, which are the both European countries with the most socioeconomic similarities. In Germany, women earn on average 23.2% less than men, whereas in France, women earn “only” 17.1% less than men. In addition, salary gaps have been rising continuously in Germany for more than a decade, while wage gaps have been almost constant in France since 2000 and even sank in the early 2000s. The increase in the gender wage gap in Germany has been especially pronounced in recent years, as the low pay sector has been largely expanded  since 2000 and especially during the recent economic crisis. In France, on the other hand, the legally binding minimum wage helps prevent such a development. The fact that less women in France are in precarious employment and more women are employed full time further reduces the gender wage gap as compared to Germany to a significant extent.

The European Commission cites several causes for the persisting gender wage gap in European countries: The most frequently cited reason is labour market segregation: women tend to work more in sectors and statuses that are not very well paid. Many girls still limit their career choices to a narrow range of jobs  despite their superior academic performance (horizontal segregation). A high proportion of women  is employed in the social services sector, with the majority employed in the lower income segment (for example as elementary school teacher, nurse, social worker, cleaning lady, saleswoman, child care provider), which leads to the fact that women are significantly under-represented in the industry sectors. The job groups in which women are overrepresented usually offer worse career opportunities and lower pay in comparison to male-dominated jobs. Female-dominated jobs are also paid less simply because of their lower social status as “women’s jobs”. Typically masculine job categories, on the other hand, such as engineering and finance, are usually very well paid. At the same time, men and women are employed on different hierarchy levels (vertical segregation). Women tend to get promoted less frequently and find it more difficult to attain management positions. Thus, across all sectors, women are less present in supervisory boards.

However, only a small proportion of the gender wage gap is attributable to differences in productivity between men and women, which result from differences in training, choice of the sector, choice of working hours or limited flexibility caused by family commitments. Career paths of qualified women are blocked by informal and often invisible barriers – this phenomenon is known as the ‘glass ceiling’. The glass ceiling limits women’s access to networks and information within companies. Furthermore, there is evidence that male bosses tend to favour and promote male employees rather than female employees in many companies. Women’s careers often come to a halt when they reach middle management. It is mainly women themselves who come to suffer from this. The wage inequality has an impact throughout women’s lives and especially when they retire as lower salaries lead to lower pensions and a higher risk of poverty in older age.  However, there is rising awareness  that company’s executive management stands to lose or never attains important competencies held by women stuck in middle management.

Since recently, one can observe an increasing political will to reduce the gender wage gap allover Europe.  “Equal pay” initiatives and laws often call for paying women and men the same wage when both do the same job. However, this “direct” wage discimination only accounts for a small part of the gender wage gap. The main main reason why women earn less than men is not because they earn less for doing the same job, but because they do NOT do the same job! Women are underrepresented in the industry sector and in management positions and therefore do not have the same career and wage options than men.

Fighting against the gender wage gap therefore primarily implies enlarging career perspectives for women and encouraging girls and women to take on typically “male” jobs while putting typically “female” soft skills (empathy, social competence, conflict management) into use. At the same time, boys and men should be encouraged to do typical female jobs, especially in social services. This requires gender-conscious school pedagogy to encourage children to choose gender-atypical careers and to break up gender stereotypes.

To further boost women’s career development, there should be mechanisms to help women make the transition from marginal work arrangements to a regular full-time job. Publicly funded initiatives for qualifications and continuing education may be a good start. The introduction of a legally binding minimum wage would also represent an important step towards financial independence and social security for women employed in the low pay sector. In order to advance gender equality in the business world, a female quota for executive and supervisory boards of large companies would be appropriate. Gender mainstreaming and women’s advancement programmes should contain clear goal definitions, responsibilities and binding sanction mechanisms both in the private and the public sector.

Sources: Blog author’s own contribution; FES Report Angela Luci; European Commission

Related article on this blog:  Why French women suceed better in balancing work and family life than German women.

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