Addressing the gender pay gap: Government and social partner actions
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Summary
In Europe, the gender pay gap stands at about 17.6% (Eurostat, 2007), which means that the hourly pay of women is on average almost a fifth below the level of men. However, this figure does not take into account differences such as the number of hours worked or the types of employment contract. Part of the gender pay gap can be attributed to a range of factors that help to reinforce the differences that persist between male and female employment, including the fact that women tend to engage more often in part-time work, take more and longer career breaks which reduce job tenure and work experience, work in lower-paid industries or work in low-paid sectors with less collective representation and bargaining power.
The issue of pay equality between men and women has been on the European political agenda for a long time. As part of the 2003 European Employment Strategy, the employment guidelines for that year stated the objective ‘to achieve by 2010 a substantial reduction in the gender pay gap in each Member State’. The guidelines propose a multi-faceted approach to tackling the underlying factors of the gender pay gap, including addressing the areas of sectoral and occupational segregation, education and training, as well job classifications and pay systems. The European Commission further issued communications on A roadmap for equality between women and men 2006–2010 and on Tackling the pay gap between women and men.
The 2008 employment guidelines of the Council of European Union underline the need for ‘resolute action to increase female participation and reduce gender gaps in employment, unemployment and pay’ among the Member States. In addition, the European Parliament has adopted a resolution (2008/2012(INI)) drawing the attention of the Commission to a set of integrated initiatives to tackle the gender pay gap. In a further resolution of 10 February 2010, MEPs were critical of the fact that economic recovery projects mainly focus on male-dominated employment.
Key findings
This report draws on a wealth of quantitative studies which calculate adjusted gender pay gaps based on income statistics. The report also draws on qualitative research on segregation in the labour market, female career development and gender roles in the professional and private spheres. A mapping of national research studies on the adjusted gender pay gap finds that it ranges between 4% in Denmark and 30% in Cyprus. The ‘discriminatory component’ – which cannot be attributed to observed characteristics – is found to explain the biggest part of the unadjusted gender pay gap in Cyprus, Italy and Portugal.
Interpreting the adjusted gap as being the only discriminatory component, however, falls short of the reality. In fact, many studies find that individual characteristics, such as the level of education, tend to explain less and less of the observed gap, particularly in a context where the level of female education has been increasing. Rather, the major reasons for this gap are very often related to both horizontal and vertical segregation – or the fact that women tend to choose lower-paid professions, reach a ‘glass ceiling’ in their careers, or have their jobs valued less favourably. The origins of these factors could be judged as being discriminatory in themselves – that is, when they are rooted in gender stereotypes of male and female occupations.
Looking at these social processes opens the field for addressing the role of the social partners. Empirical findings show that their influence has the potential to substantially narrow the gender pay gap – for instance, through centralised collective bargaining or the establishment of and increase in minimum wages.
A German adjustment study finds that five percentage points of the gap can be explained when estimates include information on the existence of a works council in the company. In Ireland, centralised wage bargaining and the implementation of a national wage agreement have benefited women engaged in both full-time and part-time work, while high trade union membership among men is correlated with a higher pay gap. This segregation of representation is also reported in Hungary and Spain.
Research has further shown that gendered roles in childcare explain additional parts of the gap. An Estonian study finds that for each child, a woman’s earning power is reduced by 3.6%, whereas men are not affected. In Norway, having children explains up to 36% of the gender pay gap. The length of career breaks is crucial however: in Germany, it has been found that the gender pay gap falls to just 6% for women who return to work from parental leave within 12 months and who work full time; on the other hand, this gap rises to 12% for single women working full time and to 14% for women who return from parental leave after three or more years.
The second part of this report looked at initiatives and activities developed by governments (both as legislators and as employers in the public sector) and the social partners to address the gender pay gap. Governments have introduced some initiatives which directly tackle the pay gap, such as: specific legislation, as seen in the cases of Italy or Luxembourg; monitoring bodies, as shown in the case of the Danish Pay Commission; or legislative support for collective bargaining, as seen in France, where the Génisson law supports social partner plans for abolishing the gender pay gap by 2010. However, most of other initiatives reported are of an indirect nature and embrace gender equality in general. Already, ahead of implementing the revised EU directive on parental leave (EU0907029I), many countries have adopted specific legislation on supporting the equal sharing of childcare responsibilities through addressing the role of fathers; other countries have tried to increase and support female labour market participation after maternity leave – as seen in the case of Austria, where free kindergarten services have been introduced to this end.
The trade unions and employer organisations have also developed a significant number of activities to tackle the issue of pay inequality and gender segregation. Monitoring the pay gap and raising awareness – both among members and affiliates as well as among the wider public – is one of the main themes reported. In terms of addressing the issue of pay equality in collective bargaining, the social partners’ role in narrowing the pay gap cannot be emphasised enough. Along with joint statements and agreements on equal pay, the revision of job classification schemes has been an issue in a number of countries in addressing possible discrimination through occupational classification – as seen in the cases of Belgium, Lithuania, the Netherlands and the UK. In Lithuania, a Model Collective Agreement is used as a basis for drawing up collective agreements in enterprises and organisations. Moreover, the national social partners have recommended the introduction of a gender-neutral, common Methodology for the Assessment of Jobs and Positions (LT0507102N).
In the Nordic countries in particular, the social partners have agreed on initiatives to tackle pay in sectors with a higher gender pay gap. In Sweden, for instance, a ‘gender equality pool’ provides low-paid employees with extra remuneration through employer contributions. The wage pools were collected according to a central agreement, but distribution took place through local bargaining to workplaces with a higher gender pay gap.
Policy pointers
After mapping the initiatives by governments and social partners, a number of points can be highlighted. Firstly, overcoming ‘segregation in representation’ should be a major concern for the social partners. The lower trade union presence in female-dominated and low-paid sectors should give the impetus for different strategies in recruitment, or specially tailored membership packages for women.
The comparison in this report shows that equal pay seems to be more of an issue for the trade unions, whereas employers and their organisations tend to devote comparatively less attention to the matter. However, management can play an important role not only with regard to pay equity, but also in terms of creating a climate to support the equal sharing of care responsibilities and career advancement for both male and female workers.
An issue worth discussing among the national and intersectoral social partners is empowering the sectoral social partners to put equal pay issues on the agenda not only within their own sectors, but also to opt for an intersectoral balance. An example would be an offsetting fund between companies – as seen in the case of the Swedish ‘pool of gender equality’ (Jämställdhetspotten) or the Norwegian state-financed wage pot to compensate low-paid occupations in the public sector – which the social partners still have to agree on.
Where bargaining is centralised, gender differences in pay appear to be lower. Thus, the social partners in countries operating within other contexts of collective bargaining – such as those with a predominance of company-level bargaining – could ‘simulate’ some of the advantages of centralised bargaining, by providing common guidelines for gender-sensitive collective bargaining to their respective members at the workplace level.
Finally, the issue of horizontal segregation remains crucial. Only a few initiatives have been reported that explicitly target female choice of profession, sector and career. Raising awareness of this issue among people from an early age, and promoting professions and sectors to young women and men in a gender neutral way, could help to address the root of this problem.
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