Gender-related pay differentials examined

Source: Statistik Österreich.

The data set out in tables 2-4 also underscore the fact that gender-specific pay inequalities are much more profound in the private sector than in the public sector.

Possible determinants of gender-specific pay inequality

There is good reason to believe that the observed inequality in pay ensues not from one factor but from several, which may also interact to some extent. Qualifications, however, can be ruled out as a significant factor. It is evident from the above data that pay inequalities within distinct qualification levels are generally not lower than inequalities across these levels. A recent study carried out on behalf of the Ministry of Economic Affairs and Labour (Bundesministerium für Wirtschaft und Arbeit, BMWA), examines developments from 1993 to 1997 and gives an insight into the causes of gender-specific pay differentials ("Einkommen von Frauen und Männern in unselbständiger Beschäftigung", P Gregoritsch, M Kalmar and M Wagner-Pinter, BMWA, 2000). One essential factor identified in the study is working time in the broad sense of both the length of the working week and the continuity of working life over longer time periods.

As regards the length of weekly working time, the fact that far more women than men are part-time employees significantly contributes to the pay differentials outlined above. In 1996, 29% of women employees worked part time, compared with 4% for men. Pay differentials resulting from this employment pattern are not a matter of unequal treatment. However, the Ministry's study indicates that even men and women under the same working time regime are paid differently. In 1996, the income of female full-time employees was 22% lower than that of their male colleagues. In the case of part-time work, the corresponding gap to the disadvantage of women was 15%. Another factor related to the working week is that male employees work more overtime than female employees. Given overtime pay premia, this is responsible for about five percentage points of the gender-specific wage differential.

As far as long-term continuity of working life is concerned, gender-specific differences in terms of taking leave for family reasons are of utmost importance. Women who had not taken such leave earned 20% more in 1997 than they had in 1993, while women who had taken such leave earned 9% less in 1997 than in 1993. This loss of income was mainly due to the fact that many of the women concerned moved to part-time employment after leave. In a longer-term perspective, family-related leave also reduces the opportunities for career advancement, which in turn affects remuneration negatively. Finally, gender differences in pay emerge as early as an employee's first appointment after leaving the education system. On average, men start with a gross wage which is 18% higher than that of women belonging to the same occupational group.

The role of industrial relations in pay inequality

Two properties of the Austrian industrial relations system are likely to contribute to gender-related pay inequality. The first relates to the fact that pay differentials are generally wide, not only according to gender but also in terms of sectors and employee status. Pay differentials between various sectors in Austria are among the largest in the Organisation for Economic Cooperation and Development (OECD). Pay differences between employees with different statuses are also substantial. Manual workers in Austrian industry earn almost 40% less than white-collar workers (as against 30% in Germany). This indicates the irrelevance of solidaristic goals for wage setting, something which probably also affects the gender issue. The unions have traditionally understood solidarity as a device for maintaining a maximum level of employment. In this respect, they have been highly successful by international standards. In comparison with this goal, egalitarian bargaining goals have clearly receded into the background.

While this mode of wage formation and the underlying bargaining priorities are specific to Austria, the other industrial relations factor can be found in most European states: the lower unionisation rate of women, compared with men (TN0103201U). At the end of 1999, the share of women in total Austrian union membership was 32%. This has not significantly changed for decades, with the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) having recorded 30% female membership in 1980. As a consequence of the expansion of female employment that has occurred since then, the union density of female employees has tended to decline. In 1999, the gross union density for women was 35%, compared with 57% for men. These differences between the sexes are even larger in terms of representation on union bodies and works councils, although no figures are available on this topic (AT0003215F). It goes without saying that this low female participation in labour representation translates into policies.

The under-representation of women on works councils is especially relevant to unequal treatment, since this inequality occurs below the formal regulatory level of labour law and collective agreements, in the course of everyday practices in the company. This is underscored by the abovementioned fact that women earn less than men, beginning with the very first appointment after completing their education. This appears to be a specific case of a more general pattern. As far as gender-specific pay differences are a matter of unequal treatment, this mainly results from classifying a female employee lower in a company's grading system than a man with equal qualifications. This is possible because classifications of jobs and pay grades are always somewhat arbitrary. The gender-related problems of grading can hardly be overcome without female representatives on the works council .

Commentary

A multiplicity of factors account for gender-related pay differentials in Austria. On the one hand, these differentials reflect gender-specific employment structures (eg the relative frequency of part-time work and the concentration of female employment in low-pay sectors). Furthermore, the differences echo gender-specific properties of overall working lives and careers. Finally, there are also informal practices which are at odds with the principles of equal treatment. These practices indicate the limits to the "governance capacity" of the statutory provisions for equal treatment. The effectiveness of these provisions depends on shopfloor-based mechanisms aimed at monitoring and controlling labour management practices within the company. Since one main tasks of works councils is monitoring the employer's observance of the established labour standards, the 1999 amendment of the Labour Constitution Act that explicitly integrates the works council into positive action for women is certainly an important means of advancing equal treatment in the future. However, this amendment, like any other formal rule, needs implementation by active involvement. Hence, the extent to which women will actually benefit from the amendment is contingent on whether in the future they engage and participate in works councils more than they have in the past. (Franz Traxler, University of Vienna)