Danish women still a long way from equal pay

A study published in May 2000 confirmed that Danish women are still far from equal pay. The pay gap between women and men on the labour market as a whole is between 12% and 20%, and in the private sector the wages of men are on average 17% higher than those of women. Only a minor part of this pay gap can be attributed to educational and occupational criteria, with the remainder unaccounted for. The Danish Employers' Confederation (DA) and the Minister for Equal Opportunities blame the sex-segregated labour market for the pay gap, while the Confederation of Danish Trade Unions (LO) proposes easier access to data about wages in order to achieve a higher degree of transparency.

Danish women are still a long way from achieving equal pay with their male colleagues. In the private sector, men earn about 17% more than women, while the wage differential is 10% in the public sector. In spite of the fact that Denmark has had an Equal Pay Act since 1973, major differences still exist and it remains difficult to explain why. These are among the findings of a new study carried out by the National Institute for Social Research (Socialforskningsinstituttet, SFI) on behalf of the Ministry of Labour, published on 31 May 2000. The study finds that 12 percentage points of the 17% pay gap in the private sector cannot be explained on the basis of criteria such as education, experience, competences or seniority. The Minister for Equal Opportunities, Jytte Andersen, sees the 12% unexplained pay gap as the result of prejudices and a male culture on the labour market, which have their roots in the old industrial society. "This is quite unacceptable", she says. Ms Andersen was the minister responsible for the drafting of a new Equal Opportunities Act, which was adopted just one week before the publication of the new "report on wage differentials between men and women in Denmark" ("Lønforskelle mellem kvinder og mænd i Danmark", L Pedersen and M Deding, Socialforskningsinstituttet, 2000).

Disagreement over measures to ensure equal pay

The new Equal Opportunities Act is Denmark's most far-reaching legislation on equality between men and women so far. The Act introduces the use of the "mainstreaming" principle as an instrument in work to promote equal opportunities. The mainstreaming principle means that all public authorities are to incorporate the gender aspect in all planning activities and in their administrative activities. However, the most interesting point in the current context is that the Act does not cover equal pay. On this point, there is merely a reference in the new Act to the Equal Pay Act. The new report on equal pay focuses attention on the question of new legislation in the equal pay field. Minister Andersen believes that there is a need for new equal pay legislation making it possible to obtain general data on pay from employers, and not only data required in connection with specific court cases concerning equal pay, as at present. According to the Minister, this question should be covered by the Equal Pay Act and this is why it has not been included in the new Equal Opportunities Act. However, her colleague, Minister of Labour Ove Hygum, has no intention of introducing legislation in this field. Instead, he refers to the Danish tradition of leaving it to the social partners to negotiate an agreement concerning transparency in wages.

The equal pay report

The study from the Institute for Social Research is based on new wage statistics from Statistics Denmark, which include data on pay and working hours for both the private and public sectors. Compared with earlier analyses, these new statistics provide a more precise and more nuanced evaluation of wage differentials between men and women, but so far only data from 1996 are available. However, the Ministry of Labour states in a commentary accompanying the report that it is unlikely that the wage differentials have been significantly reduced over the past four years.

For the labour market as a whole, the wage differential between women and men is calculated to be between 12% and 20%, depending upon how the hourly wage is calculated. The wage differential is smaller if the wage is calculated per working hour performed, than if calculated in relation to the agreed working hours. This is due to the fact that women are more likely to be absent from work than men due to children's sickness, holiday and maternity leave, and that they receive compensation for such absence.

Lower pay, but more flexibility in the public sector

The wage differential as a whole, according to the study, is mainly attributable to the fact that a much larger share of women than of men is employed in the public sector, where the wages are lower. However, women employed in the public sector obtain a higher degree of compensation in connection with absence from work. This seems to indicate that women choose the low-pay public sector, but in return, they obtain a higher degree of flexibility in their working time and thus better opportunities for reconciling work and family life. Women with very young children obtain a significant "wage gain" through compensation for absence. This gain, on the other hand, is the reason for the lower rate of wage increases for women later in their careers.

In the private sector, the wage differential is up to 16%-17% and significantly larger than the 10% found in the public sector. A very major part of this differential is unaccounted for in the report's analysis. Only a minor part is attributable to the fact that women's wages are generally lower on the private labour market due to higher uncertainty about their working time and productivity. According to the analysis, another explanation could be that women, to a higher degree than men, work in low-pay parts of the private sector.

Commentary

The social partners have given the report a positive welcome. In the light of this study, the Confederation of Danish Trade Unions (Landsorganisationen i Danmark, LO) believes that more openness about wage data is required if something serious is do be done about the distorted wage spread between men and women. LO states that initiatives should be taken immediately: "Now the employers have had 25 for years of practising for living up to the Equal Pay Act and I hope that they realise that it now the last call before the legislators lose their patience. It is important that the social partners resume responsibility," said the vice-president of LO, Tine Brøndum. This LO proposal follows the agreement reached between LO and the Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA), in connection with the renewal of collective agreements in spring 2000 (DK0002167F), to carry out a study by March 2002 with the aim of supporting a development in the direction of a higher degree of equality on the labour market - as regards pay, recruitment, education/training and promotion.

DA agrees that the new report is a good supplement to further cooperation with LO on this issue. In a press release about the study, DA stressed that it has a clear interest in breaking down gender-based barriers on the labour market, as regards both career patterns and wages. DA primarily sees the wage gap as the result of a strongly sex-segregated labour market. DA is not quite as keen on more openness about wage data as LO, but does not deny that more transparency might redress some distortions. "But the interests of the employers must also be taken into account. The employer fixes the wage on the basis of the individual person's qualifications and it may lead to unrest at the workplace if the employees start to discuss their wages among themselves", stated DA's recruitment manager, Anne Katrine Schön. (Carsten Jørgensen, FAOS)

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