New evidence on gender wage gap and low pay

In March 2004, the Federal Statistical Office reported that in 2003 the average monthly income of women in Germany was 30% below that of men - the same gap as found in 2002. Also in March, the Institute of Economic and Social Research (WSI) issued a study which revealed that low pay is particularly widespread in private sector services with high proportions of female employees.

On 3 March 2004, the Federal Statistical Office (Statistisches Bundesamt, Destatis) published the results of its 2003 comparison of the incomes of men and women, which reveals that there is still a considerable inequality in pay levels between men and women (DE0211201N).

Gender pay gap

The Destatis study finds that the average income of women in 2003 was 30% below the average income of men - the same gap as found in 2002. In 2003, women in full-time employment earned on average EUR 2,602 a month. Female blue-collar workers in the processing industries had an average monthly income of EUR 1,885, which was 26% less than men (EUR 2,549). In eastern Germany the gender pay gap was less marked than in western Germany - see table 1 below.

Table 1. Average monthly income in the production industries, distributive trade and credit/ insurance, by category and sex, 2003*
Year Blue-collar White-collar
Men's income Women's income Gap between women's income and men's Men's income Women's income Gap between women's income and men's
EUR % EUR %
Germany
2000 2,406 1,777 26.1 3,393 2,378 29.9
2001 2,443 1,803 26.2 3,493 2,461 29.5
2002 2,484 1,837 26.0 3,589 2,517 29.9
2003 2,549 1,885 26.0 3,693 2,602 29.5
Western Germany
2000 2,499 1,842 26.3 3,448 2,428 29.6
2001 2,530 1,868 26.2 3,547 2,510 29.2
2002 2,568 1,903 25.9 3,665 2,582 29.5
2003 2,634 1,956 25.7 3,767 2,667 29.2
Eastern Germany
2000 1,822 1,411 22.6 2,668 2,006 24.8
2001 1,863 1,439 22.8 2,758 2,074 24.8
2002 1,902 1,481 22.1 2,718 2,095 22.9
2003 1,946 1,515 22.1 2,823 2,176 22.9

* Blue collar workers only in production industries (ie mining and quarrying, manufacturing, energy supply and construction).

Source: Destatis.

According to Destatis, a major reason for these differences in average earnings is that women are less frequently employed in the upper job categories. Whereas 40% of male white-collar employees are found in job category II (the second-highest statistical job category within a scale of five - jobs in category I require the highest skills and involve the highest job responsibilities whereas jobs in category V require very few skills), only 15% of female white-collar employees are in this job category. Some 60% of male blue-collar workers are employed as skilled workers, compared with only 13% of female blue-collar workers.

Women and low pay

In March 2004, the Collective Bargaining Archive (Tarifarchiv) of the Institute of Economic and Social Research (Wirtschafts- und Sozialwissenschaftliches Institut, WSI) in the Hans Böckler Foundation (Hans Böckler Stiftung) issued data on low pay in Germany. Table 2 below gives the collectively agreed pay rates for selected low-pay jobs and sectors in western Germany.

Table 2. Collectively agreed wages in selected low-pay sectors and job categories, western Germany, 31 December 2003
Job category Bargaining sector Basic monthly income in EUR Hourly wage in EUR
Labourer Agriculture, Rhineland-Nassau 814 4.68
Home help (first year) Private households, North-Rhine Westphalia 944 5.65
Hotel porter, page Hotels and catering, Saarlan 1,030 5.95
Salesperson (unskilled, first year) Bakeries, Saarland 1,035 5.98
Florist (third year) Florist trade, western Germany except Schleswig-Holstein 1,294 7.66
Fish-packer Fisheries and poultry, Cuxhaven 1,269 7.69
Hairdresser ('first hand') Hairdressing sector, Palatinate 1,312 8.19
Salesperson (second year) Retail, Lower Saxony 1,376 8.44
Cleaner Building cleaning sector, North-Rhine-Westphalia 1,380 8.17
Film projectionist Cinemas, western Germany 1,380 8.17
Clerk (first year) Paper processing industry, Rhineland-Palatinate and Saar 1,495 9.84
Sewing operative Clothing industry, Bavaria 1,510 9.44
Steelworker (without working experience) Steel industry, North-Rhine Westphalia 1,585 10.43

Source: Collective Bargaining Archive, WSI,

Table 3 below gives the collectively agreed pay rates for selected low-pay jobs and sectors in eastern Germany.

Table 3. Collectively agreed wages in selected low-pay sectors and job categories, eastern Germany, 31 December 2003
Job category Bargaining sector Basic monthly income in EUR Hourly wage in EUR
Salesperson (unskilled, first year) Bakeries and pastry shops, Brandenburg 863 4.98
Porter Hotels and catering, Mecklenburg- Western Pomerania 887 5.12
Hairdresser (responsible for up to 10 employees) Saxony 895 5.59
Labourer (not seasonal workers) Agriculture, Saxony 908 5.22
Florist (third year) Florist trades, Saxony-Anhalt 948 5.33
Salesperson (unskilled, first year) Bakeries, Saxony 961 5.52
Cleaner Saxony-Anhalt 978 5.79
Home help (without working experience) Private households, Saxony-Anhalt, Thuringia, Saxony 1,103 6.60
Salesperson (first year) Retail, Mecklenburg-Western Pomerania 1,397 8.27
Film projectionist Cinemas, eastern Germany 1,380 8.17
Steelworker (without working experience) Eastern German steel industry 1,585 9.61
Clerk (first year) Paper processing industry, Saxony, Saxony-Anhalt, Thuringia 1,605 10.03

Source: Collective Bargaining Archive, WSI.

Given the general wage differences between western and eastern Germany it is no surprise that low pay is particularly marked in eastern Germany. According to the WSI figures, a hairdresser responsible for up to 10 employees in Saxony (eastern Germany) receives an hourly wage of EUR 5.59 whereas a 'first hand' in the hairdressers' trade in Rhineland-Palatinate (western Germany) has a wage of EUR 8.19. A cleaner in North-Rhine Westphalia (western Germany) has a collectively agreed wage of EUR 8.17 but in the eastern German state of Saxony-Anhalt the rate is only EUR 5.79.

The wages of workers who are not covered by collective agreements are likely to be even lower. In 2002, overall collective bargaining coverage was 70% in western Germany and 55% in eastern Germany. In many private sector services, bargaining coverage is considerably lower.

With regard to women's wages, the WSI data reveal that low pay is particularly widespread where the work is characterised by high proportions of female employees - ie private sector services. This is in line with results of a study by the WSI on low pay in western Germany, which was published in 2003. This study found that in 1997 about 70% of employees with so-called poverty wages, defined as earnings of less than 50% of average earnings, were women.

Commentary

The data published by the Federal Statistical Office and WSI highlight the gender pay gap in Germany. Women are still much less likely than men to be employed in better-paid jobs, and more often work in the low-pay sectors of the economy. This may be due partly to different 'working life biographies', reflecting the difficulties experienced by many women when attempting to balance employment and family, but staffing policies and wage discrimination are also of importance - as was noted in a study recently carried out by the social research institute Sozialforschungsstelle Dortmund (sfs). Furthermore, the principle of equal pay is still not implemented everywhere. The new evidence underlines the necessity for bargaining parties and the legislator to continue to tackle the problem. (Heiner Dribbusch, Institute for Economic and Social Research, WSI)

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