Big pay gap remains between men and women

A December 1997 report from Eurostat shows a persistent discrepancy between the pay of men and women. The report, which covers four Member States, shows the highest pay differentials to be in the UK, followed by France, Spain and Sweden. The greatest pay inequalities are found in the higher income groups, the older age groups and among the most highly educated. Here, we present the report's findings, the European policy context on equal pay and equal opportunity, and an analysis of the reasons for pay differentials between men and women.

A report published by the Statistical Office of the European Communities (Eurostat) on 9 December 1997 shows that, despite the adoption of equal pay legislation at European level more than 20 years ago, a large pay gap remains between men and women. The report (, Eurostat statistics in focus, Population and social conditions, 15/97), summarises the findings of a survey on pay in four Member States and gives the hourly earnings of women as a percentage of those of men as 84% in Sweden, 73% in France and Spain and just over 64% in the UK. The study includes data on both full- and part-time workers, but excludes overtime payments (which means that in certain occupations, pay gaps are likely to be underestimated as women are less likely than men to work overtime).

All things being unequal - the persistence of pay differentials between men and women

The principle of equal pay for work of equal value was enshrined in the founding Treaty of the European Communities in 1958. Article 119 of the Treaty requires Member States to "ensure and subsequently maintain the application of the principle that men and women should receive equal pay for equal work". Furthermore, in 1975 and 1976 respectively, the Directives on the application of the principle of equal pay for men and women (75/117/EEC) and on the implementation of the principle of equal treatment (76/207/EEC) were adopted. The former defines the principle of equal pay as meaning "for the same work or work to which equal value is attributed, the elimination of all discrimination on grounds of sex with regards to all aspects of remuneration". The equal treatment Directive aims to prohibit discrimination on grounds of sex with regard to access to employment, promotion, vocational training and working conditions.

Despite these provisions, pay differentials have remained in evidence in all Member States, as Eurostat data from 1991 (quoted in "Pay discrimination between men and women, 'all things being unequal'", Rachel Silvera, ETUI, Transfer, Volume 2 Number 1 (1996)) shows.

Table 1: Share of women's pay (in % of men's pay) in the countries of the European Union, 1991
. Manual workers (hourly) Mon-manual workers (monthly)
Belgium 75.6 65.2
Denmark 84.5 n/d
France 80.3 67.2
Germany 73.4 67.1
Greece 79.2 68.5
Ireland 69.5 n/d
Italy 79.3 n/d
Luxembourg 67.9 55.2
Netherlands 76.1 64.8
Portugal 70.8 70.7
Spain 72.2 60.9
UK 67.1 58.3

Source: Eurostat, 1992

When looking at the issue of pay inequalities, two different forms have to be distinguished: direct and indirect discrimination. While there is evidence pointing to persistent discrimination between men and women occupying the same positions (see below), it has been argued that an even more significant cause of pay differentials is the high incidence of job segregation in the labour market. Women tend to be concentrated in low-skilled, low-paid jobs, which makes claims of "equal pay for equal work", or "equal pay for work of equal value" more difficult to prove and pursue. Few workplaces have access to job evaluation studies which would assist with such claims. Furthermore, Silvera (cited above) has argued that even where such job evaluation studies exist, their criteria often serve to embed existing (or new) forms of discrimination. More often than not, they are drawn up without the participation of women.

In addition, equal pay claims tend to be difficult to prove, the process is time-consuming and laborious and remedies can be unsatisfactory (compensation rather than reinstatement). In some countries, the curtailment of funding for legal aid or assistance has reduced the ability to bring such cases to adjudication.

Another factor which contributes to pay inequality between men and women is the fact that women are more likely to work part-time than men. According to a report published by Eurostat in September 1997, 32% of female employees in the EU worked part-time, compared with only 5% of men. The recent Eurostat report confirms that part-time workers earn much less than full-time workers, even on an hourly basis - 85% of the full-time average in Sweden, 71% in France, 69% in Spain and 60% in the UK. Most part-timers are in low-paid jobs and most of them are women - 67% in Spain, 68% in France, 69% in Sweden and 81% in the UK.

While the new Eurostat report supports the finding that the concentration of women in low-skilled, poorly-paid jobs is contributing to the persistence of wage differentials, it also shows that although women's earnings come closer to men's when they are recalculated to remove such structural differences, "there still remains an hourly earnings difference between a man and a woman with comparable educational background, in the same occupation and industry, of 13% in Sweden, 22% in Spain, 23% in France and almost 25% in the UK." Table 2 below sets out the findings in more detail.

Table 2: Hourly earnings of women as a % of those of men (full and part-time workers, excluding bonuses and overtime), 1995 (France 1994)
OCCUPATION Spain France Sweden UK
Managers 69.7 70.2 80.1 65.8
Professionals 77.4 78.9 87.7 82.9
Technicians etc 82.7 86.1 84.6 68.9
Clerks 76.4 92.6 95.5 89.8
Service and sales 79.1 70.5 96.2 80.7
Craft and related trades 70.6 67.0 88.7 61.3
Plant and machine operators 73.5 76.3 92.0 74.5
Basic jobs 83.9 76.2 87.4 73.6
AGE . . . .
Less than 20 years 92.9 98.0 90.7 91.0
20-24 86.6 94.1 94.5 82.6
25-29 86.5 88.4 88.4 79.7
30-44 77.8 77.1 86.1 63.1
45-54 74.4 69.3 79.8 53.6
55 and over 70.6 64.5 77.4 58.1
EDUCATION . . . .
Less than upper secondary 73.8 73.8 87.3 70.9
Upper secondary 74.2 78.7 82.1 70.8
University etc 64.9 66.5 80.4 68.4
. . . . .
TOTAL 72.7 72.9 84.0 64.4
After discounting main structural effects (occupation, economic activity, education) 78.2 76.6 86.8 75.4

Source: Eurostat, 1997

Significantly, the Eurostat report found greater pay differentials between men and women in managerial positions, than between men and women in lower-paid manual jobs. Women with higher qualifications were thus found to fall further behind their male counterparts. Equally, wage differentials were greater in the case of older women, thus lending support to the argument that pay differentials increase throughout their professional career because of difficulties with reconciling work and family life.

The European policy context

The provision of equal opportunities for men and women has been at the forefront of EU social policy since its inception (as evinced by Article 119 of the Treaty of Rome), and has since expanded beyond the concept of direct discrimination to cover issues such as indirect discrimination, positive action, sexual harassment and policies to assist the reconciliation of work and family life. The importance of the role of the social partners in helping to achieve equal opportunities is increasingly being realised, not only because of their role as a partner in policy-making, but also because of the importance of collective bargaining in setting standards for pay and working conditions.

Article 6a of the new Amsterdam Treaty (EU9707135F) affirms the principle of non-discrimination and gives the Council the power to take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation. Article 2 of the Treaty adds the goal of achieving equality between men and women to the general principles to be promoted by the Community. In addition, the principle of "mainstreaming" - ie the inclusion of considerations of gender equality into all the policy objectives of the Community - is included in a new Article 3 of the Treaty.

More recently, the Presidency conclusions of the recent European Council Employment Summit held on 20-21 November 1997 (EU9711168F) emphasised the need to support the increased employment of women and the need to reverse the under representation of women in certain economic sectors and occupations and their over-representation in others, and to encourage Member States to take appropriate actions. The conclusions go further to argue that "policies on career breaks, parental leave and part-time work are of particular importance to women and men ... there must be an adequate provision of good quality care for children and other dependants in order to support women's and men's entry and continued participation in the labour market." It calls upon Member States to strive to raise levels of care provision where some needs are not met.

In 1996, the Commission adopted a Code of practice on the implementation of equal pay for work of equal value for women and men, and a Directive was adopted in December 1997 which reverses the burden of proof in cases of alleged sex discrimination (EU9712175N). The onus of showing that there has been no discrimination now falls on the employer.

The Commission has also launched a study within the framework of the sectoral social dialogue which aims to assess the inequalities which arise between men and women throughout their working career, as a result of the need to reconcile work and family life, as well as outline any good practice in this area. The findings of this study will be reported in early February 1998.

Commentary

The findings of this recent Eurostat survey are significant, not only because they show the persistence of the pay gap between men and women, but also because they highlight the fact that, rather than experiencing lower pay differentials, more highly educated and skilled women are indeed faced with greater pay inequality than their lower-skilled female counterparts.

While job segregation is clearly one of the main causes of pay inequalities, the results of the survey show that even when such structural differences are taken into account, pay differentials remain. The fact that older women are more affected could reflect the fact that younger women are increasingly obtaining higher qualifications, but can also be attributed to the impact of motherhood on women's earning potential.

Despite entering the labour market in ever greater numbers, women have retained "all the encumbrances of their traditional domestic and reproductive roles" ("Equal opportunities and collective bargaining, phase two synthesis report", Yota Kravaritou, European Foundation for the Improvement of Living and Working conditions, Dublin (1997)). Research indicates that men spend significantly less time than women on domestic chores. Indeed, data indicate that with the birth of a child, men's working hours tend to increase, while women tend to reduce significantly their involvement in paid employment, thus reducing their earning potential.

State, employers and trade unions have historically supported the ideology of the male breadwinner earning a family wage. Women's employment was often considered merely to provide "pin-money". Collective redundancies often affected (and continue to affect) women more because it is assumed that the woman's wage is not really necessary. While changing family structures and rising male unemployment are rendering this assumption less and less valid, its vestiges are still visible in many collective bargaining processes and wage structures. Women continue to be underrepresented in collective bargaining and on the decision-making bodies of the social partner organisations (TN9704201S)

As mentioned above, the inferior valuation of traditional "women's jobs" is often a result of the fact that they are perceived to replicate their domestic (unpaid) tasks, such as caring, cleaning, cooking etc. They are therefore not seen to require any additional skills/training, nor are their existing skills perceived as valuable marketable commodities. A revaluation of such tasks (through the process of collective bargaining) is therefore required. At the same time, it has to be ensured that women and men are encouraged, and have the opportunity, to enter non-traditional occupations. It has been argued that this requires changes in socialisation processes from an early age.

State intervention, for example in the form of parental leave, childcare provisions and policy on career breaks also has an important role to play in the improvement of the situation of women in the labour market. (Tina Weber, ECOTEC Research and Consulting Ltd)

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