Lack of agreement on proposals to minimise gender pay gap

At the end of January 2007, a conference took place to discuss the draft recommendations of a committee established to devise policy recommendations on how to reduce the wage gap between men and women. The committee, in which the employers and trade unions are strongly represented, was originally established by the Minister of Social Affairs at the start of 2006. However, the committee has failed to reach overall agreement on its draft recommendations. For example, a recommendation to increase wages in the healthcare and education sectors was abandoned because the employers considered that the measure did not contribute to resolving the issue of wage discrimination.

Problem of gender pay gap

The problem of unequal pay for men and women is particularly persistent in the Netherlands. Over the years, the Labour Inspectorate (Arbeidsinspectie) has conducted research into this matter, repeatedly showing that women earn around 20% less than men on average. Approximately 7% of this figure cannot be explained on the basis of women holding less senior positions and choosing to practise different professions. The wage gap also exists among non-Dutch nationals. The figures for wage discrimination place the Netherlands in fourth position among the 15 EU Member States (pre-May 2004). Of these countries, only Germany, the UK and Finland report higher wage disparities between the sexes.

For this reason, at the start of 2006, the Minister of Social Affairs and Employment, Aart-Jan de Geus, established a committee to formulate policy recommendations aimed at addressing the pay gap. The committee consists of both employer and employee representatives, as well as experts from the Equal Treatment Commission (Commissie Gelijke Behandeling, CGB). The committee’s draft recommendations were discussed during a conference at the end of January 2007. However, in the course of this conference, it became clear that opinions still differed within the committee with respect to the recommendations proposed. For example, the recommendation to increase wages in the healthcare and education sector was not adopted because the employers believed that it would not help to resolve the issue of wage discrimination.

Influence of sector and working time

Among the main causes underlying wage differences between men and women is the fact that women often choose to work in sectors where wages are not that high and in which opportunities for promotion are limited, such as in the healthcare and education sectors. The employer representatives, however, are opposed to the recommendation to increase wages in these sectors. In their opinion, women themselves choose to work in such sectors, where it is clear from the start that wages are lower. Within this context, the situation bears no relation to wage discrimination. As a result, the recommendation was abandoned.

The fact that female employees often work part time does little to resolve the gender pay gap either. The present tax system, with income-based tax deductions for employees, is particularly disadvantageous for small-scale, part-time workers wanting to work longer hours, as they are not eligible for such deductions. On wages amounting to between a minimum and an average income, the employee is only left with €30 of every €100 extra earned. The chair of the conference explained how wage discrimination is thus far more prevalent in relation to small-scale, part-time jobs. Since half of all women in the workforce are employed in such positions – working between 12 and 24 hours a week – they are especially vulnerable in this respect.

Responsibility of the social partners

The committee believes that employer and employee organisations are primarily responsible for preventing wage discrimination. Therefore, it proposes that companies should include a section on wage discrimination in the compulsory, annual risk inventory. Moreover, the social partners should regularly review collective agreements in relation to discrimination. It would also be worthwhile to examine remuneration standards to ascertain whether they are based on hard criteria such as job descriptions, performance and competencies, or on more random criteria such as the last-earned salary.

The works council could include a wage classification check in its guidelines pertaining to company mergers. Often with respect to mergers, differences are found between employees as a result of the accrued rights of longer established staff. It also appears that an employee’s initial classification is crucial to his or her remuneration progression. On balance, men appear to be better negotiators than women are in terms of their wages. The committee recommends negotiation training in relation to the initial job classification during the final year of study.

Marianne Grünell, Hugo Sinzheimer Institute (HSI)

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