Gender pay gap examined

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Various studies published in late 2004 indicate that there are still substantial wage differentials in Italy between women and men of the same age, with the same education and level of qualifications. The reasons cited for the continuing gender pay gap include women taking maternity and childcare leave, working fewer hours and having lower individual bargaining power, along with the absence of a gender mainstreaming policy in the workplace.

Tackling the gender pay gap - the differential between the average pay of women and men, to the disadvantage of the former - is a priority of the European employment strategy and of national employment and training policies. The European Commission's first annual Report on equality between women and men, published in 2004 (EU0403201N), confirms the persistence of this phenomenon and highlights that: 'The gender pay gap is still 16% on average in the EU and has hardly changed in recent years. The pay gap is significantly higher in the private sector than in the public sector. Differences in labour market participation, sex segregation, career and wage structures and the relative under-evaluation of female-dominated employment account for a large part of the gap.' The report calls on the Member States to take specific measures to reduce the gender pay gap in cooperation with the social partners. The EU's current Employment Guidelines (EU0308205F) state that: 'Member States will, through an integrated approach combining gender mainstreaming and specific policy actions, encourage female labour market participation and achieve a substantial reduction in gender gaps in employment rates, unemployment rates, and pay by 2010. The role of the social partners is crucial in this respect. In particular, with a view to its elimination, policies will aim to achieve by 2010 a substantial reduction in the gender pay gap in each Member State, through a multi-faceted approach addressing the underlying factors of the gender pay gap, including sectoral and occupational segregation, education and training, job classifications and pay systems, awareness- raising and transparency.'

In Italy, gender pay equality is a principle enshrined by the Constitution (in Article 37) and by the Workers’ Statute (Law 300/70), whose Article 16 forbids differentiated wage treatment between employees on gender, religious, political or trade union grounds. However, a situation of continuing pay inequality between women and men (IT0303106F and IT0104181N) is highlighted by a series of reports issued in late 2004:

• Contrattazione, retribuzioni e costo del lavoro in Italia nel contesto europeo, 2002-3 ('Bargaining, wages and labour costs in Italy within the European context, 2002-3'), published by the National Council for Economic Affairs and Labour (Consiglio nazionale dell’economia e del Lavoro, Cnel) and drawn up by the Centre for Economic, Social and Trade Union Studies (Centro di Studi economici, sociali e sindacali, Cesos);

• Diva - Differenze da valorizzare, discriminazioni da eliminare, funded by the Emilia Romagna region and the European Social Fund and drawn up by Ires regionale and LeNove, a company specialising in gender studies; and

• a fifth report published by the Italian Federation of Industrial Managers (Federazione nazionale dei dirigenti industriali, Federmanager), on managers’ wages in the industrial sector.

Recent tendencies

The Cnel report analyses gender pay differentials in Italy between 1998 and 2002, and suggests that they could be explained by differing productivity of the labour force by gender. The analysis indicates that, even though the gender gap in annual earnings is following a downward trend, it is still high. In 1998 men earned per year on average a quarter more than women, falling to 23.5% more in 2000 and 20.6% more in 2002. These differences are mainly determined by the fewer hours worked by women compared to men, the wage gap is in fact significantly narrower if hourly wages are considered (4%-5%).

The report finds that the annual wage differential increases consistently with age, education and qualification level. Younger women workers earn only 5%-7% less than their colleagues, while the difference is substantially higher for those aged 40 (20%) and above (25%). According to the study, thanks to new equality-based recruitment policies, wage differentials among young workers are following a downward trend. The level of education does not affect gender wage differentials significantly among the lower to middle education levels (with women's annual pay 20% lower than men's) but it has a greater relevance among workers with a university-level education ( (with women's annual pay 30% lower than men's). The report ascribes this to the different courses of study chosen by women and men and the consequent career possibilities (with women tending more to take courses in the humanities and arts and men to take technical-scientific course).

Analysis of wage differentials by vocational qualifications and educational level indicates that the higher the qualification the wider the pay gap. Between 1998 and 2002, women managers earned about 35% less than men with the same vocational qualifications, compared with gaps of 23%-25% for middle managers and 15%-20% for blue- and white-collar workers.

Experience and the length of service play a fundamental role in the causes at the basis of the gender pay gap, states the report. Women’s employment is characterised by longer periods of inactivity compared with male employment. Their periods of absence from the labour market are mainly due to maternity leaves, care of children and dependants and a different retirement age. At the end of the working life, this absence means a lower seniority level with their current employer (an average of 19 years of seniority service for women against 21 for men in 2002).

The study's analysis of wage differences by sector of economic activity finds that the main gender pay differential are in the private sector, and in particular in the credit sector (a gap of 30%) and in services to persons (25%). The gap is less wide in more regulated sectors such as transport (10%).

Women managers

Federmanager's fifth report on managers’ wages in the industrial sector finds that female managers' wages are 20% lower than those of their male colleagues with the same professional qualifications. The report records a positive trend in the employment of women managers (up 4.7% in 2001 and 6.1% in 2004) but the increase in managerial positions held by women has not been accompanied by an equal increase in their remuneration.

The Federmanager research - which is based on a sample of 329 companies, with more than 85,000 employees, of whom 2,300 are managers - traces the profile of women managers. Women managers have an average age of 46.3 years, against 49 for men, but the greatest percentage of them are about 55 years of age, while relatively few are above this age (only 8.6% of all female managers are aged over 55, against 21.4% of male managers). Women managers have an average seniority in their job of 13 years, which is more or less the same as men, but their average seniority is a little higher in administrative areas, at 16 years against 12 for men. Women managers’ annual average remuneration in 2004 was about EUR 76,290, or 20% less than men's (EUR 91,544). If those holding the position of general director are excluded from the comparison, the difference decreases to 11%. The commercial sector represents the only exception, with women’s average wages equal to those of men and in some cases even higher.

The Federmanager report underlines how the wage gap increases significantly with age. There are also differences concerning the variable part of pay (representing EUR 13,900 per year for women against EUR 15,700 for men in 2004) and non-collectively agreed pay increases (averaging EUR 5,500 per year for women against EUR 7,000 for men).

Bargaining and equal opportunities in Emilia Romagna

The Diva report on in the Emilia Romagna region studies gender pay differentials in the industrial and service sector, as well as collective bargaining on the matter.

According to the report, female workers in Emilia Romagna have given a great impetus to the region's economic and social development: female employment rates rose from 58.9% in 2002 to 60.2% in 2003, passing the 60% target set for 2010 by the EU's Lisbon strategy. However, despite this achievement, the annual average pay of women workers is still 20% lower than that of their male colleagues, and in case of white-collar workers 30% lower.

The majority of the reasons for this pay gap are unexplained, but the Diva research offers some pointers in addition to the labour market segregation factors mentioned above: less hours worked; absence of overtime pay, productivity bonuses and variable pay items; and leave due to maternity and family care. The report states that the origin of these differences lies in a work organisation that claims to be gender-neutral but, in the end, relegates women to the lowest job positions or, when they achieve higher positions, withholds autonomy and responsibility: 'Women are required to display greater working flexibility and mobility, confining the evaluation of their professional meta-competences; ie the capacity of cooperating with other people, solving conflicts, creativity etc, which usually belongs to women.'

A distinctive feature of the study is its analysis of sectoral, regional and supplementary (company-level) bargaining on equal opportunities and in terms of pay and careers inequalities. Although Emilia Romagna is a region with high female employment rates and implements labour policies particularly sensitive to these issues, the report highlights that the current framework is not adequate to the efforts made to combine family and work during the last few years by women in the region.

The report's analysis of supplementary bargaining over 1991-2001 in the Emilia Romagna region produces a picture that it finds very disappointing, with a low level commitment by trade unions and clear indifference among companies towards equal opportunities and issues relating to the reconciliation of work and private life. Women do not, it is claimed, seem to be able to play a key role in protecting both their collective and individual interests. According to the report, women are not able to affect the various aspects that determine the pay gap - undervalued job classification levels, static career paths, limited access to overtime work, and the various forms of incentives that usually constitute an important part of remuneration

In its conclusion, the Diva report points to a relationship between the culture of work organisation and gender discrimination, and underlines the importance of sectoral and company bargaining. Collective bargaining is seen as the means through which it could be possible to deal together with various issues such as wage differentials, reconciliation or work and family life, and women’s employment. Gender wage differentials are thus seen as part of a wider problem - they are part of a political, economic and occupational problem which, while involving vertical and horizontal segregation of women in the labour market, at the same time goes beyond the strict gender equality problem to fall within a more general strategy of national development.

Moreover, the Diva report claims that National Action Plans on employment, based on the EU Employment Guidelines, set out fragmented actions that are not sufficient to reduce the gender pay gap and, very often, do not appropriately assess their impact.

Commentary

The conclusions of the various recent research reports on gender pay differentials contribute to drawing up a fuller picture of the issue. There does not seem to be such a positive correlation between the length of service, professional growth and pay increases for women. The research indicates that the seniority level in their job, and thus work experience, is not a tool that enables women to improve their position on the labour market and within companies differently from men. The reason behind this situation may lay in women’s condition of occupational segregation. They are frequently assigned to jobs with a low professional content that do not allow them to improve and increase their competences, career and pay - a situation that consequently contributes to widening the gender pay gap as age increases.

The fact that the gender pay gap increases with age may also be explained by the high percentage of women among the ranks of 'atypical' workers. For men precarious employment is often a temporary situation, while for women it tends to be a longer-term reality and contributes to accentuate the pay gap phenomenon even between men and women of the same age and with the same education level It is true that female employment has increased but it must be underlined that it has essentially increased in the service sector, which is characterised by precarious, flexible and low-paid labour.

It should be also noted that collective bargaining attaches a very low importance to the issue of pay equality. Trade unions and employers’ organisations seem satisfied by the principles contained in Italian legislation and in the national sectoral collective agreements, which formally express the principle of equal pay for equal work. The reality is very different: wage differentials have increased and companies tend to manage wage conditions individually outside the collectively-agreed conditions. Women, in any case, are disadvantaged by the existing cultural prejudices that see them as less reliable in terms of flexibility and devotion to work. The situation indicates the problems and difficulties faced by Italian trade unions in generalising decentralised bargaining: under 30% of companies negotiate a supplementary agreement on pay, and thus the capacity of having collective control of company wage policies is very low.

Lastly, it is important to underline the difficulties within the trade unions themelves in tackling gender policies. Women are under-represented in the trade unions’ executives and it is thus very difficult to implement fully European mainstreaming policies where there are executives that hardly perceive gender problems as a priority in their daily activities aimed at protecting workers. (Domenico Paparella, Cesos)