What is Gender pay gap?
The gender pay gap is the difference in average gross hourly earnings between women and men. It is based on salaries paid directly to employees before income tax and social security contributions are deducted.
Working women in the EU earn on average 14% less per hour than men.
The reasons for gender pay gap are:
- sectoral segregation (when women are overrepresented in low-paid jobs and men are overrepresented in better-paid jobs);
- Unequal share of paid and unpaid work (women are more likely to work part-time because they need to take care of children when men are more likely to work full-time because they do not participate in household duties);
- the glass ceiling (companies simply do not let women get top positions).
The difference in payment that men and women get for the same job also is one of the reasons, which influence to the gender pay gap.
Example
When a man gets a higher salary than a woman in the same position does because it is believed that a man needs more money to support his family. This is a stereotype because women support families too.
Gender pay gap explained:
Pay gap in EU countries
Women in the EU earn on average 14% less per hour than men. This equals almost two months of salary. The equal pay day marks the day where women effectively on average, stop earning relative to men because of the gender pay gap. In year 2021 European Equal Pay Day was on 10 November.
There are large differences between member states: the biggest gender pay gap was recorded in Estonia, Latvia, Germany, Austria (19-23%), while the EU countries with the lowest gender pay gap are Italy, Luxemburg, Romania (3-6%).
In year 2019 pay gap:
- Lithuania: 13.3
- Spain: 11.9
- Cyprus: 10.1
- Poland: 8.5
- Romania: 3.3
Women in the European Union still earn less than men on average.
For every 1 euro men earn, women earn 86 cents.
The general observation is that the more responsibilities a job has, the more chances are that a man will be paid more for it. The pay gap is the biggest at executive positions where men earn 28% more than their female colleagues.
Some insights
People usually don’t understand why companies just wouldn’t hire only women if they can pay them less than men. This happens for two reasons: manager bias and customer bias. Manager bias means that a hiring person sees women as less valuable and less productive in the workplace, so they hire them less or pay them less. Customer bias means that many customers prefer to talk about business with males rather than with females and an employer understands it, so again hires less women and pays them less.
The gender pay gap in Europe
What is horizontal segregation?
Horizontal segregation is when almost all (or all) workers of a specific work industry are of the same gender. Industries that women usually choose are connected to caregiving, for example, a kindergarten or school teacher, a nurse. And men usually choose jobs connected to technologies, for example, an engineer, an IT specialist.
For example, teachers in schools and kindergartens are usually women and firefighters are usually men. This happens because of stereotypes that women are gentle, caring, kind, so they can work better with children while men are strong and fearless, so they can do a risky job. These stereotypes has strong impact on choosing the professions and jobs.
Nevertheless, you can choose a job that you like and want to do, even if women usually do not work there.
Teaching is predominantly a female field: 72% of school teachers in the EU were women in 2017. On the other hand, IT is predominantly a male field: 82% of IT specialists in the EU were men in 2019. As most IT specialists are men, women might face discrimination when seen as not qualified enough or not naturally skilled for this job.
What is vertical segregation?
Vertical segregation is a situation when women do not get promoted beyond some level in the organization.
A company where women only work in low positions with smaller salaries and men work in top positions with higher salaries has vertical segregation.
Example
A clothing shop where women work as shop assistants and cleaning staff and men work as managers and bosses. This happens because of gender stereotypes that women are not as smart and skilled as men are and that women are better housewives and men are better workers. Such thinking is negative both for women who cannot get promoted even if they are qualified for the job and for the companies that are losing skilled female employees.
The higher the position, the fewer women are seen there. Statistics of managers in the EU in 2018 says that 36% of managers were women, 27% of board members were women, and then only 17% of senior executives were women. Women tend to not get as advanced in the company as men because of gender bias that women cannot be good at leadership positions.
What is a “glass ceiling”?
A “glass ceiling” is a metaphor for the barrier that women experience in their careers. It means that it is more difficult for women to build a career than for men because of gender stereotypes.
We will see the problem of the “glass ceiling” in the example of Mary. Mary works in a business company and wants to get a promotion. She goes to the interview but her male colleague who has less experience gets the job. In this situation, Mary is prepared for the job better than her male colleague but she does not get it because she is a woman. This happens because of the stereotype that men are more ambitious and can devote more of their time and attention to work while women care more about their family than about their work.
Statistics say that men outnumber women in management positions by two to one in the EU. The Member States with the best gender balance in management are Lithuania, Hungary, Bulgaria, Cyprus and Latvia, where over 40% of managers are women.
As a result of “glass ceiling” women have to work on less prestigious jobs and earn less money even if they are as qualified and skilled as men are.
Glass elevator
Glass elevator is a phenomenon when it is very easy for a man to climb a career ladder in the female-dominated field (nursing, teaching, social work, librarianship) because of the stereotype that men are better leaders than women.
Men working in female-dominated fields are rare because usually those jobs are not well-paid, so such industries promote men and raise their salaries much faster than they promote and raise salaries of women. In result, women have fewer chances to get promoted even in the fields where most workers are females. For example, while the teaching profession is overwhelmingly female, male teachers are almost twice as likely to hold leadership positions as their female colleagues.
How to reduce the gender pay gap
There are many factors behind the gender pay gap:
- Sectoral segregation. Around 24% of the gender pay gap is related to the overrepresentation of women in relatively low-paying sectors, such as care, health and education. Highly feminised jobs tend to be systematically undervalued.
- Unequal share of paid and unpaid work. Women have more work hours per week than men but they spend more hours on unpaid work, a fact that might also affect their career choices. This is why the EU promotes equal sharing of parental leaves, an adequate public provision of childcare services and adequate company policies on flexible working time arrangements.
- The glass ceiling. The position in the hierarchy influences the level of pay: less than 8% of top companies’ CEOs are women. Nevertheless, the profession with the largest differences in hourly earnings in the EU were managers: 23 % lower earnings for women than for men.
- Pay discrimination. In some cases, women earn less than men for doing equal work or work of equal value even if the principle of equal pay is enshrined in the European Treaties.
Consequences of the Gender Pay Gap
Lower pay makes it harder for women, especially single women, to get ahead financially. Their lower earnings make it harder for them to save money for emergencies or retirement. But the impact of the gender pay gap isn’t limited to women. It also puts families at risk, especially single mothers and their children, and harms the economy as a whole.
Reducing the Gender Pay Gap
In order to reduce the pay gap it is necessary to create equal working conditions for men and women.
Here are a couple of examples of how it is possible to do.
Work life balance for women and men
Flexible schedules: women take time off during working days more often than men because they need to take a child from school to home or to the doctor. A flexible schedule can allow women to do their job in the hours when they are freer.
Parental leave: if dads can also take time off work to take care of their baby, then a boss does not have a reason to promote a man over a woman.
An available service for child and elderly people cares also increases women’s opportunities in labour marked and carrier seeking.
Equal participation across different sectors of the economy
Promote women’s leadership and encourage them to follow non-traditional careers for women. In digital transition era it is extremely important to promote women to the digital sector of the labour market.
Payment transparency
If workers can see who earns how much for the same job they are doing, bosses will not be able to pay men more than women.
The gender gap does not hurt only women; it hurts everyone. Increasing women’s participation in the work force and closing the pay gap between women and men will have a positive impact on economic growth in the EU.
Economic benefits of reducing gender pay gap:
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