March 1, 2024

'relatively easy': transparent wages versus the gender gap

‘relatively easy’: transparent wages versus the gender gap

These measures are still often very new and their evaluation is still in its infancy, according to the current OECD report “Wage Transparency Tools to Close the Gender Pay Gap.” But wage transparency is a “relatively simple and intuitively understandable tool for identifying wage differentials and taking countermeasures in the workplace.” This applies above all to medium and large companies whose management of employees has the ability to account for gender differences.

Payroll disclosure gives employees, employers and the public an important tool in the fight against income inequality, because it shows not only the existence of the problem, but also its dimensions. However, some points must be taken into account.

different approaches

Experience shows that as many parties as possible – particularly trade unions or labor councils – are involved in the process and that the results should be prominently disseminated. The state should clearly dictate to companies which data to correct.

Centrally provided wage calculators that companies can use to evaluate and provide data are useful. In Switzerland, for example, there are government-provided analysis tools in the form of Logib, which companies of different sizes can use to calculate the gender wage gap. The Organization for Economic Co-operation and Development recommends that compliance with the requirements should be monitored and penalties should be imposed for deviations.

Different countries have different approaches, each of which is quite successful. They range from public exposure to atrocious reports in Great Britain to controls imposed by labor inspectorates in France to the dissemination of data via social security in Lithuania.

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low cost

However, one should not forget to describe a post-deployment damage reduction plan and compliance monitoring. Here, too, from the point of view of the Organization for Economic Co-operation and Development, governments or trade unions play an important role.

You must always maintain pressure to enforce the rules. Even in typical countries like Sweden and Finland, there are companies that do only the bare minimum and make no effort to reduce discrimination. Smaller companies must also be integrated into the system – costs are very low once the system is established, according to the OECD.

With an average difference of 12.9%

Previous studies on companies that have made wage distribution transparent could have shown a small reduction in the wage gap — if it was reported too prominently or penalties were threatened. The amendment was made to reduce men’s wages rather than increase women’s incomes. The weaker the penalties or visibility, the lower the effects of wage transparency appear to be.

Equal pay and anti-discrimination laws are important, but in practice the burden of ensuring equal pay is placed on individual workers and has done little to bridge the gap, says the OECD. So far, dismantling the distinction has been very slow. In the 25 years since 1996, the wage gap in OECD countries has fallen from less than 19 percent to 12.8 percent.

A greater share of unpaid work

Clear discrimination when doing the same job is just one of the dimensions that leads to lower wages for women. In addition, women do a much greater proportion of unpaid work in the family, end up in lower paid social occupations more often and move up the career ladder more slowly and lower – also due to family leave.

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The higher the income category, the larger the wage gap. This also shows how difficult it is for women to get high paying jobs. In contrast, minimum wages contribute less difference to lower wages, according to the Organization for Economic Co-operation and Development.

The difference in income affects a woman’s entire life – even after her working life is over. Women over 65 years of age receive only three-quarters of men’s pensions, while 15.7 percent of older women live in poverty, compared to 10.3 percent of men.

It’s about kids too

And in the end, it concerns not only women, but children as well. It is not just that higher mothers’ incomes lead to higher family incomes and thus to a better situation for the children. “In addition, it has become almost universally known in economics that children are healthier when their mothers control a greater part of the family’s resources,” the report says. This, too, is greatly influenced by who brings home the amount of income.

position of empowerment

Meanwhile, Minister for Women’s Affairs Susan Raab (ÖVP) wants to encourage young women to enter professions with better earnings prospects. To this end, a position of “Empowerment” is created, which is the presentation and coordination of projects on this topic throughout Austria.

According to Raab, the entry of women into higher-paying sectors is the right approach to closing the persistent income gap compared to men.