Gender pay gap: how about gender equality in Europe?

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Woman leaning at the table and looking at her mobile phone – gender pay gap
Key facts about the gender pay gap

reading time: ca. 6 minutes

  • The gender pay gap is the wage difference between women and men. There are two kinds of gender pay gap: adjusted and unadjusted.
  • In the European Union (EU), the unadjusted gender pay gap is on average around 13 per cent.
  • Equal Pay Day marks the day of the year until which women symbolically work for free.
  • The main reasons for the pay gap include that salary structures are often non-transparent, women work in low-paid jobs, and they take career breaks more frequently.
  • To reduce the gender pay gap, political measures would be most effective.

Equality between the men and women? This is still a long way off in many countries, but some are getting there. The gender pay gap is one way of showing inequalities between women and men in a measurable way.

Anna and Anton work in a similar position with the same qualifications. Nevertheless, Anton earns more than Anna. Why? The gender pay gap provides a useful tool for answering this question. It is a regular matter of discussion and often used to show social inequalities. The problem: It is often presented without context and uses different figures. For many people, this is confusing and hard to understand. That is why this article explains how the different figures come up.

What the gender pay gap means

The gender pay gap is published every year. Therefore, it is always a topic of discussion in society. But what exactly does it describe and how is it measured?

First of all, it represents the wage difference per hour between women and men. The reasons for this difference are diverse: Women, for example, work more often in low-paid jobs or are less likely to come in leading positions than men. But even if women have a comparable position and the same qualifications as men, the salaries can vary.

There are two kinds of gender pay gap: unadjusted and adjusted. They represent two different methods of calculating the pay gap, with each having a different message.

Inadjusted gender pay gap

It generally compares the average wage of all employees. In doing so, it calculates the difference in wages between women and men in per cent. For the calculation, the wage difference for different occupations as well as other qualifications or career stages is included. The results are based on a four-year earnings structure survey and are categorised into the following areas: age, education level, occupation, performance group, collective agreement coverage, influence of public sector, company size, and economic sector.

Adjusted gender pay gap

This is a direct comparison between sectors and jobs. The wage gap of gross salaries between women and men in comparable professions and occupations is calculated. The figures are always lower than the unadjusted value. The adjusted gender pay gap bases on an earnings structure survey, too. However, the focus lies on measuring the differences that allow to draw conclusions about structural differences between the genders per occupation, sector or career level. Since 2014, results on the adjusted gender pay gap have also been available for all member states of the EU.

Both calculations have their right to exist. Most statistics work with the unadjusted gender pay gap – this figure is larger and thus attracts more attention. In Germany, for example, the unadjusted gender pay gap was 18 per cent in 2022, while the adjusted gender pay gap was 7 per cent. It also shows the most important differences: Women usually spend more time on care work, such as raising children or caring for relatives, and work part-time more often.

Gender pay gap in an EU comparison

In the member states of the EU, the unadjusted gender pay gap varies significantly. Data is currently available from Eurostat at EU level for the years up to 2021.

  • Romania, Slovenia, and Poland have a very low gender pay gap (below 5 per cent).
  • This is immediately followed by Italy and Belgium, with an earnings gap of around 5 per cent.
  • The EU countries Spain, Greece, and Croatia are positioned in the middle: the gender pay gap is around 10 per cent.
  • The Czech Republic, France, and Slovakia have a pay gap of over 15 per cent.
  • Among the frontrunners – and thus having the highest gender pay gaps at EU level – are Hungary, Germany, and Austria. In these countries, the gap is between 17 and 19 per cent.
Couple puts their hands on each other

In 2021, the pay gap between women and men in the EU is around 13 per cent on average. In 2012, the EU average counted 16.4 per cent, which means it has already decreased since then.

The Equal Pay Day

Every year, Equal Pay Day takes place as a day of action to symbolically mark the day until which women work for free. It thus draws attention to unequal payment. If the gender pay gap, for example, is 18 per cent, Equal Pay Day takes place on 7th March. Since the pay gap figure changes every year, the day of action takes place on a different day each year.

The day which symbolises "Equal Pay" has its origins in the USA. The women's rights activist Susan B. Anthony led the demand for equal pay in the 1960s. She also played a significant role in the movement around women's suffrage in the USA. After her demands have not been met, the National Committee on Pay Equity introduced Equal Pay Day. Since 2011, the day of action has taken place in over 23 European countries.

»It helps to talk about our wages, with friends, with colleagues or with our family. Transparency helps everyone for a more fair payment.«

Tijen Onaran, CEO & founder of GDW Global Digital Women GmbH

Why do salaries differ so much?

The unequal distribution of income can be traced back to various reasons. The main reasons include that wage structures are often intransparent, that women work in low paid more frequently, and that they interrupt their careers more often.

1. Imbalance in the labour market

A woman works as a nurse and a man as a craftsman – these are gender-specific professions. For both professions, a three-year training is required. Nevertheless, the salary differs considerably. A physically straining job as a craftsman is supposedly valued higher, while working with sick people in a hospital receives less recognition. Moreover, the physical aspect of this job is often overlooked. In this example, the woman earns less than the man and is therefore put at a disadvantage. But even within the same industry, women often earn less than men, as the adjusted gender pay gap shows. They are promoted more rarely and cannot advance in their careers as quickly as men.

2. Time-outs and breaks

Of course, there is no law that says women should do most of the care work in the family. Nevertheless, it is common in many families. This involves unpaid housework, raising children or caring for relatives. A 2018 study by Oxfam states that worldwide, women and girls spend 12 billion hours on unpaid care work every day. As a result, they are more likely to work part-time, have career interruptions due to extended parental leave, and are thus less likely to come in leadership positions. Additionally, there is a lack of childcare options that could clear women of this charge.

3. Non-transparent wages

There is another problem that influences the gender pay gap: missing wage disclosure in companies. The lack of transparency is partly responsible for the pay gap. Women are also often more reluctant to negotiate salaries or ask for bonuses or promotions. If salaries were transparent, there would certainly be both, positive and negative surprises for many people. With more transparency, everyone would have the opportunity to compare salaries and know what to demand in the next salary negotiation.

If women earn less money in their lifetime, this automatically has an impact on their pension. The gender pay gap results in the gender pension gap. The significantly lower pensions also mean that women suffer more often from old-age poverty. Moreover, the reasons behind gender pay gap show that it is not only a matter of gender, but also a family issue.

 
Three women sitting together laughing

How can we create more equality?

The greatest opportunity to achieve equality lies in family-related contexts. Currently, there is a lack of appropriate measures in politics. However, they would represent the most effective weapon against the gender pay gap. Childcare facilities need to be significantly expanded and the full-time working week of 40 hours could be reduced. If, for example, everyone had a 4-day week, care work could be distributed more equally. Furthermore, socially relevant professions in (child) care and education should be rewarded with higher salaries.

Furthermore, it would be helpful to make salaries become transparent. This way, it would be easier for women to not sell themselves short in negotiations. Tijen Onaran, CEO & founder of GDW Global Digital Women GmbH, said: »It helps to talk about our wages, with friends, with colleagues or with our family. Transparency helps everyone for a more fair payment.«In conclusion, the smaller the gender pay gap becomes, the closer we come to equality. It is only fair when neither gender, nor family situations play a role for one's financial security.

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