Mind the (Gender Pay) Gap: important steps the European Union must take

Following a series of complaints brought by the NGO University Women of Europe, the European Committee of Social Rights recently ruled that 14 of the countries which signed the European Social Charter(Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Finland, France, Greece, Ireland, Italy, the Netherlands, Norway, Portugal and Slovenia) do not guarantee the right to equal pay between men and women.

The question is reminiscent of the Orwellian principle that “all animals are equal, but some are more equal than others”. In fact, in 2020, the principle of “equal pay for work of equal value”, despite being enshrined in the Community Treaties ( articles 2 and 3, par. 3 TEU; articles 8 and 157, par 1 TFEU.), by the Charter of Fundamental Rights of the European Union (art. 23), by detailed community legislation and by the individual laws of the Member States, is not yet fully respected.

It is therefore inevitable to ask whether what the European Union is doing is sufficient.

The answer is a firm no. In this article, we will define the Gender Pay Gap (GPG), outlining its characteristics at the European level. In the last paragraph, we will propose solutions to be implemented at the community level. A unified response from the European Union is, however, what is really needed.

What is the Gender Pay Gap?

The European Institute of Gender Equality defines the Gender Pay Gap as the difference in the gross hourly wage between female and male employees expressed in relation to the male wage.

In the European Union, the Gender Pay Gap is 14.8%. This means that for every hour of work, women earn 14.8% less than men. Specifically, a woman will earn 0.85 euro every 1.00 euro earned by a man. As a result, each year women work around two months for free if compared to men.

Clearly, this is a figure that considers the European average, but in the individual Member States, the situation is heterogeneous. According to Eurostat, the countries with the highest GPG (between 20-22.7%) are the Czech Republic, Germany and Estonia, while the countries where the GPG is less than 10% are Italy, Belgium, Bulgaria, Luxembourg, Poland and Romania. The figures for the latter group of countries are not so impressive. In fact, quite the contrary is true. The reason why countries in the second group have the lowest pay gap is that they also have the lowest female employment rate. In other words: a country where fewer women work will have a GPG lower than in a country where there are more women working but working in low-income or part-time sectors. If fewer women work, the differences in wages are less visible. So, in countries like Italy, Belgium, Bulgaria, etc., two problems have to be faced: the Gender Pay Gap and, even before that, the low female employment rate. Essentially, we need to make sure that more women work and that they earn the same amounts as men.

The causes

The first cause is what we call "sectoral segregation”. While women are mainly employed in relatively low-income sectors, such as assistance and education, men work mainly in the STEM (science, technology, engineering and mathematics) sectors, characterized by higher earnings.

A second reason is that women typically devote more hours to unpaid work (such as child and family care, housework and similar activities) than men. A woman dedicates approximately 22 hours per week to unpaid activities compared to a man's 9 hours per week.

Another reason is that women tend to spend more periods of time out of the labour market and this has tremendous repercussions on several key factors, such as hourly wage, future earnings and retirement.

Finally, a fourth reason is the so-called "glass ceiling". Fewer women reach top positions in the workplace. In Europe, less than 10% of CEOs are women; in Italy, in large law firms, with a standard corporate organization and which tend to be the most attentive to the issue of diversity, only 20% of lawyers reach the partnership. This has significant repercussions in terms of earnings. Based on the data relating to the year2019 disclosed by Cassa Forense, despite having now reached parity in numerical terms, female lawyers earn about 40% compared to what was declared by male colleagues.

The effects

Clearly, the most evident effect of the Gender Pay Gap is the lower wages women receive. But it is not the only one. The Gender Pay Gap that a female worker accumulates over the course of her life also leads to a pension gap. Lower levels of salary and less time spent at work inevitably lead to lower contributions paid, higher retirement age and ultimately a lower pension. In Europe, the gender pension gap, at 30%, doubles the pay gap. It goes without saying that women are exposed to social exclusion and a higher poverty risk in old age.

And this situation is not only bad for women. The Gender Pay Gap also has consequences in macroeconomic terms for the entire population. In its resolutionof 30 January 2020 on the Gender Pay Gap, the European Parliament found that the Gender Pay Gap caused an overall economic loss of €370 billion per year. It is clear that eliminating the Gender Pay Gap would have a positive effect not only in terms of necessary and essential equality but also of economic growth for the entire European Union.

The action to be taken.

“We have run out of excuses and we are running out of time. We have come here to let you know that change is coming, whether you like it or not”

The words Greta Thunberg spoke to Katowice in December 2018, on the occasion of the 24th Conference of the Parties on Climate, could also be used to talk about gender pay equality. According to the latest report published by the International Labor Office, it will take at least 70 years to bridge the Gender Pay Gap. In all likelihood, therefore, our daughters will also earn less than our sons. Maybe things will change for our granddaughters. We need to implement and speed up this process and we need to act on two different levels, the socio-cultural level and the political level.

As for the first, a change in the conception of women is necessary, overcoming prejudices and gender stereotypes. Despite the undoubted progress over the years, we are still witnessing today an “essentialization” of the female figure, intended, first of all, as a mother, a person who cares and cares for and, secondly, as a worker. Moreover, they are still seen largely as adept at work only in certain sectors or part-time. This means that women remain subject to unpaid jobs related to the household. An example of the crystallization of this prejudice is art. 37 of the Italian Constitution, which, after having sanctioned, among others, the right of the worker to equal pay, provides that "The working conditions must allow the fulfilment of her essential family function and ensure the mother and child a special adequate protection". This norm was certainly revolutionary in the historical context in which it was adopted (January 1, 1948), especially considering the Catholic vision centred on the male-breadwinner model of many MPs of the Christian democracy. However, today it is absolutely inadequate and anachronistic. It makes the right to work of women conditional on the fulfilment of an alleged "family function". As if taking care of children were the exclusive prerogative of the mother and not the father or other family members, such as grandparents, for example. As if it were an unforgivable fault for the mother that babysitters and teachers take care of children while they go to work. And unfortunately, this vision is still rooted in the collective imagination. In no way is this meant to deny the need to protect motherhood, but it is unacceptable that it acts as a deterrent to discriminate against women, among other things, in the workplace. A woman must be considered first of all for what she is: a person, who has the same right to fulfilment from a professional point of view as anyone else.

With regard to the concrete actions that must be adopted, a key role must be played by the European Union. The EU needs to implement a unified policy, which can achieve more results than the initiatives of individual Member States. Only in this way can a homogeneous condition be guaranteed in all European states. To be clear: it is not fair that a woman who works in Poland has more difficulty in finding a job, and has a lower salary than a man than a woman who works in France. However, we must admit that the European Union is not completely defenseless. Indeed, gender pay equality is one of the topics of the political strategy for 2020-2025. However, everything remains very abstract. It is not enough to simply highlight a condition of inequality and injustice. The European Union must give a concrete answer to the problem, taking action to guarantee work and a decent wage, as well as an effective condition of social equality. Even more so at this time when the Coronavirus pandemic risks further aggravating the Gender Pay Gap. In our opinion, the action should take place on two levels:

1- Giving the European Union competence in the field of remuneration. The European Union must be allowed to intervene directly in the matter of remuneration, currently excluded by art. 153, par. 3 of the Treaty on the Functioning of the European Union. Only in this way could the European Union actually take action by adopting effective legislation in all Member States. The model could be the pay parity law passed in Iceland in 2018, which proved to be particularly effective, having practically zeroed the GPG.

2- Effectively combat the causes of the Gender Pay Gap. Specifically:

2.1- “Sectoral segregation” must be curbed by adopting suitable measures to promote the presence of women in every working sector, including those currently dominated almost exclusively by men, such as artificial intelligence. To do this, it is necessary to make scholarships available for targeted training courses, to stimulate and, above all, to make it possible for women to participate, so that everyone finally understands that each one of us, women and men alike, can do what each of us desires.

2.2 - Unpaid housework by women must be prevented from hindering their professional growth. There are two alternatives (adoptable at the same time): either these activities are shared equally between men and women, or the European Union and individual Member States must provide services that allow women to have a life even outside the home. In particular, an adequate public provision of childcare services, such as bonus babysitting and free kindergartens, must be guaranteed to allow greater family organization. These measures proved necessary and urgent especially now, given that, with the lockdown, women had to face a new problem: balancing smart working with online education for children and with all family caregiving in general.

2.3 - The "glass ceiling " must be demolished. Unfortunately, we must not be fooled by the framing of these words that make us believe that the problem is easy to solve. The European Union must take action to allow women to reach top positions as well. But how, you may ask? By providing, for example, that productivity bonuses are awarded by evaluating criteria other than time spent at work, for example, performance and productivity. On the other hand, it should be obvious to prefer the quality and quantity of work to mere presence in the office.

Towards true equality

The European Union has no more excuses: “The European Union promotes (...) equality between women and men'' can no longer be just fine words that we read in the EU treaties. We live under the illusion of being treated without discrimination based on gender, but data shows that the reality is different. The Gender Pay Gap is a reality, and this affects not only women but society as a whole. It is time for European Union to firmly guarantee equality for all its citizens.