And what do you earn?

On 17th of March was Equal Pay Day. It symbolically marks the gender pay gap, which according to the Federal Statistical Office is currently 21% in Germany and has not shrunk for years. It was already 21% in 1995! An important reason for us to take a closer look at the reasons for the wage gap between men and women today.

Origin of the Equal Pay Day campaign

Equal Pay Day originated in the USA. In 1988, the American Business and Professional Women (BPW) created the “Red Purse Campaign” as a symbol for the red numbers in women’s purses. BPW Germany picked up on this idea and launched the “Red Purse” initiative in 2007, which laid the foundation for the nationwide introduction of Equal Pay Day.

Inequality throughout working life

The fact that women in Germany currently earn on average 20% less than men falls short, as scientists at the German Institute for Economic Research (DIW) and Freie Uni Berlin point out. On behalf of the Bertelsmann Foundation, they have compared the income of a working life – and come up with completely different figures. According to the study, women earn only about half as much as men over their entire working life. In the West, the expected lifetime income is on average around 830,000 euros for women, while men earn an average of around one and a half million. In eastern Germany, it is expected to be around 660,000 euros for women and just under 1.1 million euros for men. Whoever only records the difference in gross hourly wages cannot represent the inequality in the entire working life. For this reason, labor market expert Manuela Barisic argues in favor of the “Gender Lifetime Earnings Gap,” which depicts the gap in lifetime earnings.

Reasons for the Pay Gap

Part of the immense pay gap can be attributed to so-called structural differences. Many women learn (social) professions that are less well paid. For example, they continue to become educators, geriatric nurses and hairdressers more often than men. Women do not choose these professions out of naivety, but because they are good at what they do and want to follow their calling. However, on the other hand, common role stereotypes continue to influence women’s career choices. So there is a difference between girls being pushed into these professions by family and society and choosing them freely and after ample deliberation. But the decisive point is: Germany urgently needs an upgrading of social professions and a minimum wage that is enough to live on! It is also a fact that women work less often in management positions and more often part-time or in mini-jobs. But even if you factor out these factors and look at women and men who work the same amount in the same industry and the same position, there is still a 6% wage gap in Germany that cannot be explained.

Raising children is a woman’s job?

Raising children and caring for dependents always leads to a reduction in lifetime earnings – but almost exclusively for mothers and virtually not for fathers. This is because it is mainly mothers who take time out of the labor market. Moreover, “part-time” is the dominant form of employment for women in their prime working years between 30 and 50. Men, on the other hand, worked full-time in the majority of cases during this phase. These “absences” and subsequent barriers to entry result in long-lasting losses in wage and income development, which is reflected right into the retirement phase.

All educational strata affected

Women’s underpayment cuts across all educational strata and work groups. Research also shows that wages decline as more women move into previously male-dominated fields. Computer science used to be a women’s field and was comparatively low-paid; now it has become a very well-paid male domain. If more and more women were to move back into the IT field, wages would fall again here as well. The profession of primary school teacher used to be a typical and very well-paid male profession, with which the man could provide for his family very well as the sole wage earner. Now, however, the tide has turned again. Primary school teachers are now mainly women, which in turn has led to falling wages in the teaching profession. A frightening development!

Lack of transparency

Germany fares much worse compared to the rest of Europe, which has been taking action against discrimination for longer and with greater determination. Transparency is an important issue. In salary talks, women can only demand more money if they knew what their male colleagues earn. The Pay Transparency Act does nothing to change this. The law was enacted in 2017 and is intended to enforce the requirement of equal pay for women and men for the same work or work of equal value. Accordingly, employees in companies with more than 200 employees can demand information about the salaries of their male and female colleagues in comparable positions, including how their own salaries are measured. However, very few do so. Firstly, because the law is simply not very well known, and secondly, because German law does not provide for any sanctions for companies that violate the provisions. In addition, most companies are too small and thus exempt from the obligation to provide information, or there are not enough men in comparable jobs. Also, women would always have to take action themselves and are later quickly labeled as “complainers.” Iceland, on the other hand, requires companies to prove that they pay men and women equally or that there are real reasons for salary differences. Violations are subject to fines.

You don’t talk about money?

But you should talk about money! More than 40% of Germans don’t know how much their partner earns. Henrike von Platen, the patron of the Equal Pay Day campaign, advises: “Women and men urgently need to start talking openly about their salaries, both in the office and among friends. And not in groups of women or men, but with each other! This can only be done by each individual taking the first step.” Some studies also show that men and women are equally likely to ask for a higher salary – but women are less likely to get a raise. Yet women don’t negotiate worse than men. Crazy enough, the inequity starts with the pocket money of girls and boys: Boys tend to get more pocket money! If only boys live in the household, they receive more pocket money on average than girls of the same age. Only in families in which girls and boys live is it fair. Here, both sexes get the same amount of pocket money.

There is still a long way to go before pay equity is achieved. Both a cultural change in companies and legal requirements are necessary. Federal Minister for Women’s Affairs Franziska Giffey (SPD) says: “Without them, we won’t make any progress in terms of equal opportunities and equal rights, and if we do, then only at a snail’s pace. But women deserve equality in the here and now.” Right!

References

https://www.equalpayday.de/startseite/

https://www.dw.com/de/equal-pay-day-f%C3%BCr-frauen-die-h%C3%A4lfte/a-52802264

Werner, Katrin. 2020. Was sie verdienen. In: Süddeutsche Zeitung Nr. 62 vom 14./15. 3. 2020.

Heidenreich, Ulrike. 2020. Das Interview mit Henrike von Platen. In: Süddeutsche Zeitung Nr. 56 vom 7./8.3. 2020.