The greatest New Year’s Resolution: Closing the gender pay gap

In the European Union many male employees earn more money than their female colleagues doing the same job. In spite of decades of struggle to narrow the gap, a significant disparity still exists in every member state between pay for men and women.
According to official EU statistics, women’s gross hourly earnings are on average 16.4% below those of men across the member states. The gender pay gap in the Czech Republic, Germany and Slovakia exceeds 20% and in Estonia it reaches almost 30%. In Lithuania and Hungary the gap is slightly below the EU average, while the smallest gaps are in Slovenia, Poland and Romania.
To our delight, finally someone took their New Year’s Resolution seriously. From 1 January 2018, Iceland made their employers to prove that they pay the same salary to men and women for the same work. The new law requires government offices and private businesses employing over 25 people to obtain a certificate that they apply equal pay policies, otherwise they risk being fined or audited. Companies with 25 full-time employees or more must analyze their salary structures to ensure that their pay practices do not discriminate against women. Then they must demonstrate to accredited certification bodies that all of the requirements of the equal pay standard have been met or face penalties, including fines.


Germany has also taken steps to narrow its significant 21% gender pay gap with a new law. As of 6 January 2018, employees in Germany can check how much their colleagues earn. This works both ways, so men can also check on the average of their female colleagues’ salaries. However, the law only applies to companies with more than 200 employees, while only firms with over 500 staff are requested to do operational audit on their salary structure and gender-pay equality. Additionally, the law does not enable employees to explore how much an individual co-worker earns, though it allows individuals to request information about the average payment of the opposite sex based on at least six colleagues of the opposite gender in the same or similar positions. The German law seems like a midway measure compared to Iceland, but transparency will at least help close the pay gap and create equal opportunities for women.
Iceland intends to completely eliminate the gender pay gap by 2022. According to some recent calculations in member states of the Organization for Economic Cooperation and Development (OECD) it would take almost a century to close the gender pay gap. However, the World Economic Forum estimates that it could take 170 years to eliminate gender-pay inequality worldwide.
Closing the gender pay gap will not only make girls, mothers and wives happier, but will also help our economy thrive. According to recent calculations, the potential boost to women’s total earnings in OECD countries from closing the gender pay gap could reach 1.66 trillion Euros. Naturally, the effects of this additional spending could generate an even larger boost to member state economies. Recent estimates suggest that economic gender parity could add an additional 257 billion Euros to Germany’s GDP.
In light of the fact that the European Union has been taking action for more than 60 years in closing the gender pay gap, these numbers are very disappointing. Progress in closing the gender pay gap appears to be very slow, and in several countries the gap is even widening once again.
Gender equality is a fundamental right, a common value of the EU and a necessary condition for achieving EU objectives of smart, sustainable and inclusive growth. Welcoming the latest action in Iceland and Germany, this article is a discrete contribution to raise awareness of the existence of the gender pay gap.

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