This week, the Committee on Women's Rights and Gender Equality (FEMM) of the European Parliament adopted a report, which requires an EU-wide strategy to end and avoid the gender-specific pension differential. A closer look at the gender pension gap shows why this strategy is urgently required.
The gender pay gap hits the headlines at least three times each year – on the occasion of the two Equal Pay Days and on International Women's Day on March 8. However, the unequal share of pensions, the so-called gender pension gap is far less frequently debated.
On EU average, the retirement benefits of men and women show far greater differences than the gender pay gap, which – in its largest calculable form (insensitive to sectors and not differentiating between full and part-time employment) – amounts in Austria to 21.7 % (2015). On average, women’s pensions in the EU are about 38 % lower than men’s. With a discrepancy of 39 %, Austria ranks behind Germany (at 45 %), Luxembourg, the Netherlands and the United Kingdom in fifth place of the largest gender-specific differences. These asymmetries are symptomatic for the fact that women in Austria, as in the EU in general, have never received equal wage for equal work, and for the fact that unequal treatment does not stop as soon as people withdraw from working life. Why is it that women and men receive such unequal retirement benefits?
The pension system of many European countries is still based on the model of the 'male breadwinner’, who started being employed at a young age and worked continuously until his retirement. This continuous history of full-time-employment is no longer the case for an increasing number of people in Europe. Today’s retired women were faced with an even stronger social model that considered them being financially dependent on their husbands. Their own gainful employment was regarded as optional additional salary, which, in case of child raising duties or other care activities, had to be put aside. Due to income discrimination, they earned less for these activities, longer breaks resulting from care duties made attempts to return into the labour force more difficult. These fragmentary and short occupational biographies are reflected in significantly lower retirement benefits – in almost all EU countries, women are exposed to a significantly higher risk of poverty. EU-wide, almost 15 % of female retirees and 11 % of male ones are at risk of poverty; at the level of individual Member States such as Estonia, Latvia or Bulgaria, this difference exceeds 10 %. Policies clearly influence these gaps and different pension models in the past are reflected in today’s age-specific disparity of the gender pension gaps.
Today’s women are more likely to be employed and most of them also work for longer periods of their life. However, part-time work rather than full-time-employment is more often than not part of female employment histories. In particular women who face care duties often chose this form of employment, part-time occupations however come with lower wages during employment and lower contributions to the social system. The unequal share of house and care work results in the fact that women – not men –suffer from occupational disadvantages when starting a family. What is more, women are still underrepresented in leading positions and mostly work in in poorly paid and socially undervalued fields related to care, healthcare and education: sectors, which, within the scope of austerity measures were faced with severe cutbacks.
All of these arguments need to be considered in the requested EU strategy aiming at the removal of such imbalances. Up to now no specific policies have been suggested. From the perspective of the Chamber of Labour it is important that no immediate and sole increase of the legal retirement age for women is introduced, as any extension of the required periods of employment is only to make it more difficult for women to reach them while facing the outlined structural barriers. Also, a further shift to private pension systems must be avoided as unequal wages prevent equal payments and equal conditions for women and men. Far-reaching reforms are needed that remove these barriers along the entire occupational biography that make childcare facilities available break through the glass ceiling and demand a fair division of care duties. In the meantime, the Brochure of the AK and the AK pension calculator can be used as a support at an individual level.