Last week, on 21.10.2019, the time had come again: Equal Pay Day in Austria and thereby the day, which depicts symbolically the pay gaps between women and men. In statistical terms, from 21st October to the end of the year women compared to men, will work for free – for a period of exactly 72 days.
The “good” news first: in 2019, the Equal Pay Day took place one day later than in 2018. That this is not a cause for celebration was made clear by Evelyn Regner, Chair of the Committee on Women's Rights and Gender Equality (FEMM) in the European Parliament. The SPÖ MEP urged to finally tackle pay gaps and not only to pay lip service. Looking towards Iceland shows how it could be done. The Icelanders have introduced hefty fines for companies that do not pay women and men equally. Hence, unfair pay is no longer worth it.
“Dear Ursula,...”: What to expect at European level
This year, the European Unequal Pay Day “only” takes place on 4th November. Hence, pay gaps in Austria are bigger than the European average. The Gender Pay Gap on EU average is 16 %, but a whopping 19.7 % in Austria. The Commission President-designate Ursula von der Leyen had announced the “binding pay-transparency measures” within the first 100 days. These shall be prepared by Helena Dalli, Commissioner-designate for Equality. Pay transparency is understood as the first step towards pay equity, as transparency would make the adjusted pay gap obvious. On the basis of transparency, disadvantaged people would be able to proceed against unfair pay. However, more transparency does not automatically lead to equal pay: the responsibility and burden of proof remains with the people affected. Critics point out that class action lawsuits would be essential to ensure that increased transparency would have a real effect. In addition, a Harvard study shows that pay transparency might lead to lower wages and that men of all people use pay transparency to negotiation higher salaries.
Taking a look at Iceland
That things can be different is shown by the Icelanders. In 2018, Iceland made it illegal to pay people different wages because of their gender. It is the enforcement of the law that makes all the difference. Every business with over 25 employees is obliged to provide an annual report that states who earns how much for what kind of work. Anybody who does not report and who pays unequal wages is denied the Pay Equality Certification. From 2020, each day will cost the employer 385 € not to mention the damage of the company’s reputation. With regard to such hefty fines it is clear that unequal wages do not pay off. Hence, similar regulations across Europe would be desirable.
Social dialogue essential
The example of Iceland also proves that only social dialogue with all participants can lead to a good solution. In addition, it has become clear that collective agreements benefit fair pay also between the genders. In view of European solutions concerning fair pay, ETUC recently demanded the mandatory review of pay structures, so-called audits, of companies who employ ten or more workers as well as fines, if these audits are not forthcoming. Employees should get the right to inquire about their colleagues’ pay and confidentiality clauses concerning pay should also be abolished.
Transparency does not yet bring equality
There is doubtlessly more to combatting the economic inequality between women and men than inquiring about the salary of a male colleague. The reasons for inequality are wide-ranging. Hence, the AK has been demanding for a long time for example to increase childcare facilities and to promote the fair share of care by both parents. Subsequently, transparency must also apply to unpaid work, the lion’s share is - as it is commonly known - done by women. The consequences of this unpaid work is part-time jobs, which do not enable equal participation in the labour market and in addition lead to the Gender Pension Gap - which stands at 41.1 % for 2019.