In an auspicious start to 2018, Iceland’s new law, the Equal Pay Standard, came into effect on New Year’s Day. In short, the law – which was first proposed last March – will require that Icelandic employers with more than 25 employees must prove that they do not pay women less than men for the same work. They must review their payment structures every three years and present these reviews to the government for certification; failure to do so will result in penalties and possible fines. It’s important to note that equal pay has been enshrined in Icelandic law since 1961, and likewise, equal pay for equal work was one of the European Union’s founding principles – embedded in the Treaties since 1957. However, due to a variety of factors these laws and principles have been hard to implement, and the pace of change has be very slow. For example, on average, globally women are paid $12,000 to men’s $21,000 per annum, and the average progress on closing the global gender gap stands at 68.0% – leaving a 32.0% gap to be closed worldwide. These current trends suggest that the overall global gender gap can be closed in 100 years, which is an increase on the 83 years recorded in the World Economic Forum’s (WEF) 2016 Global Gender Gap Report.
In the case of the European Union, there are a number of initiatives aiming at reducing the gender gap, such as the 2020 Strategy and the European Pact for Gender Equality 2010- 2020. However, according to Vĕra Jourová, the EU commissioner in charge of justice and gender equality, discrimination is still a major factor, and current EU legislation is ineffective because it is not strongly enforced. In order to counteract this, the commission is now advocating for gender quotas requiring 40% of a company’s non-executive directors to be female. Firms that fail to meet that threshold will be required to prioritize female candidates over men when filling a board seat.
In fact, board quotas were adopted by Spain as long ago as 2007, by Belgium France, Italy and the Netherlands in 2011 and Germany brought in quotas in 2016. While the success of these measures has varied across the countries which have introduced them, clearly the commission feels that widespread advocacy for gender quotas will have an impact on the gender pay gap. However, the WEF’s recent report suggesting an increase of 17 years on the closing of the gender gap highlights the fact that more radical action needs to be taken to achieve pay equality. Gender remains defining factor in the European labour market. Over the last decade there has been no clear reduction in the gender pay gap, with the gap even increasing in some countries. The fact that equal pay is enshrined in law, yet is not improving – or is only improving a glacial pace – is indicative of the need to take action. Clearly, unless organisations are shamed, or legally forced into transparency such as in Iceland, there is little incentive to close the gap.
For example, in the UK, the ongoing saga regarding the pay gap among male and female staff at the British Broadcasting Corporation (BBC) demonstrates the partial effectiveness of the naming and shaming approach: in summer 2017 the BBC was forced to reveal the pay of its top earners, which demonstrated marked differences in the amount women and men were paid for the same jobs. Furthermore, two-thirds of stars earnings 150,000 or more are male, and the top seven earners in the BBC’s 96 best-paid stars are all male.In fact, since the pay differences first came to light, more than 200 women at the BBC have made an internal complaint about pay in the organisation, with 10 more senior women engaging external employment law advice. Furthermore, the equal pay crisis has been back in the news due to the recent resignation of the BBC’s China editor, Carrie Gracie, who resigned in protest over the ongoing pay inequality at the BBC. Her salary as China editor was 135,000 per annum, while her two male counterparts – the North America and Middle East editors – earned between 200,000 – 249,000 and 150,000 and 199,000 respectively. While the BBC offered her a pay rise to take her wage closer to (but not in line with) her male colleagues, Gracie was forced to resign, lamenting the BBC’s lack of commitment to equal pay for equal work.
While the BBC was forced to make salary disclosures, other UK organisations with 250 or more workers must publish their own figures on gender pay gaps before April this year. Unlike Icelandic companies, they won’t face sanctions for pay disparity, but they will open themselves up to the same scrutiny that the BBC has been facing. Already 527 British firms have published their figures, with some facing significant criticism. However, without the threat of legal penalties from the government, it’s unlikely that these gaps will be closed any time soon.
With 83 years still to wait for wage equality it’s clear that more needs to be done. It’s admirable that the European commission are advocating quotas for more women on boards, but this will do little for the majority of Europe’s female workforce in lower paid and part time positions. However, what is clear is that greater transparency around pay – whether that is forced by law or public pressure – at least affords women the knowledge they need to challenge their employer. Women cannot complain about unequal pay if they don’t know about it – which is something that employers are, presumably, currently relying upon. Hopefully, in the future, employers will value their female employees as much as they do their male, and in so doing will pay them equally for equal work.
Rosalind Duignan-Pearson, Volonteurope Communications and Network Development Coordinator