Gender Pay Gap

The annually recurring tragedy

Only once a year, on Equal Pay Day, does the pay gap between women and men become an issue.

The annually recurring tragedy

It's that time of the year again: once a year, it is revealed and lamented how big the pay gap between men and women is. The realization that, despite holding comparable positions, women earn less, often opt for lower-paid jobs, work more part-time, are less likely to hold management positions and perform more care work than men, is nothing new. Even if the days of the three Cs – children, cooking, church – are over: Equal rights have not made any real progress in recent years. In politics and business, everyone is still looking at each other in the hope that they will finally take action. This is unacceptable, as lower earnings increase the risk of poverty in old age.

The assessment for 2023 is depressing as usual: the unadjusted gender pay gap has remained at 18% since 2020. That's how much less women earn per hour than men. In 2018 it was 20%, in 2006 it was 23%. If it continues at this rate, the German government's target of 10% by 2030 is utopian. A look beyond the horizon shows just how unsatisfactory the situation is and how unambitious the target is. After all, the 17.7% calculated by Eurostat for 2022 puts us in fourth place in the EU. The pay gap is only wider in Estonia (21.3%), Austria (18.4%) and the Czech Republic (17.9%). In Luxembourg alone, women earned more than men in 2022, albeit only 0.7%. Incidentally, the average pay gap across the 27 EU countries is 12.7%.

The bonus payments gap is even wider

According to the Federal Statistical Office, the difference that cannot be explained by shorter working hours, lower hourly wages and different employment histories – the adjusted gender pay gap – is 6%. The gender hours gap, i.e. the difference in time spent on paid work, is 18%. However, when it comes to the unpaid care work performed by women, the difference is noticeably higher: in 2022, the gender care gap was 43.8%. While women spent 30 hours a week on housework, childcare, caring for relatives or voluntary and honorary work, men managed just 21 hours. The difference in the gender employment gap, which measures labor force participation, is 9%. The Wiesbaden statisticians use the differences in earnings, working hours and labor force participation to calculate the labor market gender gap, which stagnated at 39% in 2023.

However, anyone who believes that it is only unfair in terms of basic salary is mistaken: the pay gap is even greater when it comes to bonus payments, as the Ifo Institute reports. The study of over 270 companies in three countries revealed that women in Germany receive an average of 6.1% less in bonuses, compared to 7.2% in Austria and 5.2% in Switzerland. However, if you take basic salary and bonus together, the pay gap for Germany is 3.0% in terms of total salary, compared to 2.9% in Austria and 1.6% in Switzerland.

Women still underrepresented in national parliaments

A look at international politics is also not very encouraging: women are still underrepresented in national parliaments. On a global average, just over a quarter of all members of parliament are female. Although this is progress compared to the 22.1% in 2014 or the 15.2% in 2004, the current proportion of women in the German Bundestag of 35.3% is only enough for 47th place out of 184. The frontrunner was the East African state of Rwanda with 61.3%. It is somewhat embarrassing that even a country like the United Arab Emirates, which is not necessarily considered to be women-friendly, has 50.0%.

And things don't look good at the top of companies either: It would take 81 years to achieve gender parity among CEOs of the world's most important listed companies if the trend continues. In 2023 alone, the 12.3% of new appointments of women were offset by 10% departures, both record figures.