Germany: The gender pay gap will not disappear

Another year, another series of bad news for working women. In 2022, women in Germany remain at a disadvantage in the job market in many respects, according to a new study by the Düsseldorf-based Institute for Economic and Social Research. (WSI).

Coinciding with International Women’s Day, the study highlights working hours, income and lack of promotions as three major problems faced by working women today. The latest study also confirmed that gender inequality exists in almost all sectors of the country’s economy, albeit in different ways.

To reach these conclusions, the team analyzed the latest data published by the Federal Statistical Office and the Federal Employment Agency, covering 2021 and 2022. What they found may be surprising when considering the vast untapped potential and much-talked about skilled workforce . scarcity in the country.

The gender pay gap in Germany in numbers

Still, it’s always the gender pay gap, that is the difference in average gross earnings between men and women, that grabs the headlines.

In this case, the researchers estimated that in 2022 women in Germany earned 18% less on average compared to their male counterparts. Men earned an average of €24.36 ($25.94) gross per hour across all sectors, while women earned €20.05 ($21.35) per hour before tax.

The study went deeper and divided the workers into their different sectors. It found that although the female employment rate has increased in recent decades, many parts of the economy are still dominated by men. Mechanical engineering, construction, civil engineering and freight transport are particularly male-dominated areas. The service industry, on the other hand, has a much higher share of female employees. These include jobs such as healthcare, social services and teaching.

Of the 46 sectors investigated, the study found that in 45 of them women earned less than men. The gender pay gap based on specific sectors ranged from 4% in passenger and freight transport to 5% in social services, reaching 30% in healthcare and 32% in the legal and tax advisory industry. The only exception was the postal service. Here, the gross hourly wage for women is 2% higher than for men, although the base salary is quite low.

Looking at more than just the pay gap

The study looked at more than just paying. Women are disproportionately responsible for taking care of the home and children. It’s a complex question, but could this be the answer to why they earn less? The study took working hours into account and found large differences. Across all business sectors, men more often work full-time, which can lead to promotions and more experience.

Furthermore, there were more men in leadership positions than women. In 26 of the 34 industries for which data were available, women were less likely to hold managerial positions than men, according to the study. There were no significant gender differences in the seven sectors. The one area where women lead more is in the passenger and freight transport industry. Yet, in general, men make more management decisions than women.

The researchers noted that much needs to be done to enforce equal pay between men and women and suggest an equal opportunities law for the private sector that would oblige German companies to develop and implement equal opportunities strategies.

And Germany has a long way to go to achieve equal pay between men and women, as it has one of the biggest gender pay gaps in all of Europe. In 2021, it was only slightly better than Switzerland, Austria and Estonia. The European Union has not ignored the issue.

It’s not just a German problem

Last November, the European Commission calculated that, overall, in the EU, women earn 13% less than men, on average, for equal work. This means that for every €1 a man earns, a woman earns only 87 cents. That might not seem like a lot, but it can add up to about two months of annual salary.

The gap is narrowing, but over the past decade, it has changed by just 2.8% in Europe. There are also big differences between the various EU countries. To address these issues of the gender pay gap, the European Commission has introduced a series of directives on equal pay, pay transparency, work-life balance and introducing more women to company boards.

“Equal work deserves equal pay. This is a founding principle of the European Union. Addressing the injustice of the gender pay gap cannot happen without changing the structural imbalances in society”, Vera Jourova, Vice President of the European Securities and Exchange Commission Transparency , said in November 2022 on the occasion of the European Equal Pay Day.

Edited by: Uwe Hessler