What sparked the wage gap debate

Why women earn less than men

The wage gap between women and men persists. However, the figures collected for this have met with criticism. It is controversial to what extent this is actually a matter of wage discrimination.

There is no wage discrimination in classical economic theory. In the ideal case, wage differences reflect different performance or the productivity of the employees. If women were cheaper than equally well qualified men, the demand for them would be so great that they would quickly become more expensive - at least as long as the labor markets are competitively organized.

Important variables are missing

In practice, however, there is a not inconsiderable gap between women's and men's wages (see text box). The extent to which the statistically unjustified difference in salary is discrimination is, however, controversial. One recently commissioned by the employers' association from the University of Bern and the consulting company B, S, S. The study carried out complained that not all of the factors that are decisive for a person's wage level were queried. The employers' association is thus strengthened in its view that the unexplained wage difference is “just a difference” that could possibly be resolved by other criteria that were not taken into account.

A deficiency in the figures from the Federal Statistical Office (BfS) is that the age and years of service of the wage earners are included in the survey to record effective professional experience, but not career breaks. Neglecting this factor is likely to contribute to the unexplained wage gap being overestimated, as women are more likely to take a career break to attend to family responsibilities. The BfS is aware of this shortcoming. However, it is pointed out that not only interruptions such as maternity leave are not included, but also military absences or sabbaticals. It is difficult to define which absence (duration) is a statistically relevant professional interruption, explains Didier Froidevaux from the BfS. Important information such as the course of study, second training, further training or language skills are also missing from the BfS survey.

All of this has also triggered criticism and activity in politics. The discussion has intensified since Justice Minister Simonetta Sommaruga declared the voluntary equal pay dialogue to have failed last November and promised binding wage controls. For example, National Councilor Ruedi Noser spoke out in a motion in favor of reviewing the analysis of wage discrimination, taking into account additional indicators for wage differentials and examining alternative calculation methods. In its response, the Federal Council declared that it was ready to “ensure transparency about the methodology used”. A study is currently being carried out under the leadership of the Federal Equal Opportunities Office, which is intended to clarify to what extent additional variables could explain the wage difference. At the same time, the Federal Council notes that the method used, the so-called regression analysis, is internationally recognized (Eurostat, OECD) and was determined by the social partners as part of the dialogue on equal pay. In addition, the variables taken into account correspond to the current state of science.

The BfS economists are therefore in a bind. On the one hand, they want to capture as many variables as possible in order to track down the phenomenon of the wage gap. On the other hand, one wants to rely on data that is as reliable as possible, the collection of which does not burden the company too much. Froidevaux does not want to rule out that certain factors are missing. He doubts, however, that this would lead to fundamentally new insights and that there would be significant changes in the wage gap.

Nevertheless, it must be questioned that factors such as employment interruptions or the level of employment, which is also not recorded by the BfS, have no influence on salaries. The fact that women often work part-time explains - in addition to career breaks - a not inconsiderable part of the wage difference: Most studies confirm that part-time jobs or less attendance and work, regardless of gender, result in lower wage growth and poorer career prospects (NZZ from May 13th 15).

However, the suspicion arises that this is not primarily a reward for performance, ability and productivity, but above all for attendance times. However, career breaks and part-time work are only responsible for part of the wage discrepancy. One indication of this is that women already earn less than their male colleagues when they start working life - i.e. at the time when wage-relevant factors such as part-time work or work experience are not yet significant. Based on a survey by the National Research Program “Gender Equality”, the statistically inexplicable difference in wages when starting a career is 7%.

The fact that women are less career-oriented and therefore also have lower wage expectations is doubtful - at least for the younger generation. According to a recent survey of 1000 men and women of different age groups and hierarchical levels in the USA carried out by the consulting firm Bain & Company, 43% of the women surveyed plan to move up to top management when they start their careers - significantly more than their male colleagues (34%). But after five years in the job, only 16% of female employees have ambitions to climb the top management level, while the corresponding proportion for men is stable at 34%. In the judgment of the Bain authors, it is not marriage and family that slow down women in their will to rise. The decisive factors are factors such as the prevailing stereotypical image of the always available employee, a lack of support from direct superiors and hardly any female role models in top management.

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Motivation would be there

The claim that women are generally less career-oriented and more family-oriented cannot be scientifically proven. Anyone who argues with flexibility, willingness to work and motivation must rely on appropriate evidence, says Alfonso Sousa-Poza, economics professor at the University of Hohenheim. However, social psychological studies have shown that there are basically no wage-relevant behavioral differences between the sexes.

Probably the most likely evidence is that women are less brisk and aggressive in wage negotiations than their male colleagues. If this factor - in addition to professional interruptions and part-time work - should actually be decisive for the wage difference, it would be time for employers to go over the books. If employees - whether male or female - receive less wages for the same performance, this neither promotes the working atmosphere nor the motivation of those affected.

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