A new report by the Organisation for Economic Co-operation and Development provides insight into the economic opportunities for men and women, and suggests policies to close the gender gap. It also, significantly, compares the pay divide between men and women across all rich countries.
A number of newspapers here in Germany have covered the news of this publication, owing to the country’s very poor ranking in the OECD’s study: of the organisation’s 34 members, Germany has the third widest gap between the salaries of men and women, and the widest when it comes to pension income.
Indeed, data collected for this research indicates that women earn on average 21.6% less than men. Only Japan and South Korea score more poorly in that regard.
The report also shows that in Germany 62% of women aged 25 to 54 work on an exclusively part-time basis. This figure is only 26% in neighbouring France. Moreover, unlike most other members of the OECD, Germany possesses no uniform statutory minimum wage, which means part-time and temporary workers can earn very low wages indeed.
Finally, and most alarmingly in the view of Germany’s major news media, female pensioners here earn on average half as much as their male counterparts. In no other rich country is the divide so large. In Europe specifically, it is just over that of Greece (48,2 %), and is also higher than in Great Britain (41,5), France and Portugal (38,7 each). Countries that are most frequently accused of nurturing a chauvinistic culture at home and work have comparatively greater gender equality: the gap in Spain and Italy is under 30%. Estonia performs best in this area, with a wage gap of only 3,6%.
Taking a closer look at these figures, one sees that this gender divide largely derives from the poor economic prospects of women with children. Germany scores highly among rich countries when it comes to the wage gap between childless men and women: the difference between the average salaries of both groups is of no more than 3%. Yet as soon as children enter the picture, women earnings plummet, with an average difference of 25%.
The OECD does note that the introduction of paternal leaves and higher financial aid for parents shows that Germany is on the right track. Yet some of the main causes for this poor state of affairs have not been addressed. In 2002, over a quarter of single mothers received welfare. In 2008, 43% of families headed by a single mother relied on welfare as their main source of income. This increase was a direct consequence of a new policy to take unemployment benefits away from those who had not worked for a significant period of time. Mothers were, quite naturally, most severely hit.
Viewed within a broader context, the OECD’s report reflects the impact of the global financial crisis on gender equality. According to a study published last August by UNAIDS, the United Nation’s Programme on HIV and AIDS, development goals for gender equality have been hindered world-wide by the economic gloom since 2008. Economic, political and health targets are not being met, and less money is being invested in bridging the gap between the living conditions of men and women.
In its comments on the German labour market as a whole, the OECD writes that Germany’s “response to the financial crisis of 2008-09 demonstrated the benefits of past labour market reforms, which raised work incentives, improved job matching and increased working hour flexibility. Going forward, the government should build on this success and address the remaining challenges which include raising the labour participation of females and older workers.” These statements highlight the dichotomy between the successes of the German economy, and the country’s comparative shortcomings in terms of social welfare. Many commentators here are arguing that both directly result from Germany’s reforms to remain internationally competitive, even as emerging markets are producing ever cheaper manufactured goods.
In a commentary published in the centre-left Süddeutsche Zeitung last week, Ulrike Heidenreich summarised this tension between the economic and the social: she forcefully writes that, “while economically Germany appears to be a model student, in things social it is a complete failure”. Not all agree with this negative assessment, yet there is a growing sense that economic success is being promoted at the expense of social benefits.