The gender pay gap is closing, but there’s still a long way to go

Women earn 77 cents for every dollar men earn for work of equal value, are more likely to be unemployed, and make up over two thirds of people without a regular pension.  

These statistics from the UN are a stark reminder of why International Equal Pay Day, held on September 18 every year, is necessary.  

And while international days shine a light on global injustices, some practices are so ingrained in the cultural psyche that it takes rigorously enforced legal frameworks to turn the tide. 

Seventy years of promises

Equal pay for equal work is one of the European Union’s founding principles, enshrined as Article 119 in the 1957 Treaty of Rome. The current legal provision is in Article 157 of the Treaty of the Functioning of the European Union (TFEU). 

So it may be a surprise to learn that in 2023, women in the EU still earn an average of 13 per cent less than men. In March, the European Parliament passed new legislation to reduce this gap. The Pay Transparency Directive gives workers rights and protections that aim to remove the secrecy that allows gender pay disparity to flourish. 

“This legislation makes it crystal clear that we do not accept any kind of gender pay discrimination in the EU,” said Kira Marie Peter-Hansen, vice chair of the Parliament. “Historically, women’s work has been undervalued and underpaid, and with this directive we take an important step to secure equal pay for work of equal value.” 

Women in the EU still earn an average of 13 per cent less than men

With ‘equal pay for work of equal value’ being enshrined in European treaties for almost 70 years, what’s going to be different this time? 

Spotlight on employers

“Implementation and enforcement of this principle have long been challenging,” the European Council acknowledges. “This is in part because pay discrimination often goes undetected due to a lack of pay transparency, meaning that victims are prevented from bringing claims.” 

The first reporting requirements under the directive will come into force in June 2027, when employers of more than 250 people will have to submit the first of their annual reports. Organizations employing between 150 and 249 people have the same deadline, followed by submissions every three years. Employers of 100 to 149 workers have until June 2031 to submit the first of their three-yearly reports. 

The rules will also make it compulsory for employers to inform job seekers about the starting salary or pay range of advertised positions, prevent them from asking candidates about pay history, and give workers the right to request information about pay broken down by gender. 

For discrimination cases, the burden of proof will move from employee to employer and remedies will allow for compensation including back pay and related bonuses.  

Slow progress

It's progress, but it’s slow, and women remain disillusioned — particularly those in senior leadership positions. 

“Progress tends to fade when the spotlight is put on high-ranking positions, especially in the business world,” say Eugenia Bieto, director of the Esade Women Initiative, and Patricia Cauqui, academic director at Esade. 

“At present, 83.9 per cent of female managers believe they are not treated equally to men, while almost half of them consider that the equality plans designed to correct this situation are not having the effect they hoped for.” 

Half of female managers have not noted any change since equality plans are in place in their companies

Speaking at the release of Esade’s 2023 Gender Monitor, which surveyed 1000 Spanish women aged between 40 and 59, they continued: “At present, 76.5 per cent of the companies where the women surveyed work have an equality plan in place.  

“However, nearly half of those interviewed have not noted any change since it was applied in their company.” 

Personal barriers

The report also revealed that only one in five companies who took part in the survey had a female CEO, with executives citing the main barriers to career progression as unconscious bias (44.7%), difficulties in achieving a work-life-family balance (29.6%), and the lack of acknowledgment regarding the work they do (23.2%).  

Over half of the women surveyed (64.65%) cited the lack of informal, professional and personal support networks as hindering career progress. Two thirds said they don’t have time to build networks as a result of too many personal commitments.  

The survey was conducted shortly after Spain introduced new equality laws and, despite some misgivings, Bieto and Cauqui are cautiously optimistic that the new legislation will bring positive changes.  

Spain’s roadmap for equality

The Third Strategic Plan for Effective Equality between Women and Men 2022-2025 came into force in March 2022. Minister for Equality Irene Montero said the plan was "the government's roadmap, and therefore that of all public administrations, to deploy equality policies.” 

The plan has four pillars: good governance for a more inclusive and democratic model of government; economy for life and the fair distribution of wealth against the feminization of poverty; lives free of male violence for women; and ensuring women can effectively exercise rights in all areas of life. 

In March of this year, the Spanish government went further in its commitment to ensuring gender equality for women at work. The draft Equal Representation law requires women to make up at least 40 per cent of the management of listed companies over a certain size, political parties must put forward equal numbers of male and female candidates during elections, and professional associations should have at least 40 per cent women on their boards. 

Commit to change

In Esade’s Gender Monitor report, six out of ten respondents were in favor of such quotas. But while enforced equality is better than no equality, most women simply want to be accepted on a level playing field. 

“The change that respondents want most is the normalization of what a person can do, regardless of their gender,” say Bieto and Cauqui.  

“The starting point for equality, diversity and inclusion lies in a profound cultural change which will not take root across an organization without a clear, sustained commitment from senior management.”