‘How much do you earn?’ New law tackles gender pay gap

It's one of the last great taboos: asking a colleague how much they earn. But Germany is hoping workers will do just that under a new law that aims to close the country's yawning gender pay gap.

'How much do you earn?' New law tackles gender pay gap
A female manager in Berlin. Photo: DPA

The legislation, which came into effect in Europe's top economy on January 6th, gives an employee the right to know how their salary compares with that of colleagues of the opposite sex doing similar work.

“Other people's salaries are still a taboo subject and a black box in Germany,” said acting Women's Affairs Minister Katarina Barley whose Social Democratic Party championed the law.

The hope is that more transparency will reveal whether women are paid less than male peers — and bolster their demands for a rise or pave the way for possible legal action.

The new regulations however only apply to companies with more than 200 employees — leaving women in small firms in the dark about their colleagues' pay slips.

Businesses with over 500 staff members will additionally be required to publish regular updates on salary structures to show they are complying with equal pay rules.

Supporters say the legislation is a good starting point, and hope women across the country will seize the opportunity to shed light on wage inequality.

“It's like sending up a rocket flare to see what exactly is going on in our companies,” said Uta Zech, president of the German branch of the Business and Professional Women (BPW) campaign group.

But the legislation has already faced a torrent of criticism, with detractors saying it is too complicated, lacks teeth and will foster workplace animosity.

21 percent

Photo: DPA

The law comes at a time when equality between the sexes is dominating public debate.

Zech said the discussion is particularly welcome in Germany, which has one of the European Union's biggest gender wage gaps.

Women here earned around 21 percent less than men in 2016, according to official data, worse than the EU average of around 16 percent.

In part, this is because women in Germany tend more often to work in low-paid jobs or part time.

For women with the same qualifications doing the same work as men, the pay gap stands at around six percent.

“We are a rich country. Why can't we achieve salary equality?” asked Zech.

'Paper tiger'

But Germany's pay slip transparency doesn't mean human resources will reveal exactly how much the person in the next cubicle makes.

Instead, an employee can only find out what the median salary is of at least six colleagues in comparable jobs.

Here, critics say the devil is in the detail. If, for example, three men each earn €1,500 ($1,800), €1,500 and €3,000 a month, their average salary would be €2,000.

But the median pay — or the number in the middle of the line-up — is just €1,500.

“This figure is meaningless,” said Gregor Thuesing, a labour law professor.

Opponents say it is also too easy for bosses to come up with excuses to justify wage differences.

“An employer can wriggle out of it by saying 'But Mr Maier bears more responsibilities' or 'Mr Schmidt has more client contacts',” Spiegel Online journalist Verena Töpper wrote.

“The law is a paper tiger. It won't change anything.”

She cited the high-profile example of Birte Meier, a reporter for public broadcaster ZDF who took her boss to court after learning that a male colleague's net income was bigger than her gross salary.

The judge last year threw out her discrimination claim, ruling that the colleague had simply “negotiated better”. “It's called capitalism,” he said.

Some critics warn that the new law will stoke resentment, pointing to studies that show workers reporting lower job satisfaction once they find out they earn less than their peers.

“The right to demand salary information will foster workplace envy and discontent,” conservative lawmaker Christian von Stetten told Die Welt daily when the law was passed last July.

World first

Other European countries have recently taken similar steps to lift the lid on salary secrecy — with a bit more bite.

Last year, Britain ordered firms of over 250 employees to publish details of their gender pay gap by April — with sanctions an option if companies refuse to comply.

And Iceland this year enacted a law that requires firms with more than 25 staff to prove they are paying men and women the same for doing the same work — the first country in the world to do so.


Just how liberal is Germany anyway?

For Brits who voted "remain" and are now looking to move to a more liberal European country, Germany may not in fact be for you, says a new report.

Just how liberal is Germany anyway?
Image: MoveHub

A new ranking by MoveHub, which lists countries around the world in order of how liberal they are, places Germany at 13th globally – a bit more liberal than Latvia and Australia, but not as liberal as the UK, Canada or Portugal.

“If you, like so many people in Trump’s America or post-Brexit Britain feel disconnected from your fellow countrymen and unsure about your future in your current country of residence and want to consider your options, do not worry, because MoveHub has compiled a list of the most liberal countries you could move to in 2017,” the report states at the start.

MoveHub, a website that helps people move abroad, used data from the World Economic Forum’s Global Gender Gap Report 2016, the 2016 Social Progress Index report and Yale’s Environmental Performance Index 2016. They then ranked countries based on factors such as gender equality, the rights of minorities, personal safety and environmental factors such as soil, air and water quality.

Iceland came in as the most liberal location, followed by Finland, Sweden, Norway and New Zealand.

Image: MoveHub

The least liberal countries were Chad, Pakistan, Iran, Mali and Yemen.

While Germany fell into the top 15 countries worldwide for liberalism, the country's traditional parties have been upset over the past year by the sudden success of the far-right Alternative for Germany (AfD), which won seats in various state parliaments last year – including the typically left-leaning capital, Berlin.

The AfD is currently polling at around 15 percent nationally, and has gained much of its success based on its anti-immigrant rhetoric amid the large number of refugees arriving in the country.

In the gender gap report, Germany came in 13th place – perhaps surprisingly behind Burundi as well as countries like Nicaragua, Slovenia, the Philippines and Rwanda. A major part of this was because it was ranked so low (57th place) for women's economic participation and opportunities, as well as for health and survival. Germany was in fact ranked 100th for women's educational attainment.

Germany has one of the widest pay gaps in Europe, ranking only above seven other countries in an Expert Market report released in October. Women earn 21.6 percent less than men in Germany – which is a wider margin  than the European average of 16.5 percent, according to 2015 government data.

The discrepancy is in part down to the fact that women in Germany tend more often to work in low-paid jobs or sectors, or only part time.

But the country has passed legislation in recent years, hoping to shrink the gap through a wage transparency law, and a so-called “women's quota” for high level positions at big businesses.

In the social progress index – which examines countries abilities to meet basic human needs, provide foundations for well-being and create opportunities – Germany ranked 15th place, ahead of Belgium and France, but below Japan and Austria. This index noted that Germany fell behind due to its restrictions on freedom of speech and assembly, as well as for tolerance and inclusion.

The environmental index ranked Germany at 30th place, below Hungary and above Azerbaijan and Russia. 

“I was most surprised at its ranking for the Environmental Progress Index at number 30, as I'd read recently that almost 100 percent of Germany's power had come from renewable energy in 2016,” Harriet Cann of MoveHub told The Local.

The environmental report explained that while Germany was known for having historically good environmental records, its ranking fell due to the report placing more emphasis on air quality, and because it was outperformed by countries that had shown greater improvements.