Good morning, and welcome to the season 2 of the Economics newsletter by Les Glorieuses.
Every month, we will talk to you about the economy, gender and race, through an international lense, with the support of women researchers and the academic sphere. It is starting this Sunday, with a theme close to the heart of Les Glorieuses: the gender wage gap.
The 2020 campaign around this subject falls this year on #4Novembre16h16 – scroll down the email to sign the petition!
(click here to follow me on twitter and there for Instagram)
Vous pouvez lire la version française, #Economie, ici.
November, 8th, 2020 – reading time : 8 minutes
Flora* is 55 and married without children. In 1981, she was one of the few women to enrol in electrotechnical studies at the IUT (University Institute of Technology) in Nîmes, France. It was a “men’s” course, she says in the book Un Quart en Moins (A Quarter Less) by economist Rachel Silvera (2014). She remembers that when she applied for a job vacancy, the company responded: “is it for your son?”
In 1984, Flora was employed by a company called I., which specialised in the production of software and IT services. For almost 11 years, she spent 8 hours per day “looking for the sources of technical breakdowns, testing and pursuing progress through trial and error.” She loved her job. It “required a real expertise”, she says. She was constantly surrounded by men, but this didn’t intimidate her. She only asked for their help “to haul cables…but aside from this we did the same job,” she writes.
One day, Flora found a photo of the members of her graduation class recruited by I.: she noticed that all of them had been promoted except for…the women. She knew that this was illegal: equality of pay for men and women has been enshrined in law since 22 December 1972. Flora describes herself as “a bit of a loudmouth.” She didn’t want to stay silent. In 2001, she filed a case with the law. Victory! On 25 April 2005, the court condemned I. for gender-based discrimination and fined the company 110 000 euros, as well as requiring it to increase Flora’s monthly salary by 450 euros.
Flora is one of the first female employees to have won a case
against wage discrimination linked to a career. This story had a happy ending, but let’s be honest: it’s an exceptional case. We’re not all “loudmouths.” We don’t all have the energy, the strength, the time or the money to claim our rights. Legal procedures are exhausting. And the risk of making an enemy of your employer discourages more than one.
Convictions for gender-based discrimination are rare
The result: convictions for gender-based discrimination are rare even though this type of discrimination is a systemic problem. Despite the fact that certain measures have been put into place over the last few years to reduce the complexity of legal procedures, between 2013 and 2018 only 157 companies were convicted of wage discrimination. The problem is still present: according to a report by the European Trade Union Confederation (ETUC), in 2020 women in France are paid on average 15.5% less than men. And the country is barely making progress. In 10 years, this pay gap was only reduced by 0.1%.
According to the ETUC, at this rate France will achieve equal pay in… 1000 years!
As I hope to help end the patriarchy in my lifetime, I went on a Google search to find a solution that would make the law apply to everyone. My web wanderings took me to a volcanic island north of the Atlantic ocean: Iceland.
As well as being the film location of Game of Thrones, this country is also the champion of gender equality. It’s been at the top of the World Economic Forum (WEF) gender parity index ranking for the last 11 years, with a score of 0.88 against France’s 0.78.
But what is Iceland’s secret? The WEF reminds us that Iceland was the first country to elect a woman as Head of State by direct universal suffrage in 1980; that almost half of its deputies and company directors are women; that childcare is subsidised and that parental leave is equally distributed within couples.
But most of all, in the spring of 2017, Iceland promulgated a law that requires employers of more than 25 employees to prove that they meet the Equal Pay Standard. After verification by an independent body that a company provides “equal pay for equal work” for all its employees, it is awarded a certificate. If this is not the case, the company receives a fine of up to 50.000 Icelandic krona (274 GBP/ 357 USD) per day.
The Icelandic Women’s Rights Association (c) Juliette Rowland
In Iceland, employers are responsible for proving that they don’t discriminate against their employees
Ines Wagner, a German economist at the Institute for Social Research in Norway, studied the application of this law in order to evaluate the possibility of replicating it in other European countries. “It’s a truly innovative tool whose purpose is to radically change the situation, because this law shifts the burden of proof of equal pay onto the employers,” she observes.
“The law led HR and heads of departments to sit around a table and review salaries according to expertise, responsibility, effort and work environment…regardless of who does the job. Certain businesses discovered wage inequalities– linked to gender but also the origins of employees– that they weren’t even aware of, and had to correct them,” the researcher reports.
The implementation of the law was “intense” for certain companies, admits Ines Wagner, but generally their feedback was positive. “As well as putting their books in order, this law allowed for the opening of a discussion about gender inequality within businesses,” she says. “Women began to talk more about their salaries with managers. I think that the emergence of these exchanges between employers and employees is very interesting.”
For Ines Wagner, if a conclusion must be drawn from her research, it’s that “the negotiation of salaries between a manager and an employee is never a technical question, but always a social process.” Hence the need for transparency.
The secret: enforcing the law
While similar initiatives are seeing the light in several countries, the researcher believes that the Icelandic Equal Pay Standard is by far the most effective. “There’s a real duty of performance. The standard is not applied by an institution within the company, but by an external body trained for the purpose and which makes a decision based on the company’s results,” she explains.
The company is free to develop the salary policy of its choice, “but must be capable of showing and justifying to an external body how it establishes salaries,” she says.
In France, the framework is quite different. Since 2018, a law requires companies to evaluate gender pay inequalities according to an equality index based on 5 criteria and graded out of 100. If the grade is inferior to 75 out of 100, the companies must put into place a plan of action to improve their grade within three years. If they fail to do so, they will be fined up to 1% of their payroll.
But within this system, companies are graded…by themselves. On France Inter, a business manager, confided that it seemed easy to him to “cheat or round up the numbers to score higher than 75 points…It’s made even more easier due to the fact that there are no checks and that calculation details and documentary proof are not required.”
It’s therefore not surprising that business are showing excellent results. According to the Minister of Labour Elisabeth Borne, while 17% of companies with over 250 employees scored under 75/ 100 last year, only 4% of them do so today. Such progress! At the end of 2019, the average score of companies with over 1000 employees was 87/100. This index would have us believe that the problem of gender inequality in France is almost solved.
The equality index: “feminism washing”?
The index takes the form of a reading grid which companies are supposed to use to measure the pay gaps between employees by gender. The five criteria evaluated are: salary levels at comparable position and age (40 points), pay rises (20 points), promotions (15 points), pay rises upon return from maternity leave (15 points) and the proportion of women among the ten highest salaries in the company (10 points).
The compliance obligation entered into force in a phased manner. It first applied, from 1 March 2019, to companies with at least 1,000 employees. Then, from 1 September 2019, to those employing more than 250 employees. And finally, from 1 March 2020, to companies with 50 to 250 employees.
Rachel Silvera, economist, lecturer at Paris-Nanterre University and co-director of the MAGE research network (Labor Market and Gender), author of Un Quart en Moins. Women fight to end wage inequalities, La Découverte.
What are the limits of the index?
This index leaves room for numerous statistical biases. For example, the pay gap measurement (indicator 1) has a relevance threshold of 5%. So, when a company has, for example, an overall pay gap of 15%, it is allowed to lower it to 10%. And, according to the scale, with a 10% pay gap, the company can already score 20/40 points for this indicator. This is why, apart from a few companies which have been singled out by former minister Muriel Pénicaud (Derichebourg, Safran, Securitas France, Go Sport, etc.), most large companies got almost all their points in regard to equal pay. It is therefore not a good tool: on the contrary, it encourages companies to believe that they respect equal pay when this is not the case.
This tool only measures the pay gap for equal positions, which is estimated to be an average of 9%. Personally, I dispute this figure because it neutralizes other sources of inequality linked to working time, occupational segregation, the glass ceiling and glass walls. If we take these factors into account, then women are paid on average a quarter less than men. This figure demands a colossal plan of action: it calls for the fight against short-term part-time work, the revaluation of feminised jobs, etc. Moreover, the indicator only looks at women « up top »: the fourth indicator requires that there be at least 4 women among the ten highest salaries in the company (10 points). The index forgets the women “at the bottom”, even though it is they who will be impacted by the Covid-19 pandemic.
“Equal pay for equal work”?
Though the Icelanders’ system outperforms our own, they are nonetheless aware of the progress that still needs to be made. When I spoke to the Icelandic Women’s Rights Association, which has been campaigning for women’s equality in the country since 1907, its representatives warned me: “we’ve been at the head of the WEF index ranking for eleven years, but that doesn’t mean we have equality.”
Because equal pay for equal work hides other deeper inequalities: those that are the root of “unequal work.” Let me explain. If we calculate the average of net salaries received by women and men at the end of each month, the gap is even more dramatic: 28.7%, according to most recent Insee inquiry.
The reasons for this gap are documented: more women work part-time than men (which explains 40% of the gap) and are over-represented in lower paid sectors such as healthcare, retail and cleaning (which accounts for almost 67% of the gap). According to the French National Agency for the Improvement of Working Conditions (Anact), 7 out of 10 maintenance workers and 9 out of 10 nurses in France are women. As well as a “glass ceiling” there are also “glass walls.”
And these walls may grow thicker thanks to the Covid-19 crisis. Not only have women been more exposed to the virus, but they’ve lost more jobs than men have. “Among the women who were employed on 1 March in France,
only two out of three were still working two months later, compared to three out of four men,” states a report published in July by the French Institute for Demographic Studies.
The health crisis may cause the regression of equal pay standards
Economic recovery will probably not be enough for these women to re-enter the labour market. In the United States, while growth is beginning to return, 800 000 more women (including 324 000 latina women and 58 000 black women) stopped working “by choice” between August and September compared to 216 000 men, according to a study by the National Women’s Law Center quoted in the New York Times.
The explanation put forward by experts is that as the pandemic has greatly increased the burden of domestic work (children at home, loved ones ill, etc.), certain two-income households have decided it is best for one member of the couple to stop working. As as men are paid more than women, guess who stays at home? Mummy…
In any case, this is what the report by Lean In and McKinsey & Company – published in September– seems to confirm. It reveals that in the United States, one woman out of four plans to quit her job or reorient her career to work part-time or in a less demanding role, so as to be able to better balance professional and private life.
A feminist recovery plan
In order to avoid this regression when it comes to equal pay, the UN has put in place a “Global Gender Response Tracker” to evaluate the inclusion of measures to help women in Covid-19 responses. In France, 10 out of 31 measures address violence against women and 2 out of 31 attempt to alleviate domestic work– but none expressly deal with women’s financial security.
Faced with this damning picture, the Icelandic experience gives us a shred of hope as well as a source of inspiration: it seems that the crisis might also give us an opportunity to change the game. Iceland’s former Minister of Social Affairs and Equality, Þorsteinn Víglundsson, who was responsible for the law of 2017, explains that the 2008 financial crisis played a key role in putting gender equality on the agenda.
“We haven’t always been the champions of equality,” he says. “After the financial crisis, there was a general awakening in Iceland. The country was hit so hard by the crisis that society felt the need to reform the whole system. One of the main demands was that greater participation of women in positions of power was necessary to change the country.”
What if women are the renewal?
It was therefore women who brought renewal. In 2009, for the first time, the role of Prime Minister and more than 43% of seats in parliament went to women. Three years later, the Equal Pay Standard was adopted by unions and employers’ organisations on a voluntary basis. Then in 2017, the Reform Party was elected for the first time with the political priority of making that standard compulsory. Today, a committee is discussing how to make the remuneration of feminised and masculinised industries more equal.
Each context is different, says the former minister, but if one lesson can be learned from the Icelandic experience, it’s that “to close the gap between men and women, this objective must be placed as a priority on the political agenda.” In France, this could begin with the implementation of a post-Covid-19 feminist recovery plan.
The Icelandic Equal Pay Standard
Ignes Wagner, researcher on issues related to equality, integration and migration at the Institute for Social Research in Oslo, Norway
How did this law come about?
The Equal Pay Standard began to be discussed before the 2008 crisis by unions and employers’ associations following the observation that 60 years after the ban on pay inequalities between men and women by Icelandic law, the gap had still not been filled. They therefore decided to develop a new management tool, based on an important premise: it would be a tool used on a voluntary basis. Then the financial shock of 2008, which hit Iceland hard, was a game-changer. Part of the blame for the crisis has been attributed to the toxic masculinity of the financial sector. This context favoured the emergence of a new party, the Reform Party, which won the elections in 2017 with the priority of fighting against inequalities between men and women, and making the Equal Pay Standard, which was still in the pilot phase, mandatory.
How is the Equal Pay Standard applied?
It is modelled on other environmental or safety management standards, for example, that HR departments are used to putting in place. The Equal Pay Standard requires that companies or institutions employing 25 or more full-time employees undergo an external certification process each year to verify that they do not discriminate against their employees.
The application of the standard was done in two stages. First, HR departments created focus groups within companies to review salaries based on four main criteria: expertise, responsibility, effort and working environment. For example, some job titles, such as “representative”, were abused to overvalue salaries. This first step required that the tasks of each position be better defined. Secondly, the salary could be adjusted according to other assets linked to the employee’s profile, such as education, skills, experience and languages.
Once companies have finalized their salary policies, an external accreditation body inspects their books. If they believe the company meets the standard, then an Equal Pay Certificate is issued. If unjustified inequalities are identified, then the company can be sanctioned with a fine of 400 euros per day.
What are the benefits of this law?
The standard makes three positive changes. The first is that it reverses the burden of proof. Before this law, it was up to the employee to prove that he was not being paid fairly, and to denounce his employer. It is now up to the employer to prove that they pay equal wages to the men and women in their company.
Secondly, the enforcement of the law is also an improvement over what is done in other countries because it has real enforcement power. Several countries such as Norway, Sweden, Canada and the United Kingdom have put in place systems encouraging companies to be more transparent with regard to their salary policies. However, there is not necessarily a follow-up of the actions taken to close the pay gap. This is different in Iceland: an external body trained for this purpose ensures that the law is effectively enforced. It decides on the basis of results, and not on a declarative principle.
Finally, this law creates transparency in the company’s books. At first, companies found the enforcement process to be intense and were not very supportive of it. But then they realized that it allowed them to put their books in order and identify discrimination of which they were not necessarily aware, discrimination linked to gender, but also to origin, to skin colour, etc.
Is this law the solution to pay inequalities?
The law has made progress, but that does not mean that it has solved the problem of pay inequalities. This law addresses equal pay for equal work, but not the pay gap between the different feminised and masculinised sectors. The issue of male predominance in leadership positions is also not addressed. On the other hand, I have in mind the case of an institution which, following discussions on wage inequality conducted by the law, began to think about putting in place means to attract women to positions that are predominantly male, and vice versa. The law has therefore opened discussions on further possible initiatives, which is very important.
SIGN THE PETITION The gender wage gap campaign is finally out. In 2020, the date from which women start working for free due to the differences in salary between men and women falls on the #4Novembre16h16. We need to be loud about this, and ask the Government to finally take actions: this recovery plan needs to be a feminist one.
Sign the petition here :
SHARE THE HASHTAG #4novembre16h16 At this rate, we won’t be living to see professional equality between men and women. Share our visuals, create your own, show us your talents (we know you are all undercover artists)… Make this campaign yours around the hashtag #4Novembre16h16
MESSAGE FROM OUR PARTNER
For more than a hundred years, L’Oréal has been dedicated to beauty professions. With an international portfolio of 34 brands, the group managed to achieve a turnover of 29,9 billion euros in 2019 and has more than 88 000 collaborators around the globe.
L’Oréal is an all time leader regarding professional equality. In 2019, women represented 70 % of the total workforce, 53 % of the members of our board of directors, 30 % of the members of our executive committee and 54 % of strategic
In 2019, L’Oréal has been ranked in the “TOP 5 Worldwide” by Equileap, first database to rank 3 500 businesses listed in the stock exchange. The group is also named in the Bloomberg Gender-Equality Index 2020, which values businesses engaged in professional equality.