Equal Pay

Promoting equal pay is important

Equality in pay between men and women and the objective of same pay for the same job and for work of equal value are generally accepted principles.  They have been recorded in many international United Nations, International Labour Organisation, European Economic Community and European Union’s agreements and national legislation and agreements which apply to Finland. Despite this, Finland is not a country of equality in pay.

There has been a long struggle to narrow the pay difference between men and women. The reasons for the difference in pay are many and the measures taken so far have not been sufficiently effective to narrow the gap. The size of the average female earnings in relation to the average male earnings has remained at the approximately 80 % level which weakens the livelihood of women not only when they are of working age but also after it when they are retired. International examples from Sweden and Iceland indicate, however, that it is possible to achieve a lot in terms of equal pay.

In Finland, an equal pay programme (the Sampa programme) was initiated in 2005, the aim of which is to decrease women’s difference in pay in comparison to men’s pay from 19 per cent to 15 per cent by the year 2015.  According to the follow-up survey of the programme, the average difference in pay has narrowed only by one percentage point in 2006-2009, which is not sufficient to attain the programme objective.  At this pace, correcting the gender pay difference will take more than 50 years.

There government sector has progressed better than the private sector

The Federation for Salaried Employees Pardia has promoted equal pay persistently when safeguarding interests by including local equal pay allowances in agreements and by encouraging workplaces to take up planning for equality and to carry out comprehensive pay surveys. The work has progressed step by step. According to the follow-up of the Sampa programme, the government sector managed to narrow the pay difference more than the generally in 2006-2009. In the government sector the pay difference decreased by two percentage points.

According to the follow-up report of the Sampa programme, the pay difference was decreased by the agreed collective agreements, implementation of new pay systems, drawing up of equality plans and carrying out pay surveys and the advancement of female careers. Inequality in pay is upheld by rigid division of work into female and male jobs and accumulation of family leave and fixed term employment to women.

Currently Pardia is concerned about the end of the comprehensive income policy agreements, which may result in increasing the pay difference if the pay in the female-dominated public sector again starts to lag behind the male-dominated private sector wages and salaries. Equal and non-discriminative pay continue to be at the centre of Pardia’s agreement and pay policies. The recently concluded government sector collective agreement included, as demanded by Pardia, a 0.2 per cent equality allowance which promotes equal pay.

However, the official agreement is not enough to promote equal pay on its own. It is possible to achieve a lot at individual workplaces. Participation and commitment to promoting equality and equal pay by both the employees and the employer are now needed. This is why Pardia campaigns for equal pay on the Equal Pay campaign day on 3 March 2011. We are after a common attitude and willingness to defeat inequality in pay!

What are the reasons for differences in pay? 

The reason for difference in pay is segregation i.e. the division of the labour market into women’s and men’s job but also different workplace practices regarding same duties contribute to it.

Branches and collective agreements and professions and duties are divided by gender. Women and men do different jobs (horizontal segregation) and duties at different levels of the hierarchy (vertical segregation).  Female careers are slowed down by, among other things, fixed term employment and the use of family leave. Often low wages and salaries can be explained by the female-domination of the field or the profession: women’s jobs are not equally respected and valued.

Men work more often than women in the private sector. The reasons for men’s better wages and salaries include the employers’ ability to pay more, different financial basis, established market levels of wages and salaries in different professions (engineer vs. nurse) and the paying of performance bonuses and profit-related bonuses. The public sector being financed by taxes and the difficulty in showing productivity must not be obstacles to a fair and competitive pay.

At the moment there are 200 different collective agreements, which are applied to different sectors, branches, employees and lower and higher level salaried employees in different ways. The branch and profession explain 80 – 95 per cent of the internal pay difference in the municipal sector, 40-50 percent in the private and government sector.

The socioeconomic status of the income earner does count. Among wage earners the pay difference is above all a question of difference between men and female dominated fields. Among salaried employees, an individual’s position in the hierarchy of the organisation has a bigger impact. In addition to this, especially in specialist duties, differences in pay may be considerable.

Following the implementation of the government sector pay systems in 2001-2044, the pay difference between men and women is largely explained by the fact that women work more often than men in less demanding jobs (Huuhtanen et al, 2005). Lower pay components of personal performance often relate to lower job grade, although job grade and individual performance should be considered separately.

In addition to structural reasons, pay differences are created in the everyday practices at workplaces, for example when dividing duties between men and women, in the principles for rewarding for them (different allowances, perks and other bonuses) and in the decisions relating to pay concerning individual employees. Further, family leaves which are taken more often by women weaken equality in pay. This means gaps in career and short-term absences from work. Their careers, advancing to more demanding duties and increases in income lag behind men.

What could be done for equal pay? 

In the long term, the dismantling of segregation and promoting female careers are central objectives in the Sampa programme, as are the reducing the amount of fixed-term employment and diminishing its effects in relation to pay. More equal division of family leaves and obligations relating to family between the parents will also help equal pay. The corporate social responsibility programmes of companies and other organisations should include the viewpoint of gender equality and equal pay.

As the most concrete measures, the Sampa programme highlights the role of the labour organisations in narrowing pay differences in pay and agreement policies. They are involved in developing pay systems and pay statistics to support equal pay. The central labour market organisations have already recommended that the gender impact of the collective agreements be evaluated and that good examples are gathered from equality plans.

It is essential at the workplace level that equality plans and pay surveys relating to them are drawn up  in connection with co-operation activities without delay. It is also important to produce pay surveys more effectively so that with their help the factors contributing to pay differences can be analyzed better than now.

Measures taken at different levels support each other. We are all needed to promote equal pay!