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In powerhouse Germany, salaries for women lag behind

Inequality in pay between men and women remains high in Europe, and nowhere on the continent is the gender pay gap bigger than in Germany.

Inequality in pay between men and women remains high in Europe, and nowhere on the continent is the gender pay gap bigger than in Germany. The disparity has reinvigorated a debate in Germany and across Europe about how to bring working women into parity with men.

A new study by the Organization for Economic Cooperation and Development (OECD) published this week shows that, on average, German women working full-time earn 21.6 percent less than their male counterparts. The OECD median of 34 member states is 16 percent, with Norway at the top of the list. Women in the Scandinavian country get paid only 8.4 percent less than men. Even Greece, Europe’s economic problem child, has a much smaller pay gap than Germany at 9.6 percent.

There’s a variety of reasons for Germany’s position, according to Elke Holst, an expert on gender economics at the German Institute for Economic Research in Berlin. “Germany has a relatively high participation of women in the labor market. Many of the jobs taken up by women are low-pay, often part-time employments. In countries where the participation of women is low, mainly highly-skilled, well-paid women enter the job market.”

But it is also the German tax system which is to blame, says Dr. Holst. It favors couples which hew to traditional roles, with the man as the earner and the woman as the mother and housekeeper.

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Norway and Germany are at the opposite ends of another statistic, says the OECD: women in leading business positions. While Norway introduced a mandatory 40 percent quota for female representation on company boards in 2006, less than 4 percent of Germany’s top corporate jobs are held by women today.

German Labor Minister Ursula von der Leyen has been campaigning for a quota system like Norway’s for some time but failed to overcome the opposition of two critical female political figures: Chancellor Angela Merkel and Family Affairs Minister Kristina Schröder.

“There are tangible economic reasons for an appropriate share of women in leading positions,” Ms. von der Leyen told German daily Der Tagesspiegel. “If Europe wants to remain competitive it needs to tap into that resource.”

Chancellor Merkel and her family affairs minister prefer a voluntary commitment by industrial associations and companies. But such an agreement to raise the share of women in top positions to 30 percent in 2015, initiated last year by the EU, was signed across the whole of Europe by only 24 companies, with just one German business among them.

The discussion within the German government could be superseded by a European directive. EU Justice Commissioner Viviane Reding announced yesterday that she was starting a three-month debate on whether to make a quota mandatory, which could result in legislative action.

“I’m not a fan of quotas, but I like the results they bring,” Ms. Reding said in an interview with German newspaper Die Welt. The commissioner pointed to France, where the number of women in top jobs shot up from 11 to 22 percent after the introduction of a quota in 2011.

Spain, Italy, Belgium, the Netherlands and Iceland have also passed legislation to open up top positions for women.

The OECD holds Germany’s family policies responsible for the career disadvantages women experience, particularly the lack of child care facilities. Only 18 percent of German children aged two and under are looked after in a crèche or kindergarden, allowing their mothers to work during the day, while the OECD average is twice this number. 

“Instead of giving parents financial incentives to stay at home with their children, the German government should invest that money in child care facilities,” argue the authors of the OECD report.