Germany's gender pay gap just won't go away

Another year, another batch of bad news for working women. In 2022, women in Germany continued to be at a disadvantage in the labor market in many respects, according to a new study from the Düsseldorf-based Institute of Economic and Social Research .

Coinciding with International Women's Day, the study highlights working hours, income and the lack of promotions as three big issues facing working women today. The latest study also confirmed that gender inequality exists across nearly all sectors of the country's economy, albeit in different ways.

To come to these conclusions the team looked at the latest data published by the Federal Statistical Office and the Federal Employment Agency, which covered 2021 and 2022. What they found may be surprising when considering the big untapped potential and the much talked about skilled-labor shortage in the country.

German gender pay gap in numbers

Still, it is always the gender pay gap, which is the difference in average gross earnings between men and women, that makes headlines.

In this case, the researchers estimated that in 2022 women in Germany earned 18% less on average compared with their male counterparts. Men made an average of €24.36 ($25.94) gross per hour across all sectors, while women earned €20.05 ($21.35) per hour before taxes. 

The study looked deeper and divided workers into their different sectors. It found that though the female employment rate has risen in recent decades, many parts of the economy are still male-dominated. Those sectors include mechanical engineering, construction, civil engineering and freight transport. The service industry, on the other hand, has a much higher portion of female employees. These include jobs in areas like health care, social services and teaching.

Of the 46 sectors investigated, the study found that in 45 of them, women earned less than men. The gender pay gap based on specific industries ranged from 4% in passenger and freight transport to 5% in social services, all the way up to 30% in health care and 32% in the legal and tax advice industry. The only exception was the postal service. Here, the gross hourly wage for women is 2% more than for men, though the base pay is quite low.

Looking at more than just the pay gap

The study looked at more than just pay. Women are disproportionately responsible for running the household and child care. It is a complex issue, but can this really be the answer to why they earn less? The study took working hours into consideration and found big differences. Across all business sectors, men worked more often in a full-time capacity, which can lead to promotions and more experience.

Additionally, more men were in leadership positions than women. In 26 out of 34 sectors for which data was available, women were less likely to hold managerial positions than men, the study found. There were no significant gender differences in the seven sectors. The only area where women led more is in the passenger and freight transport industry. Still, in general, men make more management decisions than women. 

The researchers noted that a lot needs to be done to enforce gender pay equality, and suggested an equal opportunity law for the private sector that would oblige German companies to develop and implement equal opportunity strategies.

And Germany has a long way to go to achieve gender pay equality, since it has one of the largest gender pay gaps in all of Europe. In 2021, it was only slightly better than Switzerland, Austria and Estonia. The European Union has not been ignoring the issue.

It's not just a German problem

Last November, the European Commission calculated that overall in the EU women are paid 13% less than men on average for an equal job. This means that for every €1 a man earns, a woman will only earn 87 cents. That may not sound like a lot, but it can add up to around two months of a yearly salary.

The gap is closing, but over the past decade, it has only changed by 2.8% in Europe. There are also big differences between various EU countries. The get a handle on these gender pay gap problems the European Commission has introduced a number of directives on equal pay, pay transparency, work-life balance and introducing more women to company boards. 

"Equal work deserves equal pay. This is a founding principle of the European Union. Solving the injustice of the gender pay gap cannot come without change to the structural imbalances in society," Vera Jourova, vice president of the European Commission for Values and Transparency, said in November 2022 on the occasion of European Equal Pay Day.

Edited by: Uwe Hessler

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