When I was still working in the diplomatic service, my more experienced colleagues warned me that religion, politics and money should not be discussed at the table. I would also add – about women. Talks about women’s equality – pay and the situation in the labor market – risk “blowing up” any social discussion. But it needs to be talked about, and not only on March 8. We still have a lot of homework to do in women’s economic empowerment. We all live in our own ‘bubbles’ so numbers and facts can help.
Anti-recordist
In the field of gender equality in the European Union (EU), we are well below the average[1]. But in 2020, we set an “anti-record” with a 22.3% wage difference – we were in 1st place in the EU[2]. A year later, thanks to state support mechanisms Covid-19 to mitigate the consequences, we improved the indicator to 14.6%, but the result is still not satisfactory. This means that instead of one euro, women receive 85 cents, or in fact almost two months of free work per year. Are we satisfied with this situation? No.
An active woman in top positions means more innovation and better profit performance for business. The economic well-being of the country also increases if the economic activity potential of all people is used. A more financially secure and independent woman also means a more prosperous family.
However, the issue of women’s pay is much more complex. Unfortunately, there is a huge segregation of professions in Latvia, or division into “female” and “male” professions. Here, too, we hold the EU’s “anti-record”[3]. For example, with a huge proportion of women in the fields of medicine and education, which are not adequately paid.
But – even if women choose more “paying” industries, the pay gap only widens. In the financial, insurance and IT sectors, even up to 35%. The explanation lies in the so-called “glass ceiling” – women are well represented in mid-level management, but much less in more generously paid positions on boards and councils. Lursoft data show that only a quarter of TOP 500 companies are women and only 160 companies have at least one of the board members a woman.
Someone would say, “Where’s the problem, go and apply!” But again, this is an oversimplified solution to a complex problem.
I will eat stereotypes
One explanation must be ingrained stereotypes. There is still an opinion in society that a man is the “mammoth provider” and a woman is the “heater of the hearth”. In accordance with Innovator Baltic Gender Equality Barometer 2022 data, 29% of respondents believe that a man should earn more, but one in three thinks that a woman’s main role is to take care of the home and family, which is not a paid job.
So a woman has to overcome this barrier of an attitude of denial, and it is not always easy. For example, it can manifest itself in family conversations, where hints are expressed about insufficient time devoted to family life, or in conflicts with the husband, who, on the other hand, finds it difficult to live with the idea that the wife earns more.
Stereotypes can also manifest themselves in the candidate’s choice in favor of a man, assuming that the man will be able to devote more time to work duties, including business trips, overtime, business development negotiations outside of working hours.
Unfortunately, women also underestimate themselves. Organizations innovative the survey shows that women’s expectations regarding the desired salary are much more modest than men’s and there is a difference of almost 200 euros. Self-criticism is also manifested in job interviews, where a woman focuses on her CV, while a man focuses on his potential. Men are more confident in themselves and more often believe that they have leadership, the ability to manage processes, set goals, lead a team to achieve them, and solve problems. At the same time, when evaluating their real-life bosses, the survey shows that both genders equally possess the qualities necessary for a leader. In addition, female managers are more likely to provide feedback and promote employee growth.
The impact of childcare leave (who invented the term “vacation”?) on a woman’s financial situation cannot be underestimated, when a woman drops out of the labor market even for several years and, even after returning to the office, still works a second, unpaid shift at home. Especially during the pandemic, there was a trend around the world where many women had to choose between career development and home care, and were forced to choose the latter.
Unfortunately, the prevailing stereotypes in society, the underestimation of one’s work and abilities, as well as women’s unpaid work at home have an impact on well-being in the long term as well. Lower income means lower pension in the future. In addition, it should be taken into account that the life expectancy of women is almost 10 years longer than that of men.
Everyone suffers from the pay gap – both men, who are burdened with the enormous burden of providing for their families, and women, who would very much like to, but do not dare to realize their dream of professional development.
Over the last 100 years, the situation has of course changed in a positive direction and, for example, the World Economic Forum has calculated that even if we did nothing in particular, full gender equality in the world would be achieved in 136 years[4]. Are we ready to wait that long? No. Our survey also shows that 93% of the population in the Baltics consider gender equality an important value. This is a good basis for changing the situation.
What solutions?
First of all, this process should be stimulated with the help of legislation, for example, by introducing the transparency of remuneration and bonuses, which has already existed in the public administration for several years, or by determining the proportional representation of women in the boards and councils of state capital companies. Last year, the European Parliament adopted the so-called Women on Boards (from English – women in leading positions) directive[5], which stipulates that by 2026, 40% of board members in companies listed on the stock exchange must be women. I expect that it will gradually become a good management practice in other large companies as well. State capital companies could set an example.
Second, employers themselves can take the initiative. For example, to revise the remuneration policy, to target women for leadership positions, to offer flexible working hours or to pay special attention to the inclusion and integration of women who have returned from childcare leave into the working environment. In a sense, the transition to more flexible working hours is good news for families with children, but only on the condition that the division of work responsibilities in the family is equal.
Third, women themselves need to realize their potential and “exercise their ambition muscle” because professional development, ambitious career goals and adequate pay are essential parts of what we call financial well-being. It is the sense of security, stability and freedom that affects a woman’s physical and mental health, relationships and overall quality of life.
In order to raise the topic of women’s economic empowerment and leadership, an event will be held in Riga on April 27 Innovative Impact Summit in which we will present practical solutions to reduce the income gap between the sexes. Solutions are developed in an idea sprint in cooperation with a technology company Accenturewithin which we try to answer the question, how can women overcome the “glass ceiling” and earn more?
The author is innovative co-founder
[1] Gender Equality Index, 2022 https://eige.europa.eu/gender-equality-index/2022/LV
[2] Eurostat, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Gender_pay_gap_statistics
[3] Eurofond, European Job Monitor 2021, https://www.eurofound.europa.eu/sites/default/files/ef_publication/field_ef_document/ef21009en.pdf
[4] World Economic Forum, https://www.weforum.org/agenda/2021/04/136-years-is-the-estimated-journey-time-to-gender-equality/
[5] European Parliament, https://www.europarl.europa.eu/news/lv/press-room/20221118IPR55706/parlaments-apstiprina-noteikumus-kas-uzlabos-dzimumu-lidzsvaru-uznemumu-valdes
