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EQUALITY

Why is the gender pay gap so big in German-speaking countries?

In Germany, Switzerland and Austria, women are losing ground in the fight for pay equity, according to a recent analysis from the Munich-based Ifo Institute for Economic Research.

Published: 8 March 2024 15:05 CET
Pictured is a work meeting.
Employees gather at a work meeting. Photo by Christina @ wocintechchat.com on Unsplash

As DACH countries celebrate International Women’s Day, inequalities in the workplace still remain – especially when it comes to remuneration. 

Despite efforts to close the gender pay gap, new research reveals that men still receive much higher bonuses than women in German-speaking countries.

“The gender pay gap in bonus payments is significantly bigger than in basic salary,” said Ifo researcher Michaela Paffenholz in a report published on Tuesday. “These major differences make the gap in total salary even larger.”

Ifo’s data reveals the pay gap in performance related bonuses extends across the DACH region. In Germany, women receive an average of 6.1 percent less in bonus payments, while in Austria, the gap between men and women is 7.2 percent and in Switzerland, women receive an average of 5.2 percent less in bonuses.

The prevalence of performance-based pay continues to grow across Europe. The number of workers receiving performance bonuses nearly doubled from 2000 to 2015 to include nearly a third of European workers, according to a European Trade Union Institute working paper. 

Reducing the gender pay gap is one of the top priorities of the EU Gender Equality Strategy 2020–2025. But the issue of unequal bonus pay has received little focus from policymakers. 

Ifo Institute’s analysis found that bonus payments can increase the gender wage gap. 

In Germany, the pay gap between men and women in basic salary is 2.7 percent, but bonuses increase this gap to 3 percent in total salary. In Austria, the gender gap in basic salary is 2.3 percent, with bonus pay bumping that up to 2.9 percent.

In Switzerland, the gap is 1.2 percent for basic salary; bonus payments increase this to 1.6 percent for total salary.

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Still, the gender pay gap is not limited to hourly earnings and bonus payments: working in lower-paid sectors and fewer working hours also contribute to the gap between men and women’s pay.

According to statistics from the Germany’s Statistical Office, working women in Germany earned 18 percent less than men in 2023. 

This story translates across the DACH region. In Austria women earned 18.4 percent less gross wages per hour than men in 2022. Swiss women face a similar reality. Working women earned 18 percent less than men in 2022, despite “equal pay for work of equal value” being enshrined in the federal constitution since 1981. 

Larger companies are overrepresented in the market data collected by Mercer, so the studies are not representative of all companies in the DACH region. 

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FAMILY

More childcare, less paperwork: How Germany can make life easier for foreign parents

As Germany celebrates International Women’s Day, many foreign parents say the government should consider new measures to improve gender equality within households.  

Published: 8 March 2024 13:15 CET
More childcare, less paperwork: How Germany can make life easier for foreign parents

Germany ranked sixth in the world for gender equality, according to a 2023 World Economic Report. The report ranks countries for equality of economic and educational opportunities, for health coverage, and for political empowerment.

Still, the gender pay gap is not limited to hourly earnings and bonus payments. Working in lower-paid sectors and fewer working hours also contribute to the gap between men and women’s pay. According to statistics from the German Federal Statistical Office, working women in Germany earned 18 percent less than men in 2023. 

Limited childcare options leave expat parents in a bind

However, gender equality is more than bridging the pay gap. Some expat parents in Germany say the government should do more to make full time work possible for both parents. 

Julianna ElSayed, mother of a Kita-aged son in Düsseldorf, said extending Kita opening hours would be a great place to start. But, she said, this would only help if the extended hours could be maintained to help parents plan their days. 

“We often encounter situations where we have to pick up the children earlier, or the Kita has to be closed or there’s an emergency and people have to pick up the children earlier,” she said. “This caused a lot of tension for us because we are both working, my husband is working full time, I’m working 30 hours per week. It’s hard for me to pick him up earlier.”

Many of the shortened days were caused by staff shortages. This is a problem felt across Germany, and an issue expected to remain for years to come. In a survey published by the German Kindergarten Directors’ Congress in spring 2023, 64 percent of the Kita directors surveyed said they had been short-staffed more than 20 percent of the time last year.

READ ALSO: How expensive is childcare across Germany?

ElSayed’s son goes to Kita from 8 to 14:30. She works part time during the mornings and picks him up from Kita in the afternoons. ElSayed said this pick-up schedule can be difficult for households that need both parents to work full time.

“This is a real issue because both of the parents cannot really work full time, especially for expats, as I see most of us don’t have relatives here who could jump in,” ElSayed said.

Irene Brandt, an American mother of two living in Heidelberg, agreed. She said cities should consider the density of parents in an area when deciding how many extended hour daycare facilities should be available.  

“If you have a lot of people in one area, making sure within a radius, you have at least one or two Kitas that offer extended care and maybe filtering it a bit by whether both parents work full time, so they can get priority for these places,” she said. 

READ ALSO: Everything that changes for families in Germany in 2024

Brandt is a full time doctoral student and her husband works full time as a software engineer. She said improvements to Germany’s childcare services would help her focus more attention on her job.

“I’m trying to squeeze in as much as possible before I have to leave to pick her up at 2:30pm,” Brandt said. “My daughter’s kindergarten doesn’t offer anything extended.”   

Children at a kita in Schlewsig-Holstein

Children at a kita in Kiel, Schleswig-Holstein. Photo: picture alliance/dpa | Axel Heimken

But Kita opening hours are not the only problem expat parents face: the lack of translation for important documents to access state resources or sign up for daycare is another major hurdle for foreign parents in Germany. 

Lack of translations 

ElSayed speaks German fluently, but her husband is still learning the language. She said creating more translated resources could help ease the transition for parents in dual-language households. 

“I don’t think it’s a weird expectation to have at least one person in Kita who could speak English and help out,” she said. “Even though I speak German, sometimes I don’t understand simply because I don’t have the background knowledge of how the system works.”

ElSayed previously lived in the Czech Republic and said her village had an expat center to help immigrants with translation and understanding cultural differences. She said the creation of something similar in Germany could help many expat families know what resources are available for them. 

Maxine Edwards, a Bavaria-based Australian-German mother of two, agreed. Edwards said moving from Australia where online resources and help hotlines were abundant was a challenge. She said Germany could aid parents by creating similar hotlines or online chats. 

“I always have to translate everything into English,” she said. “Germany doesn’t have that help if I need assistance, so I’m literally just guessing through the paperwork.”

Connor Robinson, an American father of two, said streamlining resources would be another way to even out the load between parents. 

READ ALSO: What benefits are you entitled to if you have children in Germany?

“My experience is probably unique because my wife is German, because of that she is knowledgeable of the different benefits and resources that exist,” he said. “On my side I would have a hard time knowing where to look… all these resources are available but they are all in different offices within the German government, so that can be confusing.”

Parental leave

Brandt, who is American, said parental leave is one of the benefits that can be confusing for expats. She said her husband’s German company offered him up to 12 months of parental leave. But the family could only afford him taking one month off because of reductions in salary. 

“There was a cap on how much he could collect which then reduced the amount of months that he took off,” Brandt said. “The nice thing that Germany does is [that] then for the rest of the months that he had left in the parental leave they were able to transfer it to me so I got about €200 or €300 per month.”

Children hold hands at a Kita in Hamburg.

Children hold hands at a Kita in Hamburg. Photo: picture alliance/dpa | Christian Charisius

She said adjustments could be made so more fathers could take more time off if interested – a change that would also take pressure off mothers of ill children. 

READ ALSO: Everything you need to know about parental leave in Germany

“Our daughter had significant health issues the first six months – you can never plan for that,” Brandt said. “That’s when you would want parental leave to kick in, since we didn’t use the 12 months just for him to be home for a week and not worry about the salary loss.”

But compared to not having statutory parental leave in the US, the system in Germany was still an improvement, she added.

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