In segregated labour markets, women need hypothetical comparators and collective support to make equal-pay claims.
The gender pay gap in the European Union remains stubbornly high at 12.7 per cent, while the pension gap between men and women is far wider, at 29 per cent. The problem of unequal pay for work of equal value is structural and can be addressed only if feminised jobs can be compared with jobs in other, higher-paid sectors.
Deeply rooted, historical pay inequalities, as well as women’s predominance in low-paid and precarious work, account for a significant part of the gender pay gap. Prejudices and stereotypes have led to the undervaluing of predominantly female jobs, with the skills women acquire through their life experiences underrated or even overlooked. Gender pay inequalities widen even further when we take account of mutually-reinforcing discrimination faced by racialised, migrant, disabled and LGBT+ women workers.
Data from the International Labour Organization show that the higher the proportion of women in an enterprise, the lower their wages compared with sectors with similar numbers of employees and coverage by collective agreements. When women exceed 65 per cent of the waged workforce in an enterprise, their pay declines relative to more mixed workforces and it declines even further when women represent over 90 per cent of the workforce. In many occupations and sectors where women work—such as cleaning and in care, domestic, administrative and shop work—there is no male comparator in the establishment to benchmark a gender-based pay differential.
Addressing segregation
The European Union pay transparency directive, adopted in the spring of 2023, permits employers and trade unions to address this challenge, where workers have no comparator for the purposes of asserting equal pay for work of equal value. It will help to address occupational segregation and the undervaluing of women’s work and skills.
By permitting comparison with a hypothetical comparator, the directive has the potential to unblock a significant barrier. It enables workers to establish unequal pay based on how a worker ‘would’ have been treated in a comparable situation. A hypothetical comparator was already permitted at EU level under the non-discrimination directives and the agency-work directive; this has however rarely been deployed in equal-pay cases.
Trade unions have helped to raise awareness of the problem and to push for cross-sectoral comparisons as a basis for pay rises, addressing the undervaluing of women’s work in pay negotiations. In Belgium, the restriction of the interpretation of the concept of work of equal value to the same establishment led the Institute for Equality between Women and Men to recommend in 2021 that there be a tool to establish work of equal value across sectors. In France, a cross-sectoral study by the Confédération française démocratique du travail in 2019 helped reveal domination of jobs in a sector by one gender or the other as one of the problems in measuring the gender pay gap. In New Zealand and Canada, meanwhile, recognition that women’s jobs are undervalued is associated with acceptance of hypothetical or proxy comparators.
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Critical role
Collective bargaining has a critical role to play in tackling the structural causes of the gender pay gap—and then closing it. A hypothetical comparator must be built upon to ensure valid cross-sectoral comparisons for jobs predominantly carried out by women. As the European Trade Union Confederation has already argued, while the pay-transparency directive and the Court of Justice of the EU (in Lawrence) have recognised this in principle, it must not be left to employers to decide which jobs can be selected for comparison. Collective bargaining must be utilised to implement hypothetical comparisons and to address gender-based pay inequalities in segregated job and sectors.
Only then will we have a real opportunity to close the gender pay gap.
Dr Jane Pillinger is a researcher specialising in pay equity and gender-based violence and harassment at work. She is author of a policy brief from the European Trade Union Institute on ‘The role of hypothetical comparators in determining equal pay for work of equal value’.