Even today, women still earn less than men. This difference, the so-called gender pay gap, is currently 18 percent. There are various reasons for this, but the result is the same: women often have less money available during their working lives. This is also reflected in their pensions later on. That’s why you should even out salary differences early on.
Gender pay gap — this is how much less women earn
Do you know what your colleagues receive in their accounts at the end of the month? If they don’t, you’ll probably be spared trouble. Because it is quite frustrating to learn that your own salary often lags behind that of men for no reason at all.
According to the Federal Statistical Office (Destatis), women earned 18 percent less per hour than men across all industries in 2021. In western Germany and Berlin, the differences are significantly higher at 20 percent than in the east at six percent. The German government has set itself the goal of reducing this difference to ten percent nationwide by 2030.
If we look at the salaries of women and men with the same experience, the same job and the same career level, the result is a wage difference of six percent on average in favor of men — the adjusted gender pay gap.
At first glance, this six percent doesn’t sound like too much. However, over an entire working life, the women affected miss out on a lot of money — for the here and now and for the future.
For example, a man earns an average of 3,500 euros gross per month over 35 years, or 42,000 euros per year. A woman with the same qualifications receives six percent less for the same work. This means she receives 210 euros a month and 2,520 euros a year less than her colleague. Over 35 years, that’s 88,200 euros. And that is missing both acutely and in retirement. Because those who earn less money also pay less into the pension fund and have less available to make private provision for old age.
Is it a woman’s own fault?
However, the six percent adjusted gender pay gap only shows the difference between women and men working in similar positions. Many women’s employment biographies cannot be compared with those of men.
There are several reasons for this: Women tend to be the ones who stay home and take care of the household because of the children and at the expense of their careers. Quite a few often return to work only part-time. During Corona, this problem has only intensified.
A study by the German Institute for Economic Research (DIW) in 2021 shows that the number of women who primarily handle childcare alone doubled during the pandemic — 24 percent of the mothers surveyed and only 5 percent of the fathers surveyed took care of the children without help from their partners.
This circumstance is the result of the gender pay gap. Since women earn less than men, their income is more likely to be dispensed with.
In addition, women are more often employed in mini-jobs than men. According to the German Federal Employment Agency, 1.8 million men but 2.8 million women were marginally employed in 2020.
Finally, women often choose professions that pay comparatively less. These include, for example, nursing and geriatric care as well as the social sector. However, women and men earn equally little there.
So what to do?
Look for another job, return to full-time work as soon as possible after the birth of the child or, best of all, win the lottery. If it were that simple. In their panel analysis «Feminization of Occupations and Wages,» social scientist Emily Murphy and social scientist Daniel Oesch found that the wage level of an occupation changes as soon as more women enter it.
For example, if a male domain becomes more and more female, the salary level there drops. And this is not because men earn less, but because women earn lower salaries and this affects the average.
Women are disadvantaged in the labor market. The Federal Ministry for Family Affairs, Senior Citizens, Women and Youth (BMFSFJ) also recognizes this. The introduction of the statutory minimum wage and the expansion of childcare and financial support for parents are intended, among other things, to pave the way for women into a fairer working world.
In addition, on days of action such as International Women’s Day or Equal Pay Day, participants work to combat gender stereotypes and discrimination. But you yourself can also make a difference. After all, it is not only about the present, but also about your retirement provision and the amount of your future pension.
Why salary is consequential for your pension
Those who earn less pay less into the statutory pension fund and consequently have less money in old age. Women in particular are at risk of poverty in old age.
According to Destatis, one in six women over the age of 65 is on the verge of old-age poverty — for men, it is one in eight. This is why there is now even a new term: the Gender Pension Gap. In 2020, the Organization for Economic Cooperation and Development found that the pension gap in Germany is more than 40 percent. On average, women in Germany receive half as much pension as men.
To put this in perspective, anyone earning 60 percent or less of the median net household income is considered poor. For a one-person household, this is currently 1,126 euros (as of 2020), according to the German Institute of Economic and Social Research (WSI).
Info: The mean income, also known as median income, characterizes the income level from which the number of households with lower incomes is equal to that of households with higher incomes. In other words, the median income divides income earners into two exactly equal halves — the lower half has at most, the upper half at least the median income.
The German Pension Insurance regularly announces the amount of the average pension. In 2021, the average pensioner received 1,210 euros gross in the old federal states and 1,300 euros gross in the new federal states. For women, the situation was significantly worse — especially in the old federal states. There, the average female pensioner receives 730 euros gross. In the new federal states, she receives 1,075 euros gross. There are historical reasons for this: Whereas women in the east used to want to work, the model of a housewife’s marriage was more common in the west.
In the summer of 2022, the German government plans to raise the pension. There is to be a 5.2 percent increase in the new federal states and a 5.9 percent increase in the old federal states.
Fighting for a good salary at an early stage
To avoid the pension trap and poverty in old age, you should pay attention to a fair starting salary already at your first job. Find out about salaries in your industry, ask friends and acquaintances, and realistically evaluate your own knowledge and skills.
Many women sell themselves short and settle for lower salaries. This is a social and structural problem. Only by knowing your own skills and insisting on their value will you lay a solid foundation for your continued salary growth.
After the first step is done, it’s time to stay on the ball: Renegotiate regularly — preferably once a year. It sounds like a lot, but it’s actually not. Because with every year of professional experience, your value to the company increases — and that should also be reflected in your account.
