The gender pay gap is a phenomenon that has kept economists, political scientists, and sociologists very busy in recent years. However, to compare this phenomenon, that the gender pay gap undoubtedly is, internationally, we must first define and understand it precisely. So what is this gap all about, and are we in danger of falling into it?
A gap too deep
The gender pay gap is an indicator that measures the percentual difference between men’s and women’s earnings. Scientifically speaking, there are many international ways of measuring it. Unless otherwise stated, the gender pay gap is defined as a simple percentual difference between men’s and women’s average gross hourly earnings.
The most common approach is the so-called adjusted gender pay gap. It reflects the difference in earnings between women and men in the same positions, of the same age, and with the same education or years of experience. This indicator can more accurately determine how much of the gender pay gap is due to discrimination itself.
The gender pay gap is a global phenomenon, but it is clearly not the same in all countries. In the United States, for example, the gender pay gap in 2023 is 16.3%. This means that for every dollar a man earns, a woman earns only 83.7 cents. While this may seem like a tiny difference at first glance, these few cents over a whole year grow into a difference of around USD 10,000 (EUR 9,200).
There is currently a gender pay gap of 13% in the European Union, meaning that for every euro a man earns, a woman earns only 87 euro cents are made. And, as in the case of the United States, these few cents add up to thousands of euros over a year. According to internal EU estimates, more women in the labor market and equal pay would increase employment and provide a GDP increase of 5.5% or EUR 1,490 billion by 2050.
All of that is the average situation in the European Union. But how are the Three Seas Initiative countries doing? Do they have something to boast about, or are they lagging behind the EU average? Well, it depends.
The equal ones and not-so-equal ones
Even our Three Seas Initiative region has its champions. In these countries, women are almost equal to their male counterparts in terms of pay. The most equal situation is in Romania. There, the gender pay gap stands at just 3.6%. Slovenia is the second most equal country, with a gender pay gap of 3.8%. Poland is third, with a gender pay gap of 4.5%.
On the other, not-very-flattering side is Estonia with 20.5%, followed by Austria with 18.8%, and Hungary with 17.3%. The rest of the countries are scattered between these two extremes. Bulgaria and Lithuania are, for example, just below the EU average (12.7%), with gender pay gaps of respectively 12.2% and 12% levels. On the other side are Czechia and Slovakia, two brotherly countries, slightly worse than the EU average – Czechia with 15%, Slovakia with a slightly worse 16.6%.
Even so, the Three Seas Initiative countries are not in the worst shape. According to OECD statistics, which methodology differs from European statistics, they are ahead of much more advanced countries such as Israel and South Korea. Countries such as Japan and Canada are at a similar, only a slightly better level.
The hidden variables
However, it is also important to mention that the gender pay gap is not a universally accepted phenomenon. Some economists strongly reject it as an indicator. In the same breath, they add that we are trying to quantify, in a normative, i.e., opinionated, way, a variable whose variations are hidden in the efficiency and intensity of work.
Others warn that if any differences exist, they are hidden primarily in society’s customary and historical settings. They warn very strongly against legal and directive efforts to remedy, i.e., to erase, the gender pay gap. According to them, there may be a kind of push-back, and the intended ‘improvement’ may do many times more harm. They then advise letting things run their course, which should inevitably lead to equality.
Many also point out that the gender pay gap is closely related to the structure of the economies in question. For example, women are over-represented in health care, education, and social care. These are areas where pay is much lower on average.
There’s no easy path forward
What the future holds is in the stars. The gender pay gap phenomenon is linked to many variables that cannot be changed overnight. It would be necessary to update the approach to maternity leave, which strongly affects women’s pay. In many companies, the tactics for recruiting new employees and their financial compensation would need to be changed. And this is just the beginning.
And these are all processes with very high costs. Costs that, in the eyes of many, are entirely unnecessary. At the moment, there is no choice but to let things run their course. A general estimate would be to speculate that as the Three Seas Initiative countries become more and more cooperative, there will be some degree of economic convergence.
And this economic convergence could reduce the gender pay gap to the level of the “best” Three Seas Initiative countries. And then all the nations of the Three Seas Initiative would be prime movers that the rest of the European Union would look up to.
