Are Women and Men Paid the Same?

This June, men’s average gross salary was EUR1,869, or EUR229 higher than that of women, who earned EUR1,640 on average or 87.7% of men’s pay, Sodra’s data shows.
If we imagined a clock that measures the pay women and men get for working from 9:00 AM to 5:00 PM, it would show that women get paid only until 4:01 PM, while men get paid for the full day’s work.

To mark International Equal Pay Day (first announced by the United Nations in 2020), on 18 September, we take a closer look at men’s and women’s salaries and the associated economic consequences for women.

What this means for women

Vilnius University Faculty of Economics and Business Administration Professor Jelena Stankevičienė, who was one of the founders of the Lyderė Association, says: ‘In light of this, women earn EUR0,87 for every EUR1 men earn, meaning that they would need to work an additional 1.5 month every year to make up for the difference. Women have less money to save and invest, which means a more economically insecure retirement.’

This is also demonstrated by the statistical data. The average state pension women receive in Lithuania is 20% lower than that of men, and, according to the 2019 survey of income and living conditions, 38.8% of pension-age women are at risk of poverty – compared with 17.7% of pension-age men.

Prof. Stankevičienė also lists the key reasons behind the gender pay gap. Studies suggest that women’s pay decrease after giving birth results in a long-term pay gap of 20% compared with the pay of men or childless women. Sodra also observed that the largest gender pay gap occurs within the 27-38 age group. The peak is reached at 32 years of age when men’s pay is 34% larger than women’s. The smallest gender pay gap is observed at roughly 50 years of age, with men earning only about 5% more than women.

Another important factor is that women are twice as likely to be raising children or grandchildren and taking care of the elderly and the disabled, and three times as likely to do the cooking and housework on a daily basis. For all these reasons women struggle to find more time for their careers, business and creating financial wellness.

Although the principle of equal pay for equal work in employment contracts within the European Union (EU) was established back in 1957 and later became part of the EU law, the progress on the issue has been very slow. According to Sodra, the gender pay gap (with respect to the income from which social security contributions are deducted) has decreased by five percentage points in Lithuania over the last six years. The most substantial gender gap change – of 2.7 percentage points – occurred in 2019, with it dropping from 18.1% to 15.4%. The European Trade Union Confederation predicts that women will have to wait another 84 years to achieve equal pay.

Transparency in employee earnings

‘In May 2021, Sodra started publishing average men’s and women’s salaries in Lithuanian companies and organizations. We have so far been unable to observe a decrease in the gender pay gap following this change. The statistical data on men’s and women’s pay is affected by multiple factors including the season of the year, different rates of growth at different areas of economic activity, and the Covid-19 pandemic and its consequences for the labor market,’ says Julita Varanauskienė, Director of Sodra.

One of the largest gender pay gaps is observed in the information and communications sector. However, it has slowly been shrinking, from 56% last year to 52% this year. The second largest gender pay gap is observed in the healthcare sector, where most employees are women. During the pandemic, their pay was rising fast due to the increased workload. Nonetheless, the gender pay gap in the healthcare and social work sector still remains among the largest, amounting to 43% and staying more or less stable, Varanauskienė says.

Measures to reduce the gender pay gap

In 2021, the European Commission proposed measures to ensure equal pay for equal work. Representatives of business and the public, who formed the Lyderė Association, actively support the Commission’s proposal and urge to implement the measures immediately. These include raising awareness about the existing gender pay gap issue and its socio-economic impact and regularly publishing the pay gap statistics on the national and company-specific level.

‘Each and every one of us can make a difference in our immediate environment,’ says Prof. Stankevičienė.

‘It is imperative to notice and change one’s personal stereotypes, which means sharing housework and caring for children, encouraging and supporting women and girls in the pursuit of their ambitions, and helping to find the balance between work and family life. The impact of this would go beyond the improvement of each woman’s or family’s financial situation: Greater economic empowerment of women also has a positive effect on the economic wellbeing of the entire country,’ she says.

Prof. Stankevičienė insists that including women in the decision-making process in company boards, organizations and governmental institutions would help us ensure a gender balance in executive positions and achieve change. This is the only way for us to expect to be able to catch up with Luxembourg, where the gender pay gap is only 1.3%, sooner than in 84 years.