Understanding the Importance of Equal Pay Day: A Guide

March 7 is Equal Pay Day. But what does this day of action, which is intended to draw attention to the wage gap between women and men, tell us? And what does the gender pay gap have to do with it? We'll tell you.

What is Equal Pay Day?

Equal Pay Day marks the day in the new year until which women have to work longer to earn the same pay as men did the previous year, so-called equal pay. Or the other way around, the day in the new year until which women work for virtually nothing because they earn less.


The idea for this day comes from the U.S., where it was launched in 1966 by the National Committee on Pay Equity. The motto from back then: "Equal pay, for equal work" still applies today. Actually, one could almost speak of an act of desperation, because the activist Susan B. Anthony had already kicked off this idea in 1868, and in the 1960s there was still no significant change to be noted. Unfortunately, this trend continues. 

In 1988 we finally get to our red bag, you know, the one from Valentine's Day. It becomes the symbol for the red numbers in women's wallets. Then in 2008 Equal Pay Day comes to Germany and in 2011 it takes place all over Europe, which unfortunately does not mean that it takes place in all European countries (but only in 23), just to avoid confusion or premature jumps of joy.

Do women really earn less than men?

This question is as simple as it is complex. But fear not: I will attempt an explanation that is so comprehensive and descriptive that you will be as well prepared for future discussions on this topic as some of the candidates for the chancellorship in the TV duel. However, I recommend a strong coffee or green tea (I've been told that also helps) and a glass of alcohol of your choice and/or a bar of chocolate, because some of what I'm about to tell you is not for the faint of heart.

What is the difference between the unadjusted and adjusted gender pay gap?

Let's best start at the very beginning with: Once upon a time... men and women in the working world (if you are bothered by the binary gender division, please forgive me, but this is another gap: a so-called data gap for all non-binary people). In terms of gender equality, which is theoretically guaranteed in Germany, as in many other countries, it makes sense to take a look at: "Hey, do men and women actually earn the same amount?

The unadjusted gender pay gap

To do this, we simply need to compare what men earn on average with what women earn on average. No sooner said than done: average gross hourly earnings of men and women are compared and the result is that men earned an average of 22.78 euros per hour and women 18.62 euros per hour in 2020. That is a difference of 18%, or 4.18 euros. This makes us look pretty bad in an EU comparison, except for eastern Germany, where things look much better - mmh, a reason to move? 

So women in Germany have to work 18% more on average to get the same pay, and that's how the date for Equal Pay Day is calculated. Tada! But if you're thinking: "Didn't she say it would be complex, that was super easy!", I'm sorry to disappoint you: that was the easy part. Because what I just presented was only the so-called "unadjusted earnings difference". If, like me, the word "clean" now makes you think of your mountains of dirty laundry or the fact that the bathroom needs to be cleaned again, I'll give you a minute here to take care of that.

The adjusted gender pay gap

Because now we come to the - drum roll - "adjusted gender pay gap." What can it do that the unadjusted gender pay gap can't? It takes into account additional factors, namely industries, professions, education, scope of employment (part-time or full-time), work experience, whether one has a management position or not. After all, you don't want to compare apples with oranges, or the salary of an investment banker with that of an educator. This means that salary differences can be justified, and this should be taken into account in the adjusted gender pay gap. 

In recent years, the adjusted gender pay gap in Germany has remained unchanged at 6%, i.e. 1.28 euros gross hourly wage, and is only recalculated every four years, most recently in 2018. Now we could all breathe a collective sigh of relief and think to ourselves, what's 6% or 1.28 euros? What's all the fuss about? It's not all that bad. And why don't we celebrate Equal Pay Day at the end of January?

First of all, we should note that this 6% is still problematic if there are no valid reasons for it, even if the Federal Statistical Office talks about an upper limit here. And although it sounds at first as if the adjusted earnings gap is more meaningful, and this is sometimes suggested, we need to take a closer look at the unadjusted gender pay gap. Because this is where we get to the heart of our problem, and that is structural reasons. That is, reasons that are socially embedded and lead to this wage inequality. And this is where, as with climate change or Corona, there is the greatest potential for denial. But before we get lost in that, let's take a closer look at the current state of affairs.

Why do women earn less than men? Causes of the Gender Pay Gap

As the Federal Statistical Office tries to reassure us, women earn less mainly because they mostly:

• Work in industries with lower wages,
• Work part-time or in mini-jobs, 
• Are less likely to hold management positions
• Have more frequent career breaks

At the same time, however, women are statistically better educated. When you look at these points in this way, various questions almost inevitably come to mind: why do women make such incredibly unfavorable decisions in their lives? Couldn't they be in other industries? Work more? Make an effort to get into a leadership position? And take fewer "career breaks" which is just another word for "breaks"?

In reading, after all, a sarcastic undertone is difficult to convey, so I ask that you reread the questions with just that in mind. After all, women's choices for a particular profession and the way they choose to pursue it - just like men's, by the way - do not take place in a social vacuum, but depend on many factors. So please do not succumb to the myth of "free will" and blame everything on it.

Reasons for part-time work

But let's address the first question: why do women make such incredibly unfavorable decisions when it comes to their professional careers? To do this, we need to take a closer look at their decisions. So let's take part-time work: here, the German Federal Statistical Office reports that most women cite "caring for children or those in need of care (31%) or other family or personal obligations (17%)" as the main reason for working part-time. Now, it is of course the case that men have these obligations as well, but why then are they so unequally divided between the sexes (women, after all, account for 79% of part-time workers)? 

In the case of heterosexual couples, there is certainly the simple mathematical reason that results from the gender pay gap: it simply makes more sense for the person who also earns more to work more, and that is just usually the man, especially when there are other responsibilities, such as caring for children or dependents. Let's face it: very few people can afford to forego income in order to act in a gender-equitable manner.

Additionally, there are also different expectations: Women are more often credited with caring, nurturing, providing for others, and so it "naturally" follows that they will take on these tasks as well. It is also more socially accepted than the opposite: consider the social attitude towards househusbands compared to housewives, for example.

Disadvantages of part-time work      

However, part-time work is disadvantageous in several ways: the hourly wage is lower than for full-time work, although one might assume that the person working part-time makes as much per hour as he or she does full-time. In fact, the opposite is true: people who work part-time are more productive. It is not for nothing that the call for the 4-day week or reduced weekly working hours is so great: it could be more economical and better for workers*. 

But part-time also makes it less likely to be promoted, this is true in collective agreements in the public sector, as well as in companies: those who work longer and more are rewarded and promoted for it. But if we free ourselves from this idea, then we could also imagine that someone working part-time could also be a good boss. I know: crazy thought! But that's usually not the only reason why we find so few women in management positions. 

In addition, part-time work results in a tax disadvantage, because the model of one main earner and one secondary earner is favored by wage and income tax and the splitting of marriages, and women, who are usually the secondary earners, end up with significantly less in their bank accounts.

From the Gender Pay Gap to the Gender Pension Gap

And last but not least, part-time work and mini- or midi-jobs lead to the fact - does anyone else find it disturbing that jobs have the same division as skirts and dresses? - that women slip from the gender pay gap into the gender pension gap. Yes, ladies, old age poverty predominantly affects women, because our interruptions in employment, aka caring for our children or other dependents, and working part-time means that we pay less into the pension fund and thus end up getting less out. If these aren't all good reasons to live a dissolute lifestyle that favors an early demise, I don't know what is, because being old AND poor doesn't sound very enticing. 

But what about our original career choice? One could point the finger at this and see it as the origin of all evil. Women usually choose typical female professions that are easy to combine with children or other commitments. So why don't we go into other industries? But that's actually the wrong question. Because the real question is almost philosophical: what determines the value of our work?

How much is your work worth?

Male-dominated professions vs. female-dominated professions

Since Corona, at the latest, we have known that the "system-relevant professions," i.e., those without which it would not be possible, are not at the same time the best-paid, although one could intuitively assume that they are. But what then defines the value of a job and, above all, who? Because here, too, we have to realize that things are not necessarily above board. in so-called typical women's jobs, such as educators and nurses, wages are lower than in typical men's jobs. this often has to do with the fact that "care work" is attributed a lower value than physical work. Often, however, the value cannot be justified on purely rational grounds. 

The fact that the valuation of work in gender-segregated occupations is not about the value of the work itself becomes particularly apparent when a change takes place. For example, devaluation occurs when the number of women in a male-dominated occupation increases significantly. That is, wages become lower and, in most cases, so does the prestige of the profession. An example of this is the profession of doctor.

On the contrary, women's professions are upgraded when more men enter them. Wages and prestige increase. A well-known example is the beginning of software development. Today it is a male-dominated profession, with good reputation and pay. However, it has been so only since women were pushed out of this profession. In fact, in the 1960s, this profession was mainly practiced by women, and today we are frantically trying to reverse this trend, but to what end?

Because these developments show why it will not solve the problem of the gender pay gap if women "simply" change industries, as this also entails a devaluation of these very professions. Here I recommend a hearty sip of alcohol or a piece of the chocolate that has been laid out ready.

Unpaid labor

If you're thinking: "Enough bad news for women, please", I'm sorry to disappoint you. The gender pay gap "only" measures the gap in waged work, but not in the actual work performed by men and women. Because the majority of the work that women do is completely unpaid. And for doing this work, as we have seen, they are disadvantaged in wage work.

I also highly recommend the Ted Talk by economist Marylin Waring, who makes it clear that although this unpaid work makes up the largest part of the economy of many countries (in terms of hours worked), it does not appear at all in calculations of economic growth, such as gross domestic product. And likewise, these hours of work don't show up in women's accounts either. So we might as well have been twiddling our thumbs during that time.

Why should I celebrate Equal Pay Day? 

If you haven't yet feverishly rummaged through your closet for a red bag or looked around for Equal Pay Day events in your area, I'm going to make him/her feel a little better. Because Equal Pay Day also proposes some solutions to promote equal pay, namely:

• Wage transparency: if it is not clear who earns how much and why, it is also difficult to prove inequalities.
• Upgrading of female-dominated professions: not only in terms of perception, but also through better pay
• Encouraging women and girls to be active in STEM professions (and apprenticeships).
• Promoting women into management positions
• Consideration of "absences" due to care of children or relatives and help with re-entry
• Raising awareness of and refraining from role stereotypes, e.g., during career counseling.

Above all, Equal Pay Day advocates for women to have a say in the future shaping of professional life, as this automatically promotes that the situation of women is taken into account and thus also improves.

Conclusion on Gender Pay Day

Ultimately, it's not about women adapting perfectly to current circumstances and doing the same as men, because that doesn't work. Often, women are simply expected to be more self-confident in salary negotiations or promotion interviews, to choose STEM professions, to work full-time, and to return to work immediately after maternity leave, in other words, to simply become more like men.

But in doing so, they would only be adapting to circumstances that are not made for them, that do not take into account the reality of their lives. Moreover, it is too short-sighted, because the problem of unpaid work remains and I am sure that many men do not always find the system as it is rosy.

It's more about a rethinking, a rethinking of work in general and of paid work in particular. So use this day, March 7, to dream, to radically rethink things, to question everything and best of all give it a voice, whether virtually, on the street or simply symbolically, in the form of a red bag.