FRANKFURT – Despite having a woman chancellor for a decade-and-a-half now, Germany has one of the widest gender pay gaps across Europe. This may soon change, however, as the new government led by Olaf Scholz has announced its aim to reduce this gap by making legislation to support wage transparency. 

Though Germany is the largest economy in Europe, women here earn 19.2% less than men on an average even as the average gender pay gap for EU stands at 14.1%. In the region, the only countries faring worse than Germany on this indicator are Estonia, Latvia, and Austria. Cultural biases, ingrained stereotypes, insufficient resources for good childcare, prevalent idiosyncrasies and a skewed tax system are some of the reasons behind the situation, as per economists. 

One of the people who lobbied for a new policy on pay gap was European Parliament member Terry Reintke. He feels that this action is severely needed in his country. “Germany’s image on issues like gender equality is very different from the reality on the ground,” she said.

When leaders of the new coalition addressed the nation for the first time, they spoke about the policy on pay which also increases the minimum wage in the country to €12. “We want to close the pay gap between women and men,” said the agreement. 

They also said they supported a directive of the EU which seeks to introduce pay transparency in all member states, which is being discussed by the European Commission and parliament in Brussels. It would make it mandatory for all employers to declare pay gaps within their organisations, and they could be liable to penalties if they don’t improve on this metric. 

Even as the move has earned praise from some quarters, there is a huge opposition as well, specifically from the Confederation of German Employers’ Associations. The opposers have dubbed ‘Brussels bureaucracy’. 

Talking to news agency Reuters, chief executive of the employers group Steffen Kampeter said that the policy disregards factors like career choices of women and part-time work that are at the root of pay inequality. He believes that instead the government and employers must work on initiatives like childcare provisions and help women strike the work-life balance, calling the proposal “merely an additional bureaucratic burden for companies”.

Economists also say that Germany’s wide wage gap is due to a large number of women being part-time employees. In contrast, countries like Italy that have a much smaller gender pay gap have fewer working women, but they are engaged in high paying jobs.