Gender equality

Women’s hourly earnings exceed men’s

Luxembourg has achieved equal pay on average per hour. But more women still work part-time or not at all, which hides other income inequalities. Photo: Shutterstock

Luxembourg has achieved equal pay on average per hour. But more women still work part-time or not at all, which hides other income inequalities. Photo: Shutterstock

The wage gap at -0.2% was in favour of women in 2021. It’s a first for Luxembourg, even if this only concerns the average hourly wage, which hides many inequalities, such as annual salary or pensions.

Equality is progressing in Luxembourg. While the country had the lowest gender pay gap in the European Union in 2018, at 1.4%, this has fallen further in 2021 to -0.2%. This rate is calculated as the percentage difference between women’s and men’s pay. It’s a common methodology established by Eurostat and used for all European countries, based on the average hourly wage for the economy as a whole, excluding public administration. This means that for the first time, it is women who earn more than men.

The grand duchy is thus a pioneer, since none of the other countries studied by Eurostat has achieved equal pay. In Belgium, the pay gap is still 5%, in France 15.4% and in Germany 17.6%.

In Luxembourg, it was 10.7% in 2006 and 5.4% in 2014. And according to the most recent Statec data, it is expected to decrease further to -0.4% in 2022.

More women in part-time work, more men with very high salaries

While this is a good step forward, there are many biases to be noted. First, only hourly wages are considered here. However, taking an annual viewpoint, including end-of-year bonuses, the gap remains in favour of men, writes Statec--standing at 7.1% according to figures from 2021.

In addition, the rate of women working part-time remains higher than that of men. Four out of five part-time jobs are held by women. Their number of paid hours is therefore 13% lower than that of men, Statec calculates. The gender pay gap is also based on average wages, not on equal work.

Statec explains the small hourly wage gap by the fact that women’s level of education is higher than that of men--in 2021, 67.8% of women had a higher education diploma, compared to 57.3% of men, for the 30-34 age group. There is also the strong presence of women in branches of activity with relatively high salaries (education, health, finance, research, legal services, etc.), and their favourable position in the middle and higher salary categories, even if they remain under-represented in very high salaries. 50.8% of women earn between €50,000 and €150,000 per year, compared to 41.8% of men. However, 2.4% of men make €200,000 or more, compared to 0.8% of women.

This, coupled with the high proportion of highly qualified employees in Luxembourg’s workforce, explains Luxembourg’s good position compared to other European countries.

Disparities by branch

If we look at the gap by branch, we also see strong disparities, particularly in real estate activities (gender pay gap of 23.1%), financial and insurance activities (23%) or specialised scientific and technical activities (21.9%).

The employment rate for women remains 7.4 percentage points lower than that of men, according to figures for 2021.

Finally, there are also inequalities in access to assets, due to differential education in investment. And in terms of pensions, Luxembourg is the worst performer this time, with a gap of 44% in 2019.

This story was first published in French on Paperjam. It has been translated and edited for Delano.