Iceland Has a Solve for the Gender Pay Gap

And it’s the first of its kind.

03.09.17
Iceland-To-Make-Companies-Prove-They-Pay-Women-as-Much-as-Men-Man-Repeller

Iceland has a goal of closing its gender pay gap by 2022 and — hold on to your cynical hats — is actually passing legislation to support it. Yesterday Thorsteinn Viglundsson, Iceland’s Equality and Social Affairs Minister, announced a new law that will require companies do their part and prove it. It’s essentially the legislative form of “pic or it didn’t happen.” Extra kudos on the fortuitous timing.

“The government said it will introduce legislation to parliament this month,” reports NBC, “requiring all employers with more than 25 staff to obtain certification to prove they give equal pay for work of equal value.”

Progressive parties and governments all over the world have acknowledged the pay gap and expressed a desire to close it. “Acknowledged” and “expressed” — that’s Activism Lite, which is great for sound bites but less great for actual progress. While a few policies have cropped up as a result, we’ve yet to see actual laws that address it head on.

“It is a burden to put on companies to have to comply with a law like this,” Viglundsson said. “But we put such burdens on companies all the time when it comes to auditing your annual accounts or turning in your tax report.”

I guess it’s not surprising that Iceland is first. The country “has been ranked the best country in the world for gender equality by the World Economic Forum,” says NBC. But also: “Icelandic women still earn, on average, 14 to 18 percent less than men.”

Regulation-shy parties often argue that people and companies ought to be trusted to do the right thing. It’s a cozy worldview. But the pay gap in the U.S. — still 70 cents to the dollar — is closing at a decreasing pace. In fact, the data says it’s not set to close for another 70 years. SEVENTY. When most of us will be dead and our kids will be retiring. (Sorry!)

It will be interesting to see how more direct government intervention plays out, and I wonder if such a law could ever pass in the U.S. What are your thoughts on this kind of legislation? How has your company dealt with this issue (or have they)?

Photo by Raymond Reuter via Getty Images.

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  • Paige Fisher

    I work for a woman owned engineering firm, and we still have a long way to go. I do business development as well as recruiting, and I just recruited a young, female engineer who recently had a baby. Before her start date, she emailed our CEO explaining that she was breast feeding and asked if we had a “mothers’ room” so she could pump a few times a day. My office reacted very negatively towards this request and said our state does not require them to have a “mothers’ room” and she would have to simply go to the bathroom and make up any time that she missed. I took a stand for this woman and shared my thoughts with our [female] CEO who does not have kids. She seemed very concerned with how the men in the building would react and wanted to make sure it was fair for them.

    The more I see these things happen, the more discouraged i get that this pay gap will not close in my lifetime, and certainly not by the time I’m having to balance work and a family. I know it’s starting to sound redundant these days, but women HAVE to keep standing up for each other despite the fear of another target on their back.

    • Basil

      That is shocking, and very short termist thinking
      I got back from maternity leave, and although it’s been rough in places (coming back to a new manager and team structure, my cover was let go a few months before I came back, a kid that’s constantly ill), in other ways my employer (large organisation) has been fabulous. I got coaching before, during and after my leave. I could negotiate amended hours, my boss let me define my role (for now I’m trying to do as much long term projecty stuff as I can, so it’s easier to organise) and I get 5 days free emergency childcare.
      I did consider moving roles, but given how accommodating they have been I’m staying, which means they have a happy (more productive) employee and don’t have to go through the expense (and hassle) of recruitment.

    • Meg S

      I don’t remember if it was on an MR article, but I read a comment from an intern who had to explain periods to a senator. A senator who was a publicly elected official, with a wife and children. He didn’t want to let her go change her tampon because he thought she could stop bleeding at will, and that she was just “playing around in the bathroom”.

    • R.G.

      Until you learn that all these allowances and special considerations you request, such as a breast feeding room, represent your COST to the company, you will never realize that there is no wage gap. In many companies, they actually spend MORE to employ women than men. You think in the wrong terms. You think you are valuable to your company but really you as an employee are a cost of doing business. You and every other employee represent a cost, an expenditure. The more the company has to spend on your behalf, the less you take home in a paycheck. Okay, stand up for each other, fight for more special allowances and special room construction and modified schedules and schedule changes so you can come in late or leave early and special health benefits and special child care provisions and whatever else will be the Cause of the Day, you just make yourself less desirable to the company overall. So how much actual WORK is being done at work? And you want a raise on top of all the special considerations?

  • Michellanne Li

    My company publishes the salary ranges for every position on my team. So, I don’t know *exactly* what my male colleagues make, but this transparency helps me gauge where I stand.

  • Cortez

    More than likely this will have the exact opposite affect than what is intended. If I as a business owner am now required to prove equity, then absolutely everything will be quantified. I have worked in environments where every benefit, allowance, and direct compensation were tallied together to get to a total cost of employment, which then can be evaluated. This type of legislation treats direct compensation as the only difference and it most definitely is not.
    Rigid schedules, every minute tracked, personal phone calls restricted, productivity measured for every penny of ROI, benefits based individually, ratings and rankings done twice a year, and the list goes on and on and on.

  • Augie Nelson

    I don’t know how it is in Iceland, but in America, men work 5 hours longer on average (37 vs 42 hours a week) so if you require absolute equality, you’d either have force women who don’t want to work longer to work longer hours, or you’d need to pass a law banning men from working longer hours than women.

    Under the first scenario, women who refuse to work longer hours would be fired because the company doesn’t want to pay the fine. Women who want more flexible hours would have to quit their current job for a worse paying job, thus worsening the earnings gap in society, but equalizing the pay gap for every company.

    However, the second possibility is far worse (and far more likely). Men would lose 10% of their pay as companies realize that they can’t get women to work longer hours, so they force men to work less hours so that way, that companies won’t need to pay the fine. You’d literally take away thousands of dollars from men, just so you can feel good about being equal.

    Overall, this policy, while well intentioned, could not possibly have a good effect.