What the minimum wage and labor reform can do to reduce the wage gap for women

The Government is likely to approve the minimum interprofessional salary (SMI) for this year at the next Council of Ministers, which will reach 1,000 euros gross per month. Being a mileurista will be the salary floor in Spain. The majority unions have recalled that women will be the main beneficiaries of the measure, since they are the vast majority – over 60% – among wage earners who earn wages below the SMI.

This rise in the lowest legal salary is expected to reduce the salary inequality that harms women, they indicate in CCOO and UGT, as has been seen with the latest rises in the SMI. The salary gap was reduced in 2019 more than in the last decade, after the SMI rise to 900 euros per month.

On the other hand, CCOO and UGT have highlighted this year their confidence that the recently approved labor reform will also contribute to increasing the wages of the most precarious women and, therefore, that this will also help reduce the gender gap in payroll . The unions point out above all two issues in this regard: the restrictions on temporary contracts, which affect more women and in which there is a greater wage gap than in permanent contracts; and, secondly, the prevalence of the sectoral agreement on wages and its reference to subcontracting, which will have a major impact on some very feminized and precarious outsourced activities.

For example, cleaning, home help and maids who clean and prepare hotel rooms. This is the case of Eva María Cancelo, a Galician worker who explained to elDiario.es that her salary should increase by around 200 euros per month if the sectoral agreement for home help in Galicia were applied. Also Nuría Manzano, worker and trade unionist in the telemarketing sector, warned that the labor reform will mean the transition to indefinite thousands of workers in her sector, affected by a great temporality.

There is also another key piece of legislation, this time directly, to reduce the gap in what women and men earn: equality plans. The equal pay law extended the mandatory equality plans to companies with more than 50 workers, some 25,000, which must have new measures such as salary records, pay audits and the assessment of the jobs they intend to bring to light less obvious inequality. The legislation comes into force in its entirety on March 7, as summarized in this podcast of ‘Un tema al Día’ by Juanlu Sánchez.

“Now we have the instruments to be able to address the gap,” Cristina Antoñanzas, deputy general secretary of the UGT, highlighted on Tuesday, which has encrypted “more than 5,000 open negotiations on equality plans” in the union. Antoñanzas, as well as the leader of the CCOO, Unai Sordo, demanded “more resources” from the government for the unions given the role of their representatives in these negotiations throughout the country.

The wage gap exists and is evidenced in multiple data

CCOO and UGT have published this week their annual reports on the wage gap, before February 22, Equal Pay Day, and close to March 8, International Women’s Day. The European Commission defines the gender pay gap as “the relative difference in the average gross income of women and men within the economy as a whole”.

There may be differences on how to measure the salary gap, in fact CCOO the figure is 24% and UGT 19.5% in Spain, but there is no doubt that it exists and is expressed in a multitude of data. Women earn less than men for different reasons, some based on indirect discrimination, others in which there is obvious discrimination and, sometimes, caused by the multiple biases and gender stereotypes that accompany us every day.

The difference in gross profit per year in 2019, before the pandemic, was 5,252 euros per year. CCOO translates this amount into a gap of 24%, which is what the annual salary of women should increase to equal that of men. UGT the figure instead is 19.5%, because the percentage expresses what men earn that women do not earn.

The most harmful elements that cause the breach

The causes of this wage inequality? CCOO and UGT highlight in their reports some of the most harmful for women. One of the most fundamental is through part-time shifts, which mostly affect women, with three out of four partial contracts signed by female workers. CCOO calculates that these reduced hours explain half of the current wage gap between men and women.

They work fewer hours than men, with more presence in full-time jobs, so they earn less, but the unions ask to delve into the causes of these part-time hours. “49% of women who work part-time say they do so because they couldn’t find a full-time job,” warned Carolina Vidal, CCOO’s Secretary for Women, Equality and Working Conditions. Another 14% have these days “voluntarily” – “in quotes”, Vidal stressed – because they have to take care of dependent family members and another 8% point out that they opt for these reduced days to deal with “other family responsibilities”.

The second cause that benefits men’s salaries more than women’s, and triggers the gap, is salary supplements. Although there are salary differences in basic remuneration, the bonuses and supplements greatly increase the distance between what men and women earn per year. The bonuses recognize in many cases masculinized practices, such as presence and physical force, they warn in the unions, which penalizes women.

Finally, motherhood, which triggers the wage gap between men and women from the first child of the couples. The unions call to accompany labor measures in part-time shifts and salary supplements, with other measures that affect care, to prevent women from being weighed down for this reason in their professional careers.