How Belgium is defeating the gender pay gap

Britain's neighbour has made substantial progress on its gender pay gap in recent years. But how?

In Britain this week, larger companies are having to make their gender pay gaps public for the first time. But just over the Channel in Belgium, transparency on how much men and women are paid has been standard for years.

Belgium has one of the very lowest gender pay gaps in both Europe and the OECD, beating out countries with a more world-renowned reputation for gender equality, like Sweden, the Norway, and Iceland.

The latest 2017 figures from the OECD show the median monthly wage of a Belgian man is 3.3 per cent high than a Belgian woman – compared to an average gap across the EU of 19.2 per cent. In the public sector, women are actually paid more on an hourly basis.

Belgian pay wasn’t always so equal – the gap has closed rapidly in recent years – from 13.6 in 2000, 11.5 per cent in 2005 and 7 per cent in 2010. Moving towards equal pay has been a deliberate government policy for decades, and one thing that has made progress easier is having some of the highest and growing levels of trade union membership in Europe.

Around 55 per cent of all Belgian workers are in a trade union – but an estimated 96 per cent of workers are covered by the collective bargaining agreements they sign. This means that instead of individually negotiating your salary with with your boss, there is an agreed framework for who is paid what based on what they do. Wage increases are also indexed to the cost of living, so workers don't have to actively ask for a pay rise just to stand still.

As a result of this approach to setting pay, practically all workers’ wages are set by collective agreements, which apply irrespective of gender and don’t discriminate against women. The stricter framework for setting salaries essentially makes it impossible to pay women less to do the same job.

“Belgium is characterised by comprehensive collective wage setting,” economists Ive Marx and Lien Van Cant from the University of Antwerp say in a paper that examines the gap, adding that “a clear link can be made with trade union representation” and lower wage gaps.

“The Belgian experience provides a powerful antidote to views that growing inequalities are inevitable in advanced economies.”

But while widespread collective bargaining on wages has in itself most likely helped Belgian women get closer to equal pay, the Government has also taken things a step further.

In 2012 a new law made it mandatory for the gender pay gap to be specifically taken into account when unions and employers negotiate their wage agreements. The law also requires the Federal labour service (SPF) to check and sign off job classifications on the basis of their gender neutrality.

Rules on which companies have to reveal their gender pay gap – introduced years earlier than the UK – are also stricter. Here, companies with over 50 workers must report every two years; in the UK only bigger firms with 250 employees have to comply.

The results of the policies speak for themselves, though the gap hasn’t yet been completely eliminated. What remains of a pay difference is often blamed on the finance and insurance sectors – the highest waged bits of the Belgian economy – which tend to be dominated by men, especially at the highest level, where there is a glass ceiling.

“Although Belgium has a relatively small gender pay gap in comparison to other EU countries, this gap is very resilient, considering the many years equal pay has been at the heart of labour and equality policies,” Dr Hildegard Van Hove of the Institute for the Equality of Women and Men wrote in a paper. She also says Belgium’s “highly collectively regulated wage-setting mechanisms” are relevant to understanding the progress made.

Britain lags far behind its neighbour, with a wage difference topping 9 per cent in the latest figures. Britain's hands-off wages policy gives the Government fewer levers to pull: with unions in the UK now almost entirely relegated to the public sector and collective bargaining agreements something most workers now never enjoy, gender equality may be lot harder to come by.

The work isn’t over in Belgium either, where women are still under-represented in management and tend strongly towards part-time work. But the lesson from Brussels is probably that if you want to close the gender pay gap, join a trade union.