In most countries, men and women doing the same work earn different amounts. This discrimination is popularly known as the gender pay gap. And despite efforts to close it, particularly amongst advanced industrial countries, it persists. Part of the problem is that policy solutions to eradicate unequal pay have focused on changing individual workers’ behavior. More often than not, women are tasked with entering male-dominated professions; or female employees are expected to more effectively assert themselves in the workplace. There may be a better way.
How Iceland Is Closing the Gender Wage Gap
Iceland’s equal pay for equal work system is still in the early stages, but initial signs suggest that requiring organizations prove they compensate employees fairly may be very effective. Much more effective, in any case, than the alternatives currently in place elsewhere. Introduced in 2018, the policy requires companies and institutions with more than 25 employees to prove that they pay men and women equally for a job of equal value. If companies show they pay equally for the same positions, they receive certification. Beginning in 2020, certification became a requirement and companies without certification incur a daily fine. The few issues that have thus far emerged, such as the burdensomeness of the process for managers, are start-up problems, moreover, not long-term consequences. And what’s more: the system has stimulated both-in-firm and societal discussions about how jobs are valued, based on what criteria, and whether these criteria are still relevant in the current society and labor market.