The Wage Gap: Iceland's on Board, but Where Are We?

By Victoria Robertson on March 30, 2017

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According to a recent New York Times article, the wage gap has been a serious problem not only in the U.S. but globally.

That is, until now. At least, for Iceland.

The country has been battling income equality for quite some time and has recently implemented a 5-year plan to close that ever-prominent wage gap.

According to Frida Ros Waldimarsdottir, chairwoman of the Icelandic Women’s Rights Association, “For decades, we’ve said we’re going to fix [the wage gap]. But women are still getting lower pay, and that’s insane.”

The Icelandic government agrees.

Tuesday of this week, Iceland was the first country to introduce and pass a bill that will require employers to prove men and women are being paid equally. This is a pretty radical bill, but for good reason.

Bills had been pushed in the past in an effort to reduce the wage gap, but essentially, there wasn’t any change. So, the goal is to apply far more forceful tactics to achieve this daunting task.

According to Thornsteinn Viglundsson, social affairs and equality minister in Iceland, “We want to break down the last of the gender barriers in the workplace. History has shown that if you want progress, you need to enforce it.”

This makes Iceland a frontrunner in terms of gender equality. In the past, they have implemented gender quotas on boards and parental leave for both parents of newborns.

Essentially, Iceland is one of the fairest countries out there at the moment. Still, they continue to battle the wage gap (which is reflective of how big this problem really is).

According to the Icelandic government, women are earning 14 to 20 percent less than men at this point for the same job. So, the goal is to close this gap within a five-year time span, which will hopefully influence other countries to do the same.

According to the International Labor Organization, the wage gap is a global issue, and if it continues to accelerate at this pace, it won’t be closed for 70 years.

This bill has an “equal pay pilot program” where women are now being sought out for higher level jobs than originally hired for due to discrimination. This will definitely be a big factor in closing that gap.

Of course, not everyone is in total agreement.

According to Halldor Thorbergsson, director general of the Confederation of Icelandic Employers, “Companies should [impose equal pay standards] for their own benefit and the benefit of their employees. But it should not be legalized.”

And Iceland isn’t the only country with individuals and businesses against government intervention. This list also includes Britain, Austria, Belgium, Switzerland and, of course, the United States.

But something has to be done — and women in Iceland are pushing for change — not just in their country, but globally as well.

In the ’70s, 90 percent of working women left their jobs and their homes to show what would happen to society without women in the workforce.

This then led to the world’s (yes, the world’s) first elected female president (by a democracy), Vigdis Finnbogadottir. She was elected in 1980.

In the U.S., this is still not a reality.

Over half of Iceland’s Parliament is now filled with female members. Women also make up 80 percent of board members in Icelandic companies.

And yet, there is still inequality.

Women aren’t making as much money, and they aren’t in those top-level management positions held almost exclusively by men.

So what are the rules being implemented in Iceland?

Iceland is going to require larger companies to undergo audits (beginning next year) to show compliance with equal pay. All businesses with over 25 employees must begin the same audits by 2022.

This will be broken down by every job (low to top level positions) identifying and fixing the wage gaps for each individual occupation.

Yes, this is a long, arduous process that’s going to take quite a bit of time and money. But it’s a necessary evil to correct an issue that’s been plaguing the world for far too long.

According to Arni Kristinsson, managing director of BSI Iceland, “The question is, are companies committed? At firms that are, we are already seeing the pay gap narrow.”

This narrowing has decreased to nearly 3 percent for some companies.

According to Snorri Olsen, Iceland’s Customs director, “There’s a tendency to look at work usually done by men as more valuable. This is technically a discussion of equal pay, but it’s really a question about equality in our society.”

And that’s shown in the way women act in the workforce as well. Typically, women negotiate lower salaries than their male counterparts, and men are four times more likely to ask for a raise. And even when women are comfortable in asking for a raise, they ask for 30 percent less (on average) than their male counterparts.

According to board member/owner, Anna Kristin Kristjansdottir, “You’d be sitting there doing the interview, and they’d ask for less. The audit showed this was a flaw in our recruitment, that we were allowing this to happen and didn’t quite realize it.”

And really, that’s what it comes down to.

As a society, we are so used to valuing women’s work as less than men’s (even in seemingly equal positions) that we don’t even realize when it’s right in front of us.

This is what makes closing the wage gap so difficult — it’s very hard to detect without such drastic interventions as time and cost consuming audits. Again, this is about far more than a wage gap — it’s about equality as a whole.

And as a society, our perception of equality is completely off. Just because you feel equal doesn’t mean that’s the case.

According to Viglundsson, “When it comes to the workplace, men have enjoyed a certain level of privilege for a long time. But if you look at the vested interests for society of eliminating discrimination against women, that far outweighs any regulatory burden.”

Basically, we can all learn from the Icelandic government. It’s going to be a long battle, and it’s going to be costly, but in the end, it’s going to be completely worth it.

An equal country in terms of gender — can you imagine?

One small step for Iceland, a giant leap for equality worldwide.

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