January 03, 2018

In Iceland it’s now illegal to pay women less than men

In Iceland it’s now illegal to pay women less than men

On January 1 Iceland brought in legislation that made it illegal to pay men more than women—an inequality that exists in almost every country.

Eliminating legal discrimination against women, and promoting policies to counteract discrimination and cultural social norms that, in many countries, have traditionally assigned women subordinate roles should be critical policy goals,” writes Mario Macis in his article Gender differences in wages and leadership.

Under the new law companies and government agencies employing at least 25 people will have to obtain government certification of their equal pay policies. Those that fail to prove pay parity will face fines.

“The legislation is basically a mechanism that companies and organisations [will use] to evaluate every job that is being done, and then they get a certification after they confirm the process if they are paying men and women equally,” commented Dagny Osk Aradottir Pind, a board member of the Icelandic Women’s Rights Association.

Iceland has been ranked by the World Economic Forum (WEF) as the world’s most gender-equal country for nine years in a row. The Icelandic government aims to close the country’s gender wage gap by 2020, a goal that seems plausible given their current rate of change. In 2016, Iceland had closed 87% of its gender pay gap. For comparison, in the US the gender pay gap is about 20% but is significantly higher for women of color.

Iceland scores well on almost every front of gender parity. It closed its health and education gender gaps many years ago, 50% of its parliament members are women, and it has had a female president for 20 of the past 50 years.

According to Saadia Zahidi, head of the WEF’s gender equality campaign, the factor that most contributes to Iceland’s narrowing gender gap is women’s economic participation.

“It’s obviously a very small economy and talent, human capital, is very precious,” Zahidi tells Quartz. “And so I think they have taken the approach where you don’t want to be wasting any of that talent, and you want to ensure that both women and men are able to combine their family or social obligations along with their ability to work.”

“Women’s labor market activity makes women and girls more economically valuable to their families and to society,” writes Anne E. Winkler in her article Women’s labor force participation. “Given societal benefits such as greater economic growth, governments have a compelling interest to undertake policies to encourage women’s labor force participation. Parental leave and childcare subsidies are two such examples.”

Read further articles on the gender divide.