Pay transparency prevents unjustified differences in pay, the Finnish labour market’s problem is a strict divide

16.11.2021

Trade Union JHL is demanding pay transparency in the Finnish labour market. Transparency helps reduce differences in pay. It is easier for employees to ask for the right amount of pay when they know what others earn in the same or a similar job. The trade union has recently published a comprehensive study on the subject.

A recent study of the Trade Union for the Public and Welfare Sectors JHL presents many ways of reducing gender pay gaps. In Finland, there is a marked difference in how much men and women earn in a full-time job.

In 2020, women who were full-time employees earned on average more than EUR 600 a month less than men. Although the relative differences in pay have decreased in the 21st century, measured in euros they have actually increased. The information is based on Statistics Finland’s index of wage and salary earnings.

Pay transparency has been increased in several countries, which in many cases has reduced gender pay gaps.

– The pay gaps are difficult to detect, and employees or their representatives do not always have the right to get comprehensive pay information. If earnings are not discussed openly in workplaces, people get their information on pay gaps from the discussion in the media, JHL’s Economist Youssef Zad explains.

JHL will also start to look at how to increase pay transparency in its own operations. This is done in cooperation with trade union employees.

Trade unions and shop stewards are furthering equal pay significantly. Shop stewards should have the opportunity of knowing the salaries of the entire personnel, and all the salary elements. They can then intervene in possible pay discrimination and unjustified differences in pay.

– According to a Canadian study, women’s earnings increased more and pay gaps were reduced faster in workplaces where it was more common to be a trade union member. Trade union membership does not explain everything, but the message is clear: Becoming organised pays off, also because it reduces differences in pay more effectively, JHL President Päivi Niemi-Laine says.

At its best, pay transparency increases competition in the labour market, as the employers that pay a higher salary attract more employees. At the same time, it will improve the effectiveness of the Finnish national economy.

In its study, JHL takes up factors that affect differences in pay. Some reasons are easily detectable, others remain often hidden.

– In order to effectively take action against differences in pay, the actions need to address several individual factors that the differences are made up of. In Finland we should, for example, take steps away from the division of jobs into male and female occupations. To put it simply, Finland needs more male nurses and female coders, Economist Youssef Zad states.

The Finnish labour market is very clearly divided into male and female occupations. This divide can be reduced by, say, attracting men and women to sectors where most employees represent the opposite sex.

In its study on differences in pay, JHL presents the actions that can be taken to reduce the differences. Anonymous recruiting could help women advance to positions with a higher level of pay, because it would be more difficult to discriminate applicants based on gender.

Fixing the issue of pay gaps also requires changes to the policy concerning families with children. According to research, having children reduces the level of pay for women. When fathers spend as much time parenting as mothers, it is an effective way of preventing differences in pay.

Summary of JHL study on differences in pay

More information:

President Päivi Niemi-Laine 040 702 4772
Economist Youssef Zad 050 4754 055