IWD 2021: Collective bargaining and the gender pension gap

This blog was written by Mehak Dugal, Fórsa Communications Unit, for Fórsa’s International Women’s Day series.

More women are working now than ever before in history. This means more women in employments where it wouldn’t have been possible before.

Women have been part of the workforce for the longest time in Ireland, but historically have always been concentrated in lower paid professions. The turn of the 20th century saw them enter previously barred areas of the workforce. Yet, when the time came for marriage, they had to give up their work in civil service, banks and other professions. Yes, even in trade unions. This was up to the 1970s. Even on the few occasions they were allowed back after marriage it was on less favourable terms.

Fast forward to 2021 when women are found in almost every workspace and make up a massive portion of the workforce. Yet there continues to be a mulish gap between the average male and female wages.

Whether it be due to occupational segregation, reduced labour market attachment or discrimination in recruitment, training or pay systems, women continue to be on the lower end of the wage gap. And while female employment continues to rise every day, the increase is often in low-paid roles in the health, childcare, education and retail sectors, further widening the gap as more men continue to take up senior positions and leadership roles.

Women are also more likely to take more absences and breaks from work often due to caring responsibilities, and this ends up impacting their earnings, promotions and ultimately pensions.

We at Fórsa are choosing to challenge another often overlooked consequence of this gap, which continues to impact women long after they stop working.

In Ireland, women earn 86 cents for every €1 men earn. The 14% gender pay gap further compounds the pension gap faced by women later on.

Research cites many factors for their contribution to the gap, one of the biggest ones being the higher involvement of women in part time work and in important unpaid tasks such as caring responsibilities, including child minding and elder care.

Research from the ESRI shows that the gender pension gap in Ireland stands at 35 percent. The gap emerges due to differences in incomes from private and occupational pensions. Where 55 per cent of retired men received a private or occupational pension, this compared to only 28 percent of women receiving the same. Lower years of work experience among women was a large contributory factor to this.

Women are also more likely to be part-time workers, whether it be due to childcare or other commitments. Part-time workers do not always receive full PRSI credits, and consequently receive a reduced state pension. Which is why women are particularly dependent on the State to pay their pension in retirement.

In addition to generally earning less, and more likely to be working part-time, women also have a longer life expectancy increasing their financial precariousness later on in life. The average Irish woman has a greater life expectancy then their male counterpart by three years.

A 2018 survey from Standard Life showed women were also less prepared for retirement than men. The survey also found that a vast majority of women (71%) did not know how to start a pension and almost 90% of respondents also said they would like assistance with their retirement planning.

Give women a voice

When I first heard the infamous quote by Malala Yousafzai “I raise up my voice – not so I can shout but so that those without a voice can be heard,” I thought here’s someone with the right idea about the political representation of women. Which is why it baffled me when the commission that was set up to examine the issue of raising the pension age in the country had zero representatives from the group affected most by it. Where were the opportunities to let women raise up their voice for others? Organisations which directly represented older people and women were left out of this extremely important discussion.

Women continue to be punished for bearing greater caring responsibilities in our society. Any move forward to address the gender pensions gap should consider the time off taken by women for their caring responsibilities.
The Covid lockdown did not help this gap either. The disproportionate impact on caring duties while juggling work for many women further affected their lifetime attachment to the labour market, and thus began the trickle-down effect towards the pensions gap. Women have been worse off during these lockdowns whether it be due to the job losses or reduced working hours, and even the reported spikes in domestic violence. Balancing work and personal life has never been this hard, and the pandemic underpinned the inequalities women face every day.

Worryingly, the lagged effects of the lockdown on the gap remain to be seen.

Older women should not be at the risk of financial insecurity because of a system that unfairly discriminates against them. The massive contribution of women both paid and unpaid must be acknowledged if we have to move forward as a society. This discussion shouldn’t exclude trans women, minority women and women with disabilities either who are often left out of the conversation.

The NWCI states that on average, women’s State pensions are smaller than men’s by more than a third. Meanwhile, six out of 10 women aged over 70 have to get by on the much lower State (non-contributory) pension. Older people living alone are at particular risk of poverty, and 7 out of 10 lone adults aged between 75 and 84 are women. Further, older women living alone in rural Ireland are, on average, €57.65 short of what the minimum essential standard of living is.

Taking all of this into account, it means that older women are tasked with navigating their own financial security in their later years. Moving forward, any policy on the matter must consider how men and women differ in their approach when it comes to financial choices. In the end, why must women continue to be punished for the care that they provide?

New Directive

A draft law published by the European Commission last week to publish gender pay gap for firms with more than 250 workers is a welcome initiative, but it needs to be taken a step further. At present, it only calls on employers to publish details of the gaps and include definitive reasons for any obvious gaps, to promote greater transparency. But it does not call on them to actively take measures to reduce the gap.

Congress has also called on Minister O’Gorman to progress the long-awaited Gender Pay Gap Information Bill as a matter of urgency.

This gap cannot be fully closed until specific measures are introduced to tackle the systemic issues that impede equality. Individuals, employers and trade unions all need to unite in their efforts in choosing to challenge this issue head-on.

Research shows policy measures to increase women’s employment levels and ensure increased continuity in employment are the two pillars to reduce the gap in pensions later on. When women face breaks in their career, the best practices to facilitate their return to the workforce should be looked at. The lack of adequate availability of affordable childcare adds on to this problem. The discussion has to be extended to the provision of childcare support and affordable care services if real change has to happen.

We have the opportunity now to make change happen. The Pensions Commission set up to make recommendation on the issue has a real chance to address a range of issues including the low levels of financial literacy among the older population, and help promote financial security.

It is time to #ChooseToChallenge and introduce measures to supplement pension savings for women, so that Irish women don’t have to wait generations for basic equality even in their old age.

Mehak Dugal

Fórsa Communications Unit