Iceland may be a popular stopover destination for travelers flying to the United States, but when it comes to the gender pay gap, it’s worlds away. Whereas American women were paid 18 percent less than their male colleagues doing similar work in 2013, according to the last comparable study, the “unexplained pay gap” was just 5.7 percent in Iceland — and it’s about to shrink further.
On Monday, a new law took effect in the country, designed to publicly shame companies seen as discriminating against women in terms of pay. Companies with more than 24 employees will now need to obtain governmental certification that female employees are paid equally for the same work their male colleagues are performing. The law comes after previous legislation prohibiting discrimination by employers failed to close the pay gap — though it did decrease it by over 2 percentage points since 2008.
Potential job applicants could check to see whether a company is certified before applying, and those not could be exposed in the media or on social media. A failure to obtain certification could also make it easier to fine companies over gender pay gaps which have been prohibited in the country for years. So far, sanctions could rarely be enforced due to the lack of a mechanism to compare wages adequately.
U.S. Sen. Bernie Sanders (I-Vt.) took to Facebook this week to demand the introduction of a similar mechanism in the United States. “We must follow the example of our brothers and sisters in Iceland and demand equal pay for equal work now, regardless of gender, ethnicity, sexuality or nationality,” wrote Sanders. “As we fight back Republican efforts to revert women’s rights to second class, it is important to not lose sight that our real goal is to move forward and expand women’s rights,” he concluded.
Iceland’s then-social affairs minister Thorsteinn Viglundsson sounded similarly excited when the law was proposed early last year. “The time is right to do something radical about this issue,” Viglundsson told the Associated Press at the time.
But how much of a role model is Iceland’s latest attempt to eradicate the gender pay gap?
While the measures may be unprecedented, they probably won’t be a silver bullet, either.
Passed by Parliament last year, the new law has been in the works for several years. Researchers created a complicated model to make salaries comparable, even if official job requirements or work schedules may differ on paper. Governmental auditors will examine all companies with more than 24 employees over the next four years.
The new law is conceived as a mandatory and government-enforced version of other public shaming efforts already introduced in other countries, as my colleague Jena McGregor wrote last spring when the law was first proposed:
British companies with more than 250 employees will be required by law to publish four figures each year on their web sites and on a government site, but they will provide the information on their own, without providing certification. Each company will have to share its gender pay gap, gender bonus gap, the proportion of men and women receiving bonuses, and how men and women rank in terms of pay within the organization.
In Switzerland, companies can apply to have their equal pay “certified” by an outside party without disclosing confidential information, but it is not mandatory. In Minnesota, after a law was signed in 2014, certain state contractors must obtain an “Equal Pay Certificate” from the state before executing a contract.
While a growing number of states have strengthened their protections for employees with new equal-pay laws, with California even requiring companies to prove they pay men and women equally for similar jobs, companies don’t have to disclose the information publicly. Companies that want to become federal contractors have to share summaries of their pay data with the government, but again, the data isn’t published.
Even if Iceland’s new law succeeds at closing or significantly narrowing the gender pay gap, critics have pointed out that other factors are still holding women back. Although both men and women in Iceland are granted three months of non-transferable child-care leave, few men opt to take it. And women are still far more likely to interrupt their careers to dedicate more time to their families than men.
"(The) certification requirement might help root out the ‘unexplained gender pay gap,’ but is unlikely to reduce the larger ‘explainable pay gap’ (for example due to differing working hours in paid work),” concluded Stefán Ólafsson, a researcher with the University of Iceland, in a summer 2017 report for the European Commission. In total, women still earn 22 percent less in Iceland than men, even though those numbers also include women working part-time or not at all.
Mandatory child-care leave for both men and women would be a more radical step, critics of existing legislation say, even in a country such as Iceland, which regularly tops equality rankings. Already about four decades ago, women made gender equality a political priority in Iceland by going on strikes. Today, many of their former demands are considered to be self-evident as schools offer gender studies classes that attempt to make students more aware of everyday discrimination and prevailing stereotypes. The country’s prime minister, Katrin Jakobsdottir, is an avowed feminist who has been pushing for tougher legislation since coming to power in November.
But Jakobsdottir’s government may be an outlier for a global movement that has recently suffered new setbacks. Since 2006, the World Economic Forum has attempted to measure whether women are facing more or less inequality in the world. And last year, for the first time, it said that things were getting worse again.
The report’s authors concluded that fewer women were participating in the workforce than in previous years, and that salaries were growing less equal again. Although Iceland’s deadline for companies to comply with their regulations runs out in 2021, it will likely take more than two centuries to close the pay gap globally, the researchers calculated.