Equal Pay Day: Women still earning 10.5% less per hour than men in the Netherlands

The gender wage gap in the Netherlands is shrinking. This year, women earned an average of 10.5 percent less per hour than their male colleagues. Last year, the difference was 12 percent. Based on the gender wage gap, Equal Pay Day falls on November 24 this year, ten days later than last year. But the improvement is due to factors other than less discrimination, experts told NU.nl.

On Equal Pay Day, women symbolically stop getting paid for their work for the rest of the year, while men continue to receive pay. If there were no wage gap, Equal Pay Day would fall on December 31.

Men’s higher hourly wages can partly be explained by higher positions and more experience, but this does not cover the entire difference. The wage gap in annual income is even higher, mainly because women work fewer hours. Per year, women earn an average of 32 percent less than their male colleagues.

The decrease in the wage gap this year is not the good news it seems on first glance, experts told the newspaper. The main reason for the decrease is a significant increase in minimum wage, not less discrimination. Many female employees earn minimum wage or slightly more. While more men are working at or around the minimum wage, there are also many men who earn much more. This is not the case for women. As a result, the average income of men rises less rapidly than women’s when the minimum wage increases.

The wage gap only emerges in the age group 35 to 40. According to Statistics Netherlands (CBS), this is due to more women being highly educated. For young women entering the workforce for the first time, their education level plays a significant role in determining their salary,” CBS economist Peter Hein van Mulligen said. “Later, work experience becomes more important, and men catch up.”

The “motherhood penalty,” demonstrated by Nobel Prize winner Claudia Goldin, plays a part in that. In general, new mothers work fewer hours while new fathers don’t. But Goldin found that the average hourly wages also decrease when women become mothers, while the opposite is true for new fathers. This also occurs if fathers’ work hours decrease slightly.

“It’s crucial that companies investigate which differences are caused by factors like education, position, and experience,” ABN Amro economist Gerarda Westerhuis told the newspaper. “The remaining difference must be attributed to discrimination, which often occurs unconsciously.”

A new European law aims to reduce the wage gap between women and men. The Gender Pay directive requires companies to disclose income differences between female and male employees performing comparable work. Starting in 2027, large companies in the Netherlands will be required to take action if the gender wage gap exceeds 5 percent.