Chile: Goodbye to the gender wage gap?

SANTIAGO, Jun 6 (IPS) – Gabriela, 32, is delighted with Chile’s new law establishing equal wages for men and women doing the same work. But the discrimination she has experienced in the workplace makes her wary of premature optimism.

On May 20, the Chilean parliament unanimously approved the law to close the wage gap, introducing the principle of equal remuneration for men and women into the Labour Code.

The following day, in her traditional state of the nation speech to Congress, socialist President Michelle Bachelet praised lawmakers for passing the law.

‘The law on the wage gap will promote something that is deeply felt by all of us: that the men and women of our country should receive equal pay for equal work,’ said Bachelet, who signed the bill into law on Jun. 2.

According to the National Institute of Statistics, women workers in Chile earn on average 31.1 percent less than men. But among professionals, the wage gap is as high as 49.8 percent, according to the Labour Directorate.

The law states that employers must abide by the principle of equal remuneration for men and women who do work of equal value. However, differences in pay based on objective grounds, including employee skills and qualifications, fitness, responsibility or productivity, ‘shall not be considered arbitrary,’ it says.

Workers who feel they are victims of gender-based wage discrimination must first complain in writing to their employer, who has 30 days to reply in writing, according to procedures which companies must incorporate in their internal regulations.

If the employee is not satisfied, he or she may then take the grievance to the courts.

This will be easier under the new labour justice system that will introduce expedited oral public trials with expert legal defence for low-income workers. It has been gradually installed since March 2008, and will come into force throughout the country on Oct. 30.

The wage gap law, introduced by one female and nine male lawmakers in July 2006 with strong support from the Bachelet administration, is a first for Latin America, National Women’s Service (SERNAM) Minister Laura Albornoz told IPS.

Similar measures have been taken in Quebec, Canada and in the European Union, but there are no known laws in this region with penalties against the wage gap, like Chile’s, said Albornoz, who is president of the Organisation of American States’ (OAS) Inter-American Commission of Women.

Gabriela (not her real name) has experience in human resources and works as head of projects for a Latin American transnational corporation with branches in Chile.

Although she has been with the company for less time than the other managers, all of whom are male, Gabriela says she feels discriminated against, not just in terms of salary, but because she is a woman.

‘The other managers are paid more than twice what I get, and they have flexible hours and go out on field work. They get bigger budgets for their work, they are given cell-phones and can use rented cars. I am not invited to meetings with suppliers, and when they launch new projects they don’t tell me about them. But I am a manager, so I am answerable as much as they are, in spite of all the hurdles,’ she told IPS.

Gabriela is pleased that the law has been passed, but she fears that companies will seek out loopholes to avoid complying with it. One of the main problems, she said, is the lack of a company flow chart specifying positions, functions and salaries.

Generally, the only way to compare salaries with colleagues doing the same work is by means of informal conversations. But it is a sensitive topic and not everyone is willing to talk about it, she said.

To overcome this, the new law requires companies with more than 200 workers to draw up a register specifying their positions, functions and essential technical qualifications. However, small and medium businesses, which account for 80 percent of employment in Chile, are exempt.

SERNAM is about to launch a programme to support the creation of organisational charts and job descriptions in smaller businesses.

Albornoz pointed out that the law on access to public information that came into effect on Apr. 20 requires the salaries of all state authorities and public employees to be published.

Trade unions may also play a crucial role, because the law allows them to bring complaints for non-fulfilment of the principle of equal pay.

Although union membership is low in Chile, Albornoz said that it increased by 28 percent in 2008 among women workers, compared to only four percent among men.

As an incentive, companies that are in full compliance with the wage gap law will be entitled to request a 10 percent rebate on any outstanding fines for labour matters, except for anti-union practices or violations of basic rights.

‘We are happy that the law has been approved, because the areas where women in Chile are clearly discriminated against include, precisely, employment opportunities and wage levels,’ the head of the non-governmental Corporación Humanas, Lorena Fries, told IPS.

‘We also think that this step could lead to other changes,’ she said. ‘If salaries are on an equal footing, and a moment of economic crisis like the present one comes along, women need not be the first to be ‘expelled’ to their homes. Instead, the costs could be shared between men and women.’

Teresa Valdés, coordinator of the Observatory on Gender and Equity, also said the law was a major stride forward. But ‘it will have to be assessed case by case, taking one step at a time,’ she told La Nación, a local newspaper.

‘For instance, in some companies two people have different job titles, but do the same work. It remains to be seen how discrimination can be proved in that case, and how much negotiating power a woman – who is being paid less – has when she confronts her boss to ask for equal pay, or when she takes him to court,’ she said.

Fries acknowledged it as a failing that the law does not oblige small and medium businesses to draw up a flow chart, but she emphasised that although it is not perfect, the law ‘establishes a benchmark that there will be no going back on in the future.’

Minister Albornoz hopes not only that companies will implement the principle of equal remuneration, but that it will also become a standard demanded by consumers.

Chile has one of the lowest rates in Latin America of female participation in the workforce: in 2008, only 41.6 percent of women of working age were economically active.

One of the reasons Chilean women give for not entering the world of work is the low wages they are paid, according to the second Barómetro survey on Women and Work 2009, released on Apr. 28 by ComunidadMujer, a private not-for-profit organisation.

Behind the wage gap are mistaken cultural beliefs that assume that women are less productive, and go out to work so that their family can have a ‘second income.’ But in Chile, working women are the chief breadwinners in 31.5 percent of households.

Moreover, eliminating the gender wage gap in Chile could reduce extreme poverty by eight percent and raise average per capita income by two percent, according to a study by the World Bank and the Inter-American Development Bank in conjunction with SERNAM.