Draghi Gives Italy 10 Years to Close Its Wide Gender Pay Gap
(Bloomberg) -- First the good news: under a new gender equality plan drawn up by Mario Draghi’s government, men and women in Italy will finally have the same earnings and employment potential. The bad news is that it’s going to take another ten years.
By 2026, when the European Union’s recovery plan is due to be complete, “we will have reached a point of no return to close the pay gap,” Elena Bonetti, minister for family and equal opportunities, said in an interview in Rome. “We expect Italy to enjoy complete gender parity by 2030, including for salaries.”
Bonetti, from the Italy Alive party, expects the earnings differential between men and women in the private sector to fall from 17% to 10% by 2026, before gradually disappearing completely.
On the pay front, Italy is already faring better than other European countries such as Austria and Germany. But the nation has the lowest rate of female workforce participation among advanced economies, with only 55% of women counting as active players in the job market compared with 73% for men, according to statistics agency Istat.
“There is a long, long road ahead,” President Sergio Mattarella said Monday in reply to an 11-year-old girl who asked if her generation will ever see complete gender parity.
For Draghi, the progress will be measured in years. His government is in the midst of drafting a three-year plan to boost gender equality, and the priority is to attract women to the job market with a focus on entrepreneurship, Bonetti said.
“Today, only 22% of companies are run by women,” the minister said. “The plan is to increase that to 30% by 2026 with a cross-sector strategy that will create jobs for women both in private companies and in the public administration.”
According to a draft of the program, one area where the government is targeting improvement is digital skills, with a goal to increase the rate of digital competency among women to 35% from 19% by 2026.
The government isn’t counting solely on its future plans, however. The Draghi administration is already taking other steps to close the gap.
A new decree approved last week requires that at least 30% of new hires by companies bidding for tenders financed by European Union funds be women under 36 years of age.
Boosting female engagement in the economy isn’t just a matter of social justice, but is necessary to offset the negative impact on growth from a shrinking and aging workforce, a report by UniCredit points out. Italy has been one of the countries hit hardest by the pandemic, with an economic contraction of 8.9% last year.
“Italy needs to boost its labor force participation rate to compensate for unfavorable demographic trends,” economists at UniCredit wrote in the May 27 report. “The bar is not too high considering that Italy has the lowest participation rate of all OECD countries.”
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