Women earn up to €12,000 less than male counterparts

Women in full-time employment on average earn €4,300 less than their male counterparts and in some industries the wage gap widens to almost €12,000, according to a study by the Malta Business Bureau.

The findings result from an economic impact assessment of the EU's proposals to extend paid maternity leave to 20 weeks and introduce two weeks paternity leave.

While saying the proposed measures will cost the economy €12 million, the report concludes they will translate in a new burden on businesses and warned that wage discrepancies will worsen as women become less competitive in the marketplace for jobs.

The findings pour cold water on EU proposals to increase parental leave to ensure a better work-life balance for parents and encourage more women to continue working after childbirth.

The assessment found that extending paid maternity leave to 20 weeks from the current 14 would cost the economy €7.5 million of value-added in a year, equivalent to about 0.2 per cent of GDP. The cost on the private sector would amount to €5.3 million. Similarly, increasing paternity leave to two weeks from the current two days would cost the economy €4.8 million, or 0.1 per cent of GDP, of which the private sector would have to shoulder €3.7 million.

When presenting the findings to Parliamentary Secretary Chris Said yesterday, MBB president John Huber described the proposals as a burden on businesses.

If implemented, they would undermine competitiveness, especially in the domestic context, he added, where 56 per cent of businesses were either micro or small enterprises employing fewer than 49 people.

Citing the dismal employment figure for women, at about 38 per cent, Mr Huber said the proposals would only hinder the employment of more women.

Malta lagged behind the EU where almost 59 per cent of working-age women were employed.

"Businesses and the economy are not in a position to afford the burden of such proposals," Mr Huber told Dr Said in no uncertain terms, while insisting the business community was not against sustainable measures that encouraged employed mothers to continue working.

Dr Said pointed out that the government's position was that the EU should allow member states to implement the proposals as they deemed fit rather than adopting a one-size-fits-all approach.

He noted that one of the biggest issues was who would foot the bill for the additional parental leave proposed by the EU and, while remaining non-committal on the government's stand, he said a balance had to be sought that would not harm businesses.

He said the government had introduced a number of measures to encourage women to continue working and pointed out that 3,652 mothers benefitted from tax deductions when they rejoined the workforce after a lengthy absence or retained their employment after the birth of a child. These mothers saved €3.2 million in taxes.

The European Commission's proposal is to extend maternity leave to 18 weeks. However, the EU parliamentary committee for women's rights is proposing a 20-week period instead. Furthermore, the proposal is to include two weeks of paid paternal leave, an issue the EU has so far refrained from legislating on.

The report also proposes alternative measures such as nursery and day care provision or subsidising such services to allow women to return to the workplace after the birth of their child without the need to rely on the extended family for support.

It also proposes incentives to promote home working practices to allow women to juggle their family needs with meeting work deadlines, without being at their workplace.

Other incentives include encouraging private firms to provide better family-friendly measures, such as on-site nursery care; keeping women on maternity leave informed of work matters; and introducing creative work solutions such as part-time, flexitime, home working, compressed working week, job share, annualised hours, term-time work and shift working.

The report was drawn up with the technical assistance of economists Gordon Cordina and Jana Farrugia. The MBB is made up of the Malta Chamber of Commerce, Enterprise and Industry and the Malta Hotels and Restaurants Association.