Will knowing what your co-worker earns help close the gender pay gap? Finland thinks so

By Alma Fabiani

Published Nov 11, 2021 at 11:59 AM

Reading time: 3 minutes

The Finnish government is currently working on a new law that would allow workers to check what their colleagues are earning if they suspect that they are being discriminated against. This move would be part of the country’s bid to close the wage gap between men and women. Could talking openly about money be the solution to our money problems?

According to Reuters, the bill has been criticised by both workers’ unions, which want even more transparency, and the biggest employers’ organisation—the Confederation of Finnish Industries (EK)—which says it would only create more conflicts in the workplace. Considering the evergreen taboo surrounding money-related topics, both sides of the situation come from a place that most of us can appreciate.

But despite this disagreement, the centre-left five-party coalition of Finnish Prime Minister Sanna Marin is pushing ahead with the legislation. “What is central to the government’s programme is the elimination of unjustified pay gaps,” Equality Minister Thomas Blomqvist told Reuters. “They will now be addressed more rigorously.”

Blomqvist continued by saying that he expects the bill to be passed in parliament before Finland’s elections in April 2023. Finnish women earned 17.2 per cent less than men in 2020, according to a pay equality ranking by the Organisation for Economic Co-operation and Development (OECD).

The survey placed Finland in the 37th position, well behind Norway in 8th, Denmark in 9th and Sweden in 12th, even though gender equality has been high on the political agenda for decades in the country. Yet, the reasons are often similar to those in other western European nations—segregation of the job market into male and female-dominated professions, fathers taking less parental leave than mothers and women not being promoted as often as men.

In an attempt to shrink the wage discrepancy using her own means, Merja Mähkä, a journalist turned investor and blogger, has published her earnings on Twitter and Instagram since 2019, in turn, encouraging public discussions about pay transparency. “There have been situations where I’ve found out that a man doing a similar job to me has been paid more,” said Mähkä of her reasons, speaking on Tuesday 9 November as she published her taxed income of €48,522 ($56,111) for 2020.

Even before these new changes were introduced and approved, Finland already had a special relationship with what most of us know as ‘tax season’. On Monday 8 November, the Finnish tax authorities made public the data of each person in the country, opening the door for a media frenzy of gossip, boasting, and finger-pointing about who has paid their fair share in income tax.

While some might abhor the lack of privacy, the Finnish government believes that making tax information public is necessary for the country’s functioning. Finland’s welfare system, like the US’, is based on taxes, which means that public disclosures reinforce the idea that everyone should contribute.

Although it is transparent, tax day does not give the full picture so many Finnish women are yearning—the tax authority has estimated a person’s taxed income to be on an average 75 to 80 per cent lower than their actual income because of deductions and tax-free dividends.

Drafting the newly proposed bill to combine the different views of the two sides mentioned above has been difficult, leading to its publication being delayed. But Blomqvist told Reuters the bill will soon get the green light, “We will adhere to what we agreed on in the government programme.”

What remains to be seen is whether such a move will truly help close the gender pay gap between men and women in Finland. Though it’s impossible to answer this question without a doubt, I can’t help but think of a money-related conversation I previously had with Alex Holder—journalist and author of Open Up: The Power of Talking About Money—a woman who has been advocating for honest money talk for quite a while now, and who, like Finnish influencer Mähkä, started openly sharing her salary on Instagram a few years back.

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A post shared by Alex Holder (@alexandreholder)

“We all have really pocketed knowledge about money and how much people get paid. We might know about our industry and how much our parents earn but when that knowledge doesn’t stretch out to more people, it affects power dynamics and that’s how unfair pay practices can go unsolved,” Holder told Screen Shot during a 2020 interview.

“Only transparency will help us get to a place where we all speak openly about money and where asking for money advice isn’t shameful but actually normal and helpful,” I continued in the same article. Looking back on these statements, it only seems right for workers to be able to discuss their salaries with colleagues. It’s time for us to destigmatise the way we talk, think and feel about money, be it by talking with friends, partners and business owners or by boldly sharing our salary with the public.

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