German Women, Economy Stuck at Glass Ceiling

UNCLAS SECTION 01 OF 03 FRANKFURT 008141

SIPDIS

DEPT FOR S/WE AND EUR/AGS

SIPDIS

E.O. 12958: N/A
TAGS: SOCI KWMN ECON ELAB PGOV GM
SUBJECT: German Women, Economy Stuck at Glass Ceiling

REF: Frankfurt 4327

SUMMARY
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1. In a city of skyscrapers and boardrooms, the absence of top
female management in Frankfurt is striking -- nor is Frankfurt
unique in Germany. The "glass ceiling" for women in the German
workforce is remarkably pervasive and persistent, fueling Germany's
demographic problems and lowering potential growth. A scant 11
percent of German companies have a woman in management positions,
compared to the EU average of 14% and 40% in the U.S. In terms of
representation in management, balance between work and family,
compensation, social acceptance, and entrepreneurship, German
businesswomen face serious handicaps and arguably one of the lowest
"glass ceilings" in Europe. The primary sources of this gender gap
are institutional (Germany's shortage of day-care facilities and the
constraints of half-day K-12 schooling) and societal (working
mothers are often seen as bad parents). In a country of shrinking
population and opportunity, forcing women to choose between career
and family only compounds Germany's economic and demographic
challenges. END SUMMARY.

Corporate Boards: A Man's World
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2. A country led by its first-ever female chancellor (Angela
Merkel),Germany remains the industrialized state with the smallest
share of women in management and the fewest female top managers. Of
Germany's thirty leading blue-chip companies (the DAX 30 Index,
analogous to the DowJones 30 Industrials),only two executive board
seats (out of 197) are occupied by women -- and those only recently:
in 2004, Karin Dorrepaal joined Schering's board, followed by
Christine Licci at HVB in 2005 (note that neither woman is German).
Women -- often from abroad -- are only slowly making inroads in
related economic fields, such as Beatrice Weder di Mauro (the first
woman member of Germany's Council of Economic Advisers) and Lucrezia
Reichlin (Head of Research at the European Central Bank).


3. In terms of overall workforce participation, Germany and the
United States are at par (women hold 46.6% of jobs in the U.S. and
46.5% in Germany),but Germany trails the U.S. in terms of women in
management. Only 21% of German executives and managers are women
(compared to 35.2% in the U.S.),and most German front offices are
male dominions. Women succeed in business in Germany "by sending a
message to the world that they are not interested in a family," said
Bernhard Meyer, owner of Meyer & Associates, a Frankfurt executive
search firm specializing in investment-banking.

Equal Pay and Taxes
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4. Germany is farther from realizing the goal of "equal pay for
equal work" than the United States: German women employed full-time
in private industry earn on average EUR 2,517 ($3,017) per month, or
around 30% less than male colleagues (women in the U.S. earn 24%
less than men for comparable work). This disparity is also
prevalent in the Frankfurt area's flagship banking and insurance
industries where men earn EUR 3,505 ($4,200) per month opposed to
EUR 2,704 ($3,240) for female colleagues. Women often perceive a
disadvantage when it comes to paying taxes as well, since the
marginal gain from a second income in Germany's highly progressive
tax system is often small, especially if a family loses entitlement
to means-tested benefits.

Career vs. Family
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5. The pervasive gender gap at all levels of management in Germany
reflects in large part the persistent incompatibility of career and
family for women. (NOTE: Chancellor Merkel herself has no children
-- END NOTE). As Regine Stachelhaus (Managing Director of
Hewlett-Packard Germany) puts it: "women who want to have a real
career have no choice but to remain childless." The private sector's
commitment to childcare and family-friendly policies, mostly
voluntary, has fallen short: only an estimated 8% of firms have
implemented family-friendly workplaces. Science and research also
show a profound gender gap: the annual "Innovation Indicator"
(published by the Federation Of German Industries/BDI) shows that
Germany lags behind most other developed nations in the
"participation of women in the innovation process" (2006 Report).

Institutional Deficits
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6. Many feel that Germany's welfare state, in "protecting" expectant
women, has fueled informal discrimination and led women to delay or
forego childbearing. Since 1968, German law has barred dismissing
or demoting expectant women; in 1993, guaranteed maternity leave
was extended to two years (later to three),during which time

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mothers were entitled to 3.5 months (total) of full salary. As of
January 2007, Germany will transition to government support payments
of 12 months (or 14 months if the father takes at least two months
of paternity leave). Although forbidden, it is a widespread
practice for bosses to inquire about plans to have children, and are
often reluctant to trust women of childbearing age with long term
projects.


7. Childcare facilities in western Germany are underdeveloped and
give few mothers a viable alternative to staying at home. Daycare
facilities for children under three are rare, especially outside
urban areas, and most only take children between 1 and 3 years. In
Frankfurt, only three centers cover an eight-hour day, enabling a
woman to take on a fulltime job. Even when the child turns three,
where "kindergarten" attendance is widespread, a mother's workforce
availability improves only marginally: most kindergartens operate
only from 9 am to noon; schools likewise close typically at about 1
pm. In this respect, western German states differ from the former
eastern Germany which had a far greater workforce participation of
women (about 90% prior to 1989).

Cultural Prejudice Q "Rabenmuetter" and Gender Politics
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8. That women bear the brunt of childrearing in Germany reflects
cultural prejudice on a level beyond its Western European neighbors.
Many Germans -- men and women -- frown upon mothers who return to
work at the cost of spending time with children. Barbara
Schaeffer-Hegel, founder of the European Academy for Women in
Politics and Business (EAF),argues that the motherhood ideology of
the Nazi period left a deep impression on post-war attitudes towards
working women: "The word 'Rabenmutter' (loosely translated as "bad
mother" with latchkey kids) only exists in Germany." (In other
European countries such as France, mothers who are professionally
successful appear to bear little or no social stigma).


9. The "Rabenmutter" term comes from the fifties and sixties, when
women returned home after working out of necessity during WWII and
post-war rebuilding. It was considered an achievement that women
could stay at home and a sign of social advancement ("my wife does
not have to work"); few thought that women would seek careers. As
a result, much of Germany's institutional system (education, taxes,
and so on) is designed on the presumption that mothers stay at
home.

Women-Owned Businesses
--------------


10. With the hurdles facing women in traditional firms,
entrepreneurship can be a conduit to success. (In the U.S., the
number of female-owned firms increased two-and-a-half times faster
in the 1990s than all U.S. businesses. Employment in these firms
grew more than three times and payroll grew at almost twice the rate
for all firms). This trend is lacking in Germany. While currently
about 12% of German male workers become entrepreneurs, only half as
many women do. One company in four is founded by a woman --and
women fail less often than men on their way to entrepreneurship--
but only 10 to 15% of technology-based enterprises are owned by
women. Women entrepreneurs may face difficulty in raising capital
due to lack of experience reflecting workplace inequities. Founded
in December 2003, the German Agency for Women Start-Ups (BGA) does
counsel and support women in setting up businesses.

Policy and Politics
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11. "Poster Mom" (mother of seven) and federal Minister of Family
Affairs Dr. Ursula von der Leyen (CDU/Christian Democratic Union)
has spearheaded proposals to help reconcile career and family for
women, including new financial incentives and improved child care
availability. A key proposal is to shorten maternity leave to 12
months and to tie maternity benefits to the mother's previous
income. As a result, higher-income families might have more children
while the shorter maternity leave of one year would impel mothers to
return to work sooner and reassure employers that maternity does not
mean losing qualified personnel indefinitely. (The changes would
also favor the CDU base -- namely higher-earners and companies). The
Ministry of Labor and Social Affairs, under Vice-Chancellor Franz
Muentefering (SPD) includes gender equality and work-life balance
among its priorities for the German EU Presidency in the first half
of 2007.


12. The issue is standard fare for Social Democrats and Greens in
this region (and elsewhere): although the CDU is modernizing, it
faces an uphill road on the issue after promoting "stay-at-home"
motherhood for decades. CDU traditionalism has eroded the party's
support in urban centers and particularly among young professionals
who view its policies as reactionary or unhelpful to working
families. Only in 2004 did the Hesse CDU change a long-standing
platform that "the right of a child to be raised at home through age

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13. Among the CDU modernizers is new Baden-Wuerttemberg
Minister-President Guenther Oettinger, who has polled well in urban
areas of the large and wealthy state. By twisting arms among the
state's successful companies, Oettinger has managed to increase
significantly daycare availability for under-3 year olds, while
working towards "all-day" public schools by building school
cafeterias and extending the school day. Rheinland-Pfalz
Minister-President (and national Social Democratic Party/SPD
chairman) Kurt Beck has promoted daycare and all-day schools for the
past five years -- but like other state leaders, faces the grim
reality of Germany's high labor costs in any initiative.

COMMENT
--------------


14. As institutional and cultural pressures force women to choose
between motherhood and career, Germany's birthrate has fallen to 1.3
children per woman (the EU's lowest),far below the 2.1 that experts
say is necessary for a stable population. Germany is twenty years
behind EU member states such as Denmark and Sweden, who reacted in
the late 1980s and have significantly reduced the magnitude of their
demographic problem. In any case, a shrinking population will
induce women to join the German workforce in greater numbers and in
more responsible positions. The faster German business and
government can dismantle the glass ceiling, the better the German
economy will perform.


15. This cable was coordinated with Embassy Berlin.

POWELL