Australia’s gender pay gap is widening, with women continuing to consistently earn less than men.
Last week, the Federal Government released an Australia-wide analysis of the gender pay gap in this country. And let me tell you, the data was bleak (for women).
The Report, produced by the Government’s Workplace Gender Equity Agency (WGEA), reveals the disparity in the wage differential between men and women in the private sector. In summary, women are consistently earning less than men, across every age bracket.
The report, Wages and Ages: Mapping the Gender Pay Gap By Age, shows that as women get older, and more senior in their corporate roles, the wage difference compared to men, just gets bigger (or in more realistic language, worse).
So for example, when women turn 35, they will be earning $7.78 in every $10 their male counterparts earn. This disparity worsens over the subsequent 20 years. By age 65 there’s some improvement, but never do the wages of men and women in Australia reach parity.
It’s so depressing.
Let’s take a look at why this is happening in Australia, and some of the strategies forward-thinking companies are adopting, to overcome these gender wage differences.
Economists have reported that raising children accounts for a 17% loss in lifetime wages for women. Once children are born, men’s paid workloads and incomes usually remain stable, while women may work part time and experience a decline in salary and superannuation.
The cumulative loss of earnings women experience usually becomes irreversible across a woman’s lifetime, regardless of subsequent paid employment.
Source: WGEA
Gender Pay Gap: The Root Causes
There are a number of issues driving the gender pay gap in Australia. Unfortunately, much of the reasoning resides in the cultural issues across Australia’s workplaces.
There are historic and systemic issues at play here. Historically, the contribution of women in the workplace has been undervalued compared to that of men. This creates barriers to women’s progression, which in turn leads to the under-representation of women in more senior roles.
According to the report, the major factors contributing to the gender pay gap include:
- The fact that women tend to work in more part-time roles, than men
- Conscious and unconscious discrimination and bias in hiring, promoting and pay-related decisions in the workplace
- Women and men are represented differently across industries. And more women tend to work in industries that attract lower wages
- There continues to be a lack of flexibility in the workplace when it comes to accommodating caring and other family or related responsibilities. This is especially so for senior roles
- Women spend more time outside of the workforce undertaking caring responsibilities. This impacts their career progression and other professional opportunities
- Women shoulder a disproportionate amount of unpaid caring and domestic work
Caring occupations and industries in the healthcare and social services industries attract lower pay than occupations in the construction industry. Male dominated industries also offer significantly higher levels of discretionary payments, such as over-award payments, bonuses, commissions, shift allowances and profit sharing payments compared to female dominated industries where there is little or no access to these kinds of payments.
Source: WGEA
What is the Current Gender Pay Gap?
Here’s a look at the statistics which have come from the ‘Wages and Ages’ report:
In summary:
- The gender pay gap favouring men exists across every age group. The WGEA data shows that the gender pay gap is 2.5% for employees under 24 years old, and it increases at a constant rate before peaking at over 30%, an earnings difference of over $40,000 per year, for employees ages 45-64.
- Although women complete higher education and enter the labour market at a higher proportion than men, they are still substantially less likely to work full-time across all age groups and less likely to reach the highest-earning levels.
- To attract and retain talent from diverse backgrounds and of all ages, employers must offer flexible working arrangements, be creative about what it takes to be a leader and create part-time management roles.
It is true that many women willingly choose to work part-time to balance paid work and caring commitments. However, the ‘choice’ for the woman to work part-time is often skewed by the fact that men tend to earn more than women and have less access to flexible work arrangements and paid parental leave, so it falls to women to reduce their paid hours – their option is to choose less.
Source: WGEA
Women also face barriers accessing jobs in better-paid ‘male’ industries such as mining or construction. Factors that discourage female participation include gender stereotyping of career choices at school and higher education, social expectations about the work women and men ‘should’ do, the lack of awareness about the opportunities and the career paths for women available within male-dominated industries.
Long hours, a lack of workplace flexibility, and often, a lack of facilities for women, and the perception that male-dominated industries have a ‘blokey’ and non-inclusive culture are also disincentives.
Source: WGEA
Unequal unpaid care work is a barrier to reaching gender equality in the paid workforce because it reinforces gender stereotypes of the female ‘homemaker’ and male ‘breadwinner’. There is a new generation of men who are keen to work flexibly, but research by Bain and Company shows that men are twice as likely as women to have their requests to work flexibly rejected and can face career-limiting judgements in the workplace about their work ethic.
Source: WGEA
Workplace Gender Equality: The Business Case
Workplace gender equality is achieved when people can access and enjoy the same rewards, resources, and opportunities irrespective of their gender.
Along with many other countries, Australia has made significant progress towards gender equality in recent decades, particularly in sectors including education, health, and female workforce participation.
However, the gender gap in the Australian workforce is still prevalent. Women continue to earn less than men, are less likely to advance their careers as far as men and accumulate less retirement or superannuation savings. At the same time, men have less access to family-friendly policies such as parental leave or flexible working arrangements than women.
The aim of gender equality in the workplace is to achieve equal opportunities and outcomes for both women and men and not necessarily outcomes that are exactly the same for all.
To achieve this requires:
- workplaces to provide equal pay for work of equal or comparable value
- the removal of barriers to the full and equal participation of women in the workforce
- access to all occupations and industries, including leadership roles, regardless of gender; and
- the elimination of discrimination on the basis of gender, particularly in relation to family and caring responsibilities.
Achieving gender equality is essential for workplaces not only because it is ‘fair’ and ‘the right thing to do,’ but because it is also linked to a country’s overall economic performance.
Women remain underrepresented at every stage of the career pipeline in Australia – only 17.1% of CEOs are women, 25.8% of board members and 30% of key management positions. The belief that senior level roles cannot be adapted to flexible work arrangements also results in the under-representation of women with caring commitments in higher-paid senior roles.
A lack of role models and mentors can also restrict women’s professional development and career advancement. When women – and men – see females in senior roles it normalises the idea of female leadership.
Source: WGEA
The benefits of inclusive workplaces to organisational reputation are evident in the strong interest in the WGEA Employer of Choice for Gender Equality citation (EOCGE). Citation holders recognise that gender equality is critical to an organisation’s success and is viewed as a baseline feature of leading organisations.
As one of the world’s leading providers of contingent worker management solutions, CXC is well positioned to optimise all elements of your contingent workforce strategy. With operations in more than 50 countries across five continents and decades of experience, we can assist with every aspect of your program.
If you are interested in discussing the workforce gender pay gap in Australia or in your business and would like to find out more about how we can work together, please contact us.
We recently released The Contingent Workforce Salary Benchmark Report which analyses contractor rates, including gaps in gender pay rates. You can access the report here.
