A British politician – minister of equalities Jo Swinson – this month urged women to ask their bosses what their male peers earn as a step towards flushing out the facts in companies that are slow to equalise gender pay gap.
So is this something we need to worry about in Australia? Unfortunately yes.
When I talk about the gap between women and men’s earnings though, I am regularly surprised at the reaction I get.
People often say they don’t believe there’s a gap between men and women doing the same job, or if there is, it’s an isolated case. Or it’s only because women are more likely to work part-time or take time out of the workforce to have children.
But the truth is there is a big gap between men’s and women’s wages and it gets bigger as we age.
ABS figures show that, in 2013, women working full-time earn, on average, 17.5% less than men working full-time (not taking into account overtime). Which pretty clearly busts the myth that pay inequity is just a result of women wanting to work part-time.
If you take part-time and casual work into account, the gap jumps to a massive 37.3%.
But despite decades of action by women’s organisations, governments and unions, progress on closing the gap in recent years has been glacial.
Research by Canberra University’s NATSEM shows that since 1990, the gender wage gap has barely shifted, stuck between 15 and 17%, and even more worryingly, steadily increasing over the past decade from a low of 15.1% in February 2005 to the current high of 17.5%.
Some might say that 17.5% isn’t so much in the scheme of things, but accumulated over a lifetime it has a huge impact on woman’s financial security in old age.
AMP NATSEM’s She Works Hard for the Money: Australian Women & the Gender Divide reported that the gender pay gap over a lifetime would result in an average earnings deficit of nearly $1 million and an even higher $1.5 million for those with university degrees.
Women’s lower incomes also impacts on our ability to save for retirement with figures from the Association of Superannuation Funds of Australia showing women’s average super balances are 43% less than men’s.
Given the looming impact on our economy of millions of women with virtually no ability to finance their retirement, there should be a real impetus for action.
Part of the difficulty in closing the gap is that its causes are complex.
The requirement to pay women and men equally for doing the same work has been enshrined in Australian industrial law since 1969. But real pay equity also needs to address how we value work.
At the very heart of the pay equity problem is the definition of merit – and it should be a hot issue in Australia right now. The truth is that women’s work has never been seen as meritorious or valuable as men’s.
As the former Speaker Anna Burke recently said, “The problem with women is that they think effort will be rewarded and recognised. They work like girly swots and naively believe that they will get meritorious selection. The problem is there is no meritocracy”.
Industries and jobs where women traditionally dominate such as healthcare, education, human resources and administration, tend to be paid less. Some of the lowest paid industries – like accommodation, food services, and retail trade – employ large numbers of women. As do occupations like community and personal service workers.
Conversely, sectors and jobs traditionally dominated by men such as engineering, mining, and finance are better paid.
Unpaid responsibilities at home also have an enormous impact on women’s paid employment and as a consequence our wages, with close to half of Australian women – 46% – currently working part-time and women comprising 70% of all part-time workers. And over two thirds of carers of elderly people and people with disability are women.
As the UK equalities minister points out, greater transparency about pay would help but this is only one part of the puzzle. It ignores the bigger picture, especially the value we place on certain roles. It also puts the onus on individual women to fix underlying structural problems that are way bigger than just one woman’s job.
There are sound economic reasons why the gap should be addressed.
Goldman Sachs JB Were’s landmark report, Australia’s Hidden Resource: The Economic Case for Increasing Female Participation, estimated that closing the gap between male and female employment would boost Australia’s GDP by 11%.
A KPMG report commissioned by DCA also found that closing the gap would be good for industry, resulting in greater competitiveness and economic output with workers better matched to their capabilities; reduced costs through lower staff turnover; and greater retention of skilled and knowledgeable staff.
Smart employers have conducted detailed pay equity audits in their own businesses to identify and address the gender wage gap in their companies. But action at the micro level of individual firms and individual women is only part of the picture. There needs to be strong action at the macro level by government and regulators to re-focus their efforts on reducing the gender pay gap. And this has to include rethinking the way we value work in the wider community.
Gender pay inequity is still holding Australia back. It might be a hard nut issue, but for women and our wider economy, we need to get cracking.