We'll be waiting 26 years for gender pay gap to close at current rate of change

At current rate of change, Australians will be waiting 26 years for the gender pay gap to close

It's moved from 24.7% to 20.1% over the past seven years.

Great news, the gender gap is closing! But a reminder, it’s 2021 and a 20.1% total remuneration pay gap between men and women still exists.

At the current rate of change, we’ll have another 26 years to wait until it’s gone, according to analysis of current trends in remuneration data covering 4.3 million Australian workers.

The gender pay gap has moved from 24.7% to 20.1% over the past seven years.

So by 2047, at that rate of change, we can expect it to be gone.

It’s glacially slow ‘progress’. And, as we’ve seen with other measures of progress on workplace gender equity, things can quickly go backwards.

The analysis comes from the Workplace Gender Equality Agency and Bankwest Curtin Economics Centre who also, importantly, note that these trends do not reflect the COVID-19 pandemic period, as that data is yet to be captured. The 20.1% figure was recorded according to a reporting period that ended in March 2020.

Overall, the most positive takeaway from the WGEA/Bankwest analysis is that we have the ideas and the know-how to speed this rate of change up. The data shows that a number of key measures make a fast difference, including: consistent pay gap audits and analysis; policies aimed at fixing problem areas; as well as targets and other measures to get more women into leadership positions.

Disappointingly, too many Australian employers are still not undertaking pay gap audits, analysis that is essential in actually identifying problem areas and making the changes necessary to remove pay gaps.

And those that cease to undertake such audits? Well that can result in the pay gaps widening again. This analysis found that the managerial gender pay gap actually grew an extra 5.1% points among employers that had stopped undertaking regular pay gap audits.

More than half (54%) of companies that report to WGEA have not been undertaking any kind of regular gender pay gap analysis. Meanwhile, the report finds a “level of apathy and complacency” among some of the country’s biggest workplaces, apathy that exists around efforts to get more women on boards, to narrow gender pay gaps, and on implementing gender equity achieving policies and practices.

The report also notes that it’s the businesses that consistently scrutinize their data and apply relevant workplace policies that ultimately achieve the best gender equality outcomes.

As Libby Lyons put it in in the report. “What is not measured can run the risk of being neglected and ignored.”

“This report proves again that a gender pay gap analysis is essential for every organization,” says Lyons. “If every organisation in Australia did a pay gap analysis and acted on the identified problems of that analysis, the gender pay gap in Australia would be consigned to history.”

The long wait for closing the gender pay gap that the report has identified actually changes according to position. For full time executives — it’s shortens, on track to close within 10 years. For senior managers, it’s 15 years. But for those working in non-management roles, it could take even longer.

Report author and Bankwest Curtin Economics Centre Deputy Director Associate, Professor Rebecca Cassells noted: ” Some occupations may not see any change at all in their gender pay gap in the coming years.”

“Our report showed organisations that implemented a comprehensive suite of gender equality policy and practice measures and did so consistently over time achieved lower gender pay gaps and, more women in senior leadership roles.”

She also highlighted some key differences between industries.

“We also found finance and insurance, utilities and mining companies are the most likely to adhere to best gender equity practices, with the mining sector being the biggest improver in recent years, while businesses in the health care and social assistance sector are only a quarter as likely to adhere to best practice.”

Australian women have waited long enough for the gender pay gap to close.

We can’t risk “inertial and complacency” leading to a reversal of current trends, as Libby Lyons put it. Indeed, the COVID-19 pandemic may well have already set things backwards: a possibility that will be made clearer later this year, when WGEA releases its next dataset.

“Employers must act now to embed gender equality in their organisations as a standard business practice,” Lyons said.

“Not only will it drive better company performance, productivity and profitability but it will also deliver meaningful, systemic change that will close the gender pay gap faster and make our workplaces better, fairer and safer for both women and men.”

WGEA and Bankwest Curtin Economics Centre’s analysis is based on 4943 reports submitted to it in accordance with legislation requirements, for the period marking 1 April 2019 to 31 March 2020. This data covers 4.3 million employees, more than 40% of all employees in Australia.

Key findings from the report

  • There is another 26 years before the gender pay gap closes, at the current rate of change.
  • The total remuneration gender pay gap has fallen from 24.7% to 20.1% over the past seven years
  • The rate of employers undertaking pay gap audits has slowed, increasing by only 1.6% in WGEA’s latest reporting data. In previous years, it has averaged growth of 3.7%
  • Board targets are helping to get more women on boards — with organisations that have consistent board targets increasing their share of women at twice the pace of boards that do not have targets.
  • The managerial gender pay gap actually grew an additional 5.1% points among organisations that had ceased regular pay gap audits.
  • There has been a 4.4% point reduction in the gender pay gap of managers between 2015 and 2020 among those companies that have applied consistent gender equity policies and actions.
  • Traditionally female-dominated industries including education and training, health care and social assistance sectors, ranked lowest on average in terms of their approach to workplace gender equity. Mining, however, on average ranked the highest.

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