That pay gap? Gender discrimination is increasingly to blame

That pay gap? Gender discrimination is increasingly to blame

gender discrimination
The gender pay gap may have narrowed slightly in recent years, but the reasons behind why it exists at all are growing increasingly concerning, with gender discrimination accounting for around two fifths of it.

Gender discrimination is up 10 per cent as a contributing pay gap factor since 2014, while the input of “occupational segregation” has dropped from 20 to 8 per cent.

That’s according to the latest report on the issue by KPMG, released today in partnership with the Diversity Council of Australia and the Workplace Gender Equality Agency.

Addressing this discrimination could reap significant rewards for Australia according to the report authors, who estimate that removing the primary drivers of the gap could be worth $23 billion a year or $445 million per week.

The national gender pay gap is at 14 per cent, according to WGEA’s August 2019 figures — a 0.6 per cent decrease since May 2018. It’s hovered between 14 and 19 per cent for the past 20 years.

Closing the gap  won’t simply happen with time — even if we do wait the 202 years the World Economic Forum predicts it will take at the current rate of movement globally. Rather, it will need sustained effort from government, employers and the community.

The authors particularly note the need to look at gender discrimination, and suggest addressing pay transparency and considering targets and quotas for women in leadership positions.

This latest report follows on from one first released ten years ago that found engrained gender stereotypes, as well as who does what at home, are continuing to drive the gender pay gap. KPMG uses statistical analysis to determine the extent to which a number of different factors contribute to the gender pay gap, including HILDA data.

Today’s report finds that 39 per cent of the gender pay gap is driven by gender discrimination, the highest contributing factor of all.

Unpaid work, part time work and years of not working due to interruptions — all often blamed factors for the gap — account for a combined 39%.

And the remaining driver is occupational and industrial segregation, contributing to 17 per cent of the pay gap.

This 2019 report also follows 2018 research from KPMG, which found that ending entrenched discrimination against women in the workforce and closing the gender pay gap by half could increase Australia’s annual GDP by 60 billion by the year 2038.

According to KPMG Chairman Alison Kitchen, the findings offer crucial knowledge to help drive government and business action on making progress. “Solving the challenge of Australia’s gender pay gap is not only fair and sensible, it’s an economically responsible endeavor.”

WGEA director Libby Lyons said the “hearts and minds of Australians” must be addressed in order to change the outlook — rather than leaving it to employers alone to close the gender pay gap. “We must challenge ourselves in order to change the very ingrained gender stereotypes that underpin the gender pay gap,” she said.

So what are the solutions? Together,  KPMG, the DCA and WGEA have offered the following, in line with today’s report release, She’s Price(d)less: The Economics of the Gender Pay Gap.

  • Address discrimination in work practices such as hiring, promotion and access to training
  • Increase pay transparency and reporting on gender pay gaps
  • Undertake gender pay gap audits and acting on findings
  • Improve work life balance, increasing availability of flexible work
  • Increase availability of childcare or decreasing cost
  • Enhance availability and uptake of shared parental care
  • Reduce disincentives to increasing workforce participation through personal tax, family payment and childcare support systems
  • Change workplace culture and address unconscious bias
  • Break down social norms regarding what roles and industries are appropriate for men and women
  • Increase the share of women in leadership positions, including through targets or quotas or other diversity policies
  • Develop networks of advocates for gender equality among men and women who can address barriers and affect change.

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