Pay gap in Australia means women managers earn $93,000 less than male managers

Top tier female managers earn $93,000 less than their male peers.

A report released today by Bankwest Curtin Economics Centre in collaboration with the Workplace Gender Equality Agency reveals top tier female managers in Australian organisations earn on average $93,000, or 26.5 per cent, less per year compared to their male counterparts.

The pay gap among managers is exacerbated by the greater share of discretionary pay awarded to men. Nearly $40,000 of the annual difference in pay is made up of additional remuneration including bonuses.

The Gender Equity Insights 2017: Inside Australia’s Gender Pay Gap, also outlines a measurable link between a gender- balanced leadership team and reduced gender pay gaps.

Gender pay gaps for organisations with a balanced representation of women in senior leadership roles, are half the size of those with the least representation of women in leadership.

“Organisations that increased the share of women in executive leadership roles by more than 10 per cent between 2015 and 2016 recorded a reduction in the organisation-wide gender pay gap of 3 percentage points over the course of a single year,” Report co-author and BCEC Director Professor Alan Duncan said.

He says the findings present the strongest empirical evidence to date that improved gender pay outcomes are driven by companies promoting greater gender equity in senior leadership roles.

The managerial gender pay gap rises sharply in favour of men in workplaces with the highest concentrations of female managers which report author and BCEC Principal Research Fellow Associate Professor Rebecca Cassells says illustrates the way the respective contributions of men and women are valued.

“Not only do female-dominated organisations tend to be lower paid, but this analysis shows that in workplaces with heavily female-dominated management teams there are large gender pay gaps in favour of men,” Associate Professor Cassells said. “It seems that where the men are few, they are more highly valued.”

The report is based on 4,697 reports submitted to WGEA on behalf of more than 12,000 employers between April 2015 and March 2016. The dataset captures 4 million employees – which equates to around 40 per cent of all employees in Australia.

“This report shows that regardless of the industry they choose to work in, women are worse off than men when working full-time,” WGEA director Libby Lyons said. “The analysis is clear: gender-balanced workplaces and gender-balanced leadership teams lower the gender pay gap.”

Other key findings include:

Male graduates access higher pay

Gender pay gaps for those participating in a graduate program are minimal, but men are more likely to receive top graduate trainee salaries. The highest-paid 10% of women in graduate trainee positions receive at least $81,000 in base salary, whereas the highest-paid 10% of male graduate trainees took home at least $88,000 – which equates to a pay gap of 8.0%. Women are consistently under-represented in the highest graduate salary bands, with some 18% fewer women paid over $80,000 compared to their share of the graduate workforce.

Managerial gender pay gaps fall as the share of female managers increase….

The average gender pay gap declines as female representation among management increases. The managerial gender pay gap falls steadily from around 15% in total remuneration among firms where one fifth of managers (20%) are female, to 8% for organisations where four fifths of managers (80%) are female.

… apart from organisations with the highest concentrations of female managers

Gender pay gaps rise sharply in workplaces with the highest concentrations of female managers. For organisations with a greater than 80% share of female managers, the management gender pay gap rises from around 8% to more than 17% in favour of men. Organisations with the highest proportion of female managers are concentrated in Health Care and Social Assistance, the Retail Sector and Education and Training.

Men lag in part-time pay, except for managers

For part-time employees, women out-earn part-time men on average by 7.8% or around $4,000 a year. Women are much more likely than men to work part-time, representing some three- quarters of all part-timers. But while the gender pay gap for part-time workers overall is in favour of women, this pattern reverses at senior levels. For part-time managers, women earn on average 27.1% less than their male peers, with a wider gap of 34.7% in female-dominated work environments.

Mining the top paying industry for women

Australia’s most male-dominated industry delivers the highest pay to women. Women employed full-time in Mining earned on average $139,053 total remuneration in 2016. The next top-paying industries for women were Electricity, Gas, Water and Waste services ($106,100) and Banking and Finance ($105,438). The lowest paid industry for women was Retail Trade at $65,865. Women employed in the most female-dominated industry, Health Care and Social Assistance, earned on average $80,026.

Does it matter?

Yes. According to the report authors, the ramifications from the gender pay gap are both severe and diverse. Aside from potentially depressing economic growth and productivity, it slows down the rate of wealth accumulation by women relative to men.

The ramifications reverberate across the life course, with women bearing greater exposure to poverty and disadvantage at every age. In the context of an ageing population in which women are disproportionately represented, gender pay gaps and gender wealth gaps not only pose significant risks for the economic wellbeing of Australian women, they also have important implications for social equity and fiscal sustainability.

The report concludes the persistent gender pay gap is “perplexing” and “disappointingly enduring”.

Despite intentional policy initiatives targeting a reduction of the pay gap, the fact more women study at universities than men, and that discrimination is prohibited, nevertheless it persists.

Notwithstanding the growing recognition that gender equality at work has attracted, in the past two decades we have failed to achieve any meaningful reduction in the pay gap. This report makes clear we won’t until women are better represented in senior ranks.

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