Daily BulletinHoliday Centre

The Conversation

  • Written by Rebecca Cassells, Associate Professor, Bankwest Curtin Economics Centre, Curtin University

Whenever the gender pay gap is mentioned there are always those who argue it doesn’t exist, either because of differences in the way men and women work, choices women make or legislation prohibiting it. Whatever the reason, this confused rhetoric stems from a couple of sources.

The first is the belief that the gender pay gap is a synonym for direct discrimination. And the second is a more general misunderstanding around what the gender pay gap can tell us about overall inequality in the Australian labour market.

It’s time to clear up how we think about the gender pay gap and what it can tell us about the current and future economic security of women and the lost opportunity in human capital investment and potential.

The importance of a consistent measure

The gender pay gap is the difference between men and women’s pay. It can be measured a number of ways, but a common metric is the difference between the average wages of men and women working full-time. This is a useful metric as it accounts (to some extent) for differences in the number of hours men and women work each week and provides a good basis for changes to be monitored over time.

Over the last few decades Australia has seen a considerable increase in women’s labour force participation, levels of education, greater support to working families through child care, paid parental leave and flexible working arrangements. Key pieces of legislation have also been introduced in order to combat workplace inequalities. However, across that same period, the full-time gender pay gap has barely shifted.

Gender pay gap, full-time workers, 1994-2016 image GPG AWOTE Authors calculations from ABS Cat No.6302.0 Average Weekly Earnings

The full-time gender pay gap currently stands at 16.2%, on par with the long-term average over the past twenty years. Women working full-time currently earn, on average, 84% of a man’s pay.

When there is a structural shift in the labour market, where women are as likely to hold higher paying jobs as men and women’s work is valued as highly, and other biases are eliminated, the full-time gender pay gap will decrease considerably and permanently. This is in contrast to the cyclical movements we can see in headline indicators at the moment.

Because of the highly segregated workforce, gender pay gaps tend to increase when the economy is booming and contract during economic downturns.

Running out of excuses

The Australian labour market is highly segregated, meaning some of the overall gender pay gap is driven by the differences in the way men and women work. Men tend to dominate industries that have higher pay such as mining and construction and women dominate health care and education.

In fact, even taking into account for differences in occupation and industry, gender pay gaps exist, especially in the managerial levels as shown by new data reported to the Workplace Gender Equality Agency

Gender Pay Gap, occupations within industries image BCEC|WGEA Gender Equity Insights 2016

Let’s take three examples – the male dominated mining industry, female dominated health care industry and the mixed retail trade sector.

Mining has an overall gender pay gap of 18%, but digging down into occupations within that industry, there is considerable variation. Among machinery operators and drivers, the gender pay gap is 7% in the mining sector, but increases to 17% when comparing top-tier managers.

The female dominated health care and social assistance sector also has an overall gender pay gap of 18% and again variation exists when examining occupations within the industry.

Lower occupation levels tend to have smaller gender pay gaps – but as the level of seniority increases, so does the pay gap. It reaches 25% for key management personnel in the health care sector.

This is especially the case for the retail trade sector, where workers' pay and conditions for lower occupation levels are guided heavily by awards and agreements. However, as seniority increases and pay becomes more discretionary, so does the gender pay gap.

Experience and education

Experience and education will also influence how much pay one receives and it will also explain some of the gender pay gap. There are high hopes for younger generations that the gender pay gap will disappear.

Younger age groups do face a lower gender pay gap than older age groups, however, this has not changed substantially in the ten years between 2003 and 2013.

Full-time Gender pay gap by age groups, 2003 and 2013 image Household, Income and Labour Dynamics in Australia Survey

In fact women in their twenties working full-time in 2003 could expect to take home around 8% less in weekly wages than their male counterparts. By 2013, this had increased to just over 15%.

The important point is that gender pay gaps are real and haven’t really made any huge ground over time. Some of the gap can be explained by differences in how men and women work, their education and experience.

If we can explain these differences, then this is really useful because we can then address it. But, numerous studies show that once we do account for all the possible drivers of the gender pay gap we are left with a large portion we just can’t explain.

Which gender pay gap should we really be interested in?

There is no single answer to this question – it depends on the objective.

Headline indicators across the workforce are useful because they illustrate the lack of structural change in the labour market that is needed to bring men and women’s average wages on par.

To understand and address the gender pay gap for the next generation of workers in the labour market, we will need a different lens to those we use for understanding the gender pay gap for top tier managers.

The important point is that there are a number of ways to look at the gender pay gap and its drivers. Each has its place and more importantly, each can inform the policies and initiatives needed to eliminate it.

Authors: Rebecca Cassells, Associate Professor, Bankwest Curtin Economics Centre, Curtin University

Read more http://theconversation.com/will-the-real-gender-pay-gap-please-stand-up-64588

INTERWEBS DIGITAL AGENCY

The Conversation

Politics

Scott Morrison Virus Announcement

PRIME MINISTER: Good afternoon. Keeping Australians safe - that is the priority of our Government as we deal with what has been an emerging situation with the coronavirus. Each and every day there a...

Scott Morrison - avatar Scott Morrison

Closing the Gap Statement to Parliament

Mr Speaker, when we meet in this place, we are on Ngunnawal country. I give my thanks and pay my respects to our Ngunnawal elders, past, present and importantly emerging for our future. I honour...

Scott Morrison - avatar Scott Morrison

Prime Minister Interview with Alan Jones

ALAN JONES: Prime Minister, good morning.    PRIME MINISTER: Good morning, Alan.    JONES: I was just thinking last night when we're going to talk to you today, you must feel as though you've ...

News Company - avatar News Company

Business News

Having a mentor is a must to take your business to the next level

Kerstyn Walsh will have the chance to meet her business mentor, LA-based wedding planner to the stars, Lisa Vorce, which will be game-changing for growing Kerstyn’s business Kerstyn Walsh, a self-emp...

Media Release - avatar Media Release

Is Hiring a Corporate Lawyer for Your Company Necessary?

Alternative online legal services like LegalZoom, Incfile, and Rocket Lawyer provides young and budding entrepreneurs access to legal help at a much affordable price without having to hire or meet a l...

Joe Curmi - avatar Joe Curmi

Top 5 Green Marketing Ideas for Your Eco-Friendly Small Business

According to studies, about 33 percent of consumers prefer buying from brands that care about their impact on the environment. This is good news for anyone running an eco-friendly business. It’s a...

Diana Smith - avatar Diana Smith

Travel

Travelling With Pets? Here Is What You Should Know

Only a pet parent can understand the dilemma one experiences while planning a vacation. Do you leave your pets at home?  Will you get a pet sitter or someone to take care of them while you are away?...

News Company - avatar News Company

How to Be a Smart Frugal Traveller

You are looking through Instagram, watching story after story of your followers overseas at a beach in Santorini, walking through the piazza in Italy, and eating a baguette in front of the Eiffel ...

News Company - avatar News Company

HOW TO PREPARE FOR YOUR GRADUATION TRIP

Graduation is the stage of life when a student receives the rewards of hard work of years. It must have taken sleepless nights and tiring days to achieve the task. Now, as you have received your cov...

News Company - avatar News Company

ShowPo