Gender Pay Equity a Myth or Reality

The Research TeamProf. Don Fuller- Head of School of

Law and Business- Economic- Project Management

and Strategic Analysis

Dr. Susan Bandias- Director of ACS W- Coordinator of

Bachelor of Commerce- Human Resources- Cross Culture Mgt. - Industrial Relations

Tanjil Whitnell - Unit Coordinator - Lecturer and tutor for

Criminal Law and Procedure and Principles of Criminal Law

Dr. Darius Pfitzner– A/Prof. of Business– Technology

Applications– Project Management

and Strategic Analysis

The Elephant is in the Room

• ABS confirms persistent Gender Wage Gap

• 1990 -2009 persistent gap between 15% & 17% Cassells et al. (2009)

• Recent fluctuation from 15% – 17 +%

Source: www.socialist-alliance.org/page.php?page=873, 01/04/2011

Why?Significant research topic for over

40 yearsAreas of focus:

• Decomposition of pay gap into differences between men and women

• Understanding of the different elements across occupations

• Identification of contributory factors

Source: womenonbusiness.com, 01/04/2011

Multiple & Complex Causes

Educationalattainment

Skills differentials

Wage setting mechanisms

Occupational and industry characteristics

Labour market tenure and engagement

Family responsibilities

Discrimination

Policy Agenda – 100 years

1907 -The Federal Harvester Case

1912 – Fruit Pickers Case1912 - 1969 Ratified

International Conventions1969 - Federal Equal Pay Case1972 - National Wage and Equal

Pay Case2009 - Fair Work Act Illegal to discriminate on

the basis of genderImage source: http://www.mindingthecampus.com/originals/law%202.jpg, 01/04/2011

Current Situation

• Increased workforce participation level• Higher educations rates

• Delaying and having fewer children• Social transformations - the “Pill”

and feminist movement• Important Legislation -

Commonwealth Sex Discrimination Act (1984)

• 2010 - Gender wage gap highest on record

Source: http://www.archives.gov/exhibits/powers_of_persuasion/its_a_womans_war_too/images_html/images/we_can_do_it.jpg, 01/04/2011

Australia vs. The World

Source: (OECD, 2009)

International comparison of gender wage gap

Constant and Increasing• Experienced across all occupational groups• Across all states and territories

Source: (Cited in:Relations, 2009:26)

Constant and Increasing2009

– Women = $1,049.40 per week – Men = $1,263.70 per week

Young Females <$150 per week - Five times more likely

Young Females <$600 per week - Twice as likely

Females 35-64 years >$1,300 per week- Half as likely compared to male counter parts

Females 35-64 years >$2,000 per week- Quarter as likely compared to male counter parts

If No Wage Gap

• Australian women‘s wages would

Increase by

$1.87 per hour

= $65 per week or

= $3,394 annually

Source: http://www.cpsu.org.au/multiattachments/5096/Image/HappyPayRise250.jpg, 01/04/2011

Industry Sector• Across all industry sectors -

No female is paid more than a male!

In fact• Significant deterioration in

relative female earnings

Larger Gap - SectorsMining, Property and Business Services, Finance Services, Health and Community Services

Small Gap - SectorsRetail Trade, Accommodation and Hospitality and the Government Administration and Defence Sectors

Image source: http://jcdbilbao.com.mx/wp-content/uploads/2009/04/decrease_300.jpg, 06/04/2011

AustraliaOne of the most gender segregated workforces

• Highly gender segmented• Women predominate in a small number of

industries and occupations• High concentration of women in certain

industries

• Characterised by

e.g. retail trade, banking, health services, education, community services and recreational services

• lower rates of unionisation, • high incidence of casual and part time• award reliant

Image source: http://3.bp.blogspot.com/_FiD-cJk--Xs/TAygbQVXu0I/AAAAAAAAADg/5VJyL2jMMnY/s1600/DSCF1925.JPG, 06/04/2011

?

Female Dominated Occupations?

• Females are concentrated in the lower income brackets, across all occupations (ABS)– Particularly clerical, administration and sales

• Even in female dominated occupations

Women are less able to negotiate higher

levels of pay!

Image source: http://www.elledgegroup.org/image_manager/bsp-Business-Negotiations-Men-311984.jpg, 06/04/2011

Cumulative & Compounding Effects

• Over a career life span disparity effects accumulate and compound

ICT3-5 years - $300 less per annum10 years - $5800 per annum25 years - $22,000

Finance sectorSimilar

1 4 7 10 13 16 19 22 250

20,000

40,000

60,000

80,000

100,000

120,000

MenWomen

Cumulative & Compounding?What about Super?

What is the difference?– Ave. balance: $87,589 (men) -$52,272 (women)– No coverage: 2.8 million (women) – 1.6 million (men)– Women live longer and survive on less

Image source: http://www.clubfemina.com/think-the-economic-outlook-is-bad-for-you-try-being-an-aging-woman.html

As before, women:– Receive lower remuneration– Spend less time accumulating

Effects of Labour Force Withdrawals

• Non-continuous work = less job tenure• Degradation of human capital = lower

promotion rates• Interruptions = lower training participation• Earlier withdrawals = less early skill acquisition• Withdrawals = earning discrimination

Children?Children = Larger GapYounger Children = Bigger Effect

Image source: http://www.thechronicle.com.au/story/2010/10/13/gen-x-women-leaving-work-force/, 07/04/2011

-Less participation-Fewer hours worked

Comparison – without children or male

Effect of Children?

• Women with dependent children earn 7.5% less than women without

What The?• Men with dependent children

earn slightly more than men without dependent children

Image source: http://www.womenintechnology.co.uk/blog/the-gender-pay-gap-again--blog-07011151823, 07/04/2011

ChildrenHow Much Over a

Lifetime ?

With ChildrenMen - $2.5 million

Women - $1.3 million

Image source: http://www.babblebaby.com.au/, 07/04/2011

Without ChildrenWomen - $1.9 million

Men - $2 million

Indigenous Women

A real problem – a general lack of statistics– 49% employment participation rate– More than 40% lower income than non-

indigenous women

Compounding factor– More intermittent work patterns– Shorter life expectancy– Earlier retirement

Image by; Emily Kame Kngwarreye Anooralya, 1995Image source: http://www.aboriginalartnews.com.au/2006/06/dreaming-their-way-australian-aboriginal-women-painters.php, 07/04/11

Women in Senior Executive Roles

Source: EOWA 2009

Key Management Personnel in ASX Companies by Gender

Gender Pay Gap in the Australian Workforce

Source: EOWA 2009

11.3% higher than national average.

EOWA suggests an increase Gap for higher earning

Female Population Attributes– Half the workforce,– Over 50% the year 12 completions, – Over 50% the number of HE

graduates,– Over 50% of all consumer spending decisions and, – shaping the economic landscape by their consumer

preferences

Why the imbalance in employment & wages?

Did You Know?• 25 Fortune 500 firms with the best record of

promoting women to high positions are between 18 and 69% more profitable!

• ASX Group recently introduced new rules:– Listed companies to disclose improvements to

proportion of women throughout the organisation– Listed companies to disclose information on

remuneration by gender

These are mandatory, an economic imperative and a legal obligation.

Important Australian Labour Market Facts

In 2008-2009 women:– Constituted 50.2 per cent

of the population

Image source: http://www.smh.com.au/news/business/beefed-up-labour-force-on-hand-to-fill-new-jobs/2007/10/12/1191696177094.html, 07/04/11

– Made up 45.7 per cent of the workforce– Worked 7,651,000 or 38.6 % of all hours

worked– Earned 89 % of males' income

Gender related Workforce Characteristics

• 40% of females worked a whole year compared to 53% of males.

• 33% of women did not work or look for work compared to 22% of men

• Women are more stable in part-time employment

There is no evidence that females are less employable!

Ignored/Hidden Workforce• Net international migration levels have

been increased to unprecedented levels and

• Training initiatives focusing on apprenticeships for the industrial and building sectors have been boosted

Image source: http://sullybaseball.blogspot.com/2010/10/life-of-brians-beard.html, 07/04/11

What about developing that ignored workforce of highly educate and skilled

WOMEN?

Benefits of Closing the Wage Gap

• Attract and retain good employees• Save costs on recruitment due to high

retention rates• Enable a more flexible and efficient

workforce,• Realize benefits associated with being seen

as good employer and corporate citizen.

Image source: http://www.ehow.co.uk/list_6462289_benefits-raising-minimum-wage.html, 07/04/11

Effects on GDPEconomic growth is sensitive to the number of

hours worked in Australia

Reduction of the gender wage gap will result in:– more hours of work, and thus– greater economic growth

Image source: http://citiesofmigration.ca/mentoring-that-takes-the-other-out-of-the-picture/lang/en/, 07/04/11

By How Much?

A 1% reduction in the Gap and GDP would grow by:

5,497 million or approx.$260 per person

Close the gap all together and GDP would grow by:

$93 billion or approx.$4650 per person in Australia

Image source: http://www.yahoo7answersblog.com/b4/tag/money/, 07/04/11

Conclusions• Constant wage gap of around 17%

• Women are skilled and willing to work

• Reducing the gap is now a social and legal imperative

• More women in the workforce work and GDP will improve significantly

• The pay gap is a disincentive

• Women still undervalued

Final Word

• In March 2011 a detailed reform package to Opportunity for Women in the Workplace Act (‘the Act’) was announced.

• The Act will be renamed the Workplace Gender Equality Act, and the Agency will be known as the Workplace Gender Equality Agency.

• The objects of the Act will be recast to acknowledge pay equity and the caring responsibilities of both women and men as central to gender equality.