It’s 2022, and more women are in the workforce than ever before.
According to the Australian Bureau of Stats (ABS), women made up nearly half of the workforce in 2020, compared to around 30% in 1966. Women have made so much progress in the workforce, however there is something still plaguing women–the gender pay gap.
A joint report released by KPMG, Diversity Council Australia (DCA), and the Workplace Gender Equality Agency (WGEA) reveals the gender pay gap is nearing almost $1 billion per week or $51.8 billion per year. New data released by the ABS in August 2022 revealed that the wage gap increased 0.3 percentage points over the past six months to 14.1%.
So, what exactly is the gender pay gap? How is it calculated?
The gender pay gap is an internationally recognised measure of women’s position in the economy in comparison to men. It measures the difference between the average earnings of men and women in the workforce. In Australia, The Workplace Gender Equality Act 2012 requires non-public sector employers with 100 or more employees to submit a report to the WGEA. From there, WGEA compiles the data and publishes a yearly report based on its findings.
What causes the gender pay gap?
The pay gap between men and women is a direct result of broader cultural problems in workplaces. It reflects the significant barriers that lead to the under-representation of women in senior roles additionally, the historic and systemic undervaluing of women in the workplace.
The gender pay gap is influenced by several factors; including:
- Conscious and unconscious bias in hiring and pay decisions (eg “we’d rather hire a male to be a manager and make key decision in our workplace than a female”)
- female dominated industries, such as early childhood education, health care, and office administration, attract lower wages
- lack of workplace flexibility to accommodate women mainly being the primary carers
- women make up 68.5% of all part-time employees
- women spend more time out of the workforce due to having children and has been reported that raising children accounts for a 17% loss in lifetime wages for women
- women’s disproportionate share of unpaid caring and domestic work, women spend 64.4% of their average weekly working time on unpaid care work compared to 36.1% for men
- women are underrepresented in top roles, only 17.1% of CEOs are women, 25.8% of board members and 30% of key management position in Australia.
How do we close the gap?
While there is no easy fix, closing the gender pay gap requires action by the government, society, and employers. Women have come a long way in the last few decades, and our hope is that women continue to break the glass ceiling.
Currently, the Australian government is working on delivering childcare reforms that will provide a more affordable and flexible early education and childcare system, providing more opportunities and training for women entering male-dominated industries, such as science, technology, engineering and maths, and are bringing awareness to pay equity through the work of WGEA to narrow the gender pay gap. Whilst this is a step in the right direction, more should be done to ensure women are supported from the moment they enter the workforce, such as increasing the minimum wage for women led industries and providing more leadership programs.
What can employers do to help close the gap? Firstly, employers should acknowledge that it exists and needs to be addressed. Conducting yearly pay equity audits, and ensuring all employees of equal experience and in similar roles are paid the same, and investing in female leadership opportunities are a few things employers can do to help support women. The data should then be made available to all staff on a yearly basis and if any areas of concern are identified, the company should be held accountable by the government and rectify issues within 12 months.
The Future
As we look into 10-20 years from now, we hope the wage gap will be a thing of the past. However, so much work needs to be done on a government and employer level before we can see change. For more information about the state of workplace gender equality in Australia, visit https://www.wgea.gov.au/.
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