Australian working women earn less than men from the moment they enter the workforce, and the gap is eroding their economic security over their lifetime.
It costs Australia billions of dollars a year and has for decades, yet we baulk when it comes to investing in the obvious solutions.
The fourth edition of the She’s Price(d)less: The economics of the gender pay gap report by KPMG, Diversity Council Australia and the Workplace Gender Equality Agency estimates the national pay gap at $966 million a week or $51.8 billion a year. That’s almost a billion dollars in earnings a week that working women are missing out on, and while there are various approaches and data sources to calculating the pay gap, they all favour men.
The gender pay gap is not two people being paid differently for the same job but a measure of women’s economic positions compared with men, resulting from social and economic factors that combine to reduce women’s earning capacity over their lifetime.
In real terms, Australia’s gender pay gap didn’t change between 2017 and 2020.
Gender discrimination remains the biggest driver of the pay gap, but together with the time women take out of work to raise children, care for family, run a household — and the higher likelihood of returning to work part-time to manage this unpaid care — it causes a cumulative effect on their careers and, therefore, their earnings.
Women also make up most of the workers in the jobs and industries that the pandemic showed us matter most, such as early education, health and aged care, but because they are feminised, they are simultaneously undervalued and underpaid.
We aren’t putting enough value on the care economy — that is, women in caring roles at home or work — and we’re all paying for it. Just last week, Victorian MP Steph Ryan quit politics for a position that would give her flexibility to juggle the demands of a young family.
Women are underrepresented at every level of government in Australia, and our report shows they are the minority in leadership positions in business. They’re also overrepresented in insecure, part-time, less senior and lower-paying roles — but not by choice. This must be rectified.
Australia’s gender pay gap is fixable, and the solutions within reach. Our governments and employers can tackle complex problems and they did so repeatedly during the pandemic. No one action will solve this, but a combination of reformative policies will make the difference that women and organisations such as Diversity Council Australia have been calling for.
Many women working part-time to balance careers and caring want more paid hours, and affordable, universal childcare would help — with the bonus of creating more jobs and taking financial pressure off households. Flexible and gender-neutral paid parental leave that encourages all parents to take time off and share the care of their children would disrupt gender stereotypes and support women to get back to work sooner.
Better funding for early education, health and aged care to make them better paid and more secure would get more women back to work and contribute to closing the pay gap and workforce shortages.
The cost of doing nothing will just continue and potentially worsen the gender pay gap. But it’s also much more than that. While the pay gap and the forces driving it are not new, this new data should be a reminder of why Australia’s industries, governments and communities must work together to tackle the systemic drivers of pay inequity.
Targeted strategies, policies and initiatives are required and specific responses from businesses, employers, industry bodies and government to create meaningful change.
Acting with purpose now would not only invest in our nation’s future economic prosperity but also help overcome current and future economic headwinds.
Key drivers of the gender pay gap in 2020
- Gender discrimination accounted for 36% of the gap, or $348 million in weekly earnings, compared with 39% in 2017
- Care, family and workforce participation accounted for 33% of the gap, or $319 million in weekly earnings, compared with 39% in 2017
- Type of job (occupation and industry) accounted for 24% of the pay gap, or $232 million in weekly earnings, compared with 17% in 2017.
