According to the latest report from Australia’s Workplace Gender Equality Agency (WGEA), Australia is some ways away from achieving one of the most important indicators of equitable economic development. The report shows that men in Australia tend to be paid up to $25,792 more than women due to persisting gender role stereotypes. The gender pay gap represents major losses in productivity and development for an economy in many different ways.
For one, the difference in earnings between women and men leads to a loss in economic productivity. This is because the talent and skills of women are never fully realised in an economy that does not fully value them. This also leads to a loss in labour force participation, further contributing to a loss in economic growth and affecting workforce efficiency as a whole. Women who experience the gender pay gap can also find themselves discouraged from investing in their abilities further, limiting the development of human capital in the country and hindering the potential for further innovation and progress. This detracts from the prosperity achieved thus far by perpetuating economic inequality and social instability. The gender stereotypes that a gender-based pay gap reinforces also affect the future financial health of the nation by limiting opportunities for women in the workforce and devaluing their contributions.
The WGEA published their report exploring the gender pay gap in about 5,000 businesses in the country—all of which employ at least 100 employees or more. The report’s main objective is addressing and contributing to the reduction of the gender pay gap and follows the passing of the Workforce Gender Equality Amendment (Closing the Gender Pay Gap) bill in 2023. It finds that the pay gap in the country (expressed as a percentage of a male’s median earnings) is about 19%. In average total pay, this difference amounts to about 21.7% in total. This means that the median pay of a woman is on average, $18,461 less than the median of what a man is paid. Speaking to the media, Mary Wooldridge, the chief executive of WGEA, stated that hopefully, the report helped address the wage gap and gain more attention:
“The absolute objective of doing this is to create momentum to close the gender pay gap… the evidence has shown overseas that (publishing individual company pay gaps) is a catalyst for action to be taken… It’s not a silver bullet. It’s not going to close overnight, but we expect reductions”.
WGEA’s report shows that some of the biggest employers in Australia are responsible for wage gaps of between 30% to 40% in a manner that is discriminatory towards women. The report further found that the top banks and energy firms in the country performed the worst in terms of equitable remuneration and compensation. The median total remuneration gender pay gap at the Commonwealth Bank for example was 33.2%, while the gap at top power producer AGL was 33.2%. More men than women hold the top positions in organisations such as these, which heightens the difference between pay gaps. On the flip side are companies like the supermarket chain Woolworths, which posted a gender pay gap of just 5.7%. In most industries, the lack of representation of women in higher positions is unfortunately not a new phenomenon.
In many companies, women tend to be disproportionately represented in the lower-paid service jobs that are tasked with facing the public, such as retail assistants and hospitality workers. The data presented in the report has prompted many companies to defend their position by saying that it is women’s own choices that are prompting them to work in lower-paid positions. However, this is a gross misrepresentation of the circumstances – a history of gender bias and stereotyping contributes towards these supposed ‘choices’. Furthermore, according to the WGEA’s official website, “every industry in Australia has a gender pay gap favouring men. Female-dominated industries generally have lower wages, and women in those industries are often working in lower-paid roles”.
It is important however that we shift our focus away from assigning blame to what can be done to achieve change for the better. Audits such as the one provided by the WGEA provide some insight into the issue of course, but individual companies and agencies might find it useful to conduct their investigations to find out the particular causes driving the gender pay gap in their organisation. These might include senior positions enacting conscious and unconscious bias and discrimination in pay and hiring decisions. A whistleblowing or reporting mechanism may also be necessary, as well as an official report of the audit findings to both management and employees. Expressing clear support by informing employees of this information as well as setting up reporting mechanisms will empower employees to make more informed decisions and establishing KPIs that reduce gender pay gaps will further incentivise management to improve conditions in the organisation. Providing men with flexible work arrangements and leave entitlements will help ensure that the unequal burden of caregiving placed on women in the wider society does not prevent them from achieving their full potential in terms of their careers.
(Theruni M. Liyanage)