Women drive jobs growth, time for a pay rise

By Nicki Bourlioufas

Full-time jobs growth for women is easily outstripping full-time male jobs growth, with a record participation of women in the workforce, as revealed by June 2024 jobs statistics from the Australian Bureau of Statistics, with higher wages growth also helping to close the wage gap.

Despite the news, and it's significance?to consumer spending, economists and the media missed it.

As if women’s economic achievements don’t matter or aren’t worthy of the attention that left to matters that never go away; Donald Trump and interest rate setting.

Yet the economic ramifications are significant, with women not only strengthening their financial independence, but also gaining two important economic tools:

1.?????? More spending power;

2.?????? More bargaining power in the still tight Australian labour market.

With nearly 60% of GDP in Australia coming from consumer spending, the fact that women are reaping more money and spending more should be noted; it helps explain some of the momentum in the economy, underpinned by growth in real wages, after many years of no growth at all.

Female full-time employment stood at 3,906,500 in June 2024, up from 3,649,600 in May 2022, representing growth around 7.0%. That compares to a rise in male full-time employment over the same period of around 4.5% (6,037,700 full-time males were employed in June 2024, up from 5,776,600 in June 2022).

This coincides with more women moving into full-time from part-time jobs and rejoining the workforce as the female participation rate sits at a record high of 62.9%, well up from around 52% three decades ago.

The chart below shows the overall surge in employment, which goes some way to also explain the the inflationary impact of a tight jobs market on the Australian economy. The RBA is still trying to work it all out.

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Pay gap still persists.

Yet despite the strong growth in female employment, the wage gap persists at close to 30%.

Equal pay means that women and men have the right to receive equal pay for work of equal value. It also means that women and men should get equal pay when they do work that is completely different to that of a male, but can be shown to be of equal value, when evaluated based on objective criteria. In Australia, this has been a legal requirement since 1969.

Despite that, the gender pay gap for all Australian employees, including both full-time and part-time employees, is huge and much larger than the full-time measure, with women more likely to work part-time. That gap was 28.1 per cent in November 2023, down from 28.6 per cent in May 2023.

The good news is that it is narrowing. For full-time workers, the gender pay gap in average weekly ordinary full-time earnings, the most commonly cited of the?gender pay gap measures, narrowed to 12.0 per cent, down from 13.0 per cent in May 2023 and the lowest level on record.? That was the third drop in the gender pay gap in a row, down to a new record low, given stronger annual growth in average full-time earnings for women, at 5.5 per cent, compared with 4.0 per cent for men.

Turning to wage negotiations for 2024-25

As the financial year commences, the time is ripe for women to use their bargaining power to seek pay rises for 2024-25 - and for employers to ensure equal pay for equal work.

Particularly women who haven't received a wage rise in recent times to ask for one in the new financial year to avoid their real wage being diminished given inflation remaining at nearly 4%. And to demand pay equality too if they are in a workplace where men are paid more to do the same job. In the still tight job market, employers will be inclined to renegotiate salary packages, given the significant challenges in recruiting replacements in a market characterised by the tightest labour market since 1974.

Historically, women, even high achievers, have been more hesitant than men to ask for a pay rise. Now is the time to ask as budgets are set now for the 2024-25 financial year, especially for women who are being paid less than their male peers, with the wage gap a common feature in labour markets across the globe.

So, if you do do a good job, ask for a pay rise. Many males ask and do get pay rises (just look at average wages in male dominated industries, well above those in sectors dominated by females); women should ask, and arguably, many should be receiving more given the wages gap in Australia still persists at a wide level, as it does around the globe in developed nations.