Gender pay equality in Australia still doesn’t add up

Monday August 19th marked Equal Pay day this year in Australia, highlighting the number of extra days after the end of financial year that it takes women to earn the same as men.?The 2024s theme 'it doesn't add up.' Equal pay is when every person receives equal pay for equal or comparable work. Data from the Australian Bureau of Statistics (ABS) shows that as of May 2024, the full-time adult average weekly ordinary time earnings across all industries and occupations was $2014.3 for men and $1782.8 for women.?For every dollar on average men earned, women earned 89 cents. That's $231.50 less than men each week.

Globally, according to the World Economic Forum’s Global Gender Gap Report 2024 , Global gender gap sees only a slight improvement and will still take five generations to close at current progress. In 2022, Australia was ranked 43rd in the world for gender parity now we’re ranked 26th. The representation, pay, and position of women in the workplace have improved significantly in recent years. Data from the Australian Bureau of Statistics (ABS) shows the gender pay gap is now the lowest on record at 13.8%. However, with our current rate of progress it is still expected to take 24 years to achieve gender parity.

What Drives the Gender Pay Gap?

1. Do women ask? The idea that gender pay differences are due to men being more proactive in salary negotiations may not be accurate. Recent studies have shown that the “women don’t ask” narrative doesn’t hold true among working adults. This challenges long-held beliefs about gender and salary negotiations.

2. More men in high-earning leadership positions. A significant factor contributing to the gender pay gap is the higher number of men in senior positions, often leading to greater bonuses. As highlighted in an article from the Australian Financial Review, “a major driver of the gap is the disproportionate number of men, relative to women, in high-earning and senior leadership positions across most Australian industries.”

The financial services industry remains one of the worst offenders, where discretionary bonuses tend to exacerbate pay inequality. Research from Monash Business School suggests that the bias against female leaders plays a crucial role in this disparity. “It’s not that women lack the competitiveness or risk-taking instincts that men have.

Rather, a general bias against female leaders results in them being assessed less positively and rewarded less generously than equally effective men.” These findings help explain why there are fewer female leaders: if followers don’t respond to female leaders, those leaders are more likely to face challenges in their roles.

What Can Employers Implement?

The gender pay gap is influenced by various factors, including discrimination, working hours, age, parental responsibilities, education, and gender norms around job types.

• Transparent Salaries

Salary transparency is gaining popularity as a method to combat pay discrimination. The idea is that if everyone knows each other’s pay, discriminatory practices can be identified and eventually eradicated, reducing the gender pay gap.

• Objective Performance Measures

Every employee contributes different strengths and value to a company, but measuring this is challenging. To successfully implement transparent pay, companies need to establish objective performance measures wherever possible. This is more straightforward in certain industries, such as sales, where individual revenue contributions can be measured. However, even in other industries, companies can identify objective criteria. For example, pay increases should correlate with an employee’s expanding role and responsibilities.

It’s also important to establish current market benchmarks for different job roles, ensuring employees understand they are being fairly compensated.

• Support Progressive Parental Leave and Work Flexibility

Women are still more likely than men to be primary caregivers. Offering paid parental leave and flexible work arrangements can support their career growth.

Additionally, as outlined in The Guardian, “When men take parental leave, everyone benefits. Studies show a woman’s earnings rise about 6.7% for every month of paternity leave taken by her husband.”