Women's Poverty in 2022: Why it's time to make a change

In 2022, at the current rate of progress – it will take 132 years to close the global gender pay gap and women in this country currently earn 22% less than men. That’s 78c for every dollar that men earn. In real terms – that’s $263.90 less weekly on average. And this is only part of the complex picture contributing to women’s poverty in Australia.

When it comes to pay, participation and progression in the workforce, women disproportionately face a number of challenges contributing to gendered poverty – with more than a third of single women living in poverty by the age of 60. We’re taking #antipovertyweek to breakdown some of the key reasons why women fall so far behind by the time they reach retirement, and what businesses can proactively do to help.

Why women are disproportionately falling into poverty

The 'motherhood penalty'

According to a recent Treasury report, women see their earnings on average decline by more than half in the first five years of parenthood – with women more likely to assume the role of ‘stay at home parent’ – taking time out of the workforce or reducing their work hours after having a child.

According to the report, men’s and women’s earnings follow a similar path until parenthood, at which point women’s earnings see a significant drop – remaining lower for at least a decade. While men’s earnings generally remain unaffected.

The cost of caring

Research from the University of Sydney, reveals women without children are not exempt from the trappings of poverty – being ?far more likely to experience interruptions to their careers later in life – with women over 45 without children taking on a disproportionate share of caring for family members who are aging or have a disability.

The lost super opportunity

Income is only part of the story of lost earnings in the here and now. Taking time out to care for loved ones not only leads to a loss of salary today, it also leads to lower superannuation balances in the future. With lost time in the workforce contributing to curtailed career opportunities for pay-rises, promotions and networking.

Financial impact of violence against women

About one in three women from the age of 15 have experienced abuse from a current or past intimate partner – with violence and trauma having a debilitating and often lasting effect on women’s mental and financial health.

The gender pay gap

A key contributor to the gendered poverty picture – is income. And the pay gap provides a major clue to the disparity. Over a lifetime the cumulative average gap in earning is said to average $1.5M. While caring is one aspect of this, there are many other factors that affect the disproportionate share of income.

Industries dominated by women pay less

For one, women are more likely to work part-time and in industries that are lower paid (e.g. retail social services, health and education), whereas men tend to work in higher-paid industries (e.g. mining and construction). And while the balance at the management level is changing (there has been an increase in the proportion of women in the male-dominated Manager occupation, up from 28.3% in 1998 to 36.18% in 2018) there is still a fair way to go to reach parity.

Senior-leadership roles and full-time work continue to be dominated by men

While we’ve seen women’s participation steadily increase over time – there continues to be disparity in middle and upper Management. At the current rate of change, CEW projects it will take up to 100 years to achieve gender balance in CEO roles in Australia. The glass-ceiling is real.

In fact - we seem to be going backwards. The growing number of companies with no women in their senior leadership ranks is concerning -?up from 44 last year to 46 ASX300 companies. In addition, almost two thirds of ASX300 companies and around half of ASX100 companies have no women in line (succession) roles. With reasons – including:

• Entrenched biases manifesting in recruitment and selection processes (where women and men are selected for roles and occupations ‘suited’ to gender)
• Lack of clear targets and strategies to address the balance – and a commitment to make real change
• Lack of visibility of the disparity – companies and boards simply don’t have the data required or the know how to address the disparity with confidence

And while the divide in the upper ranks – is a far cry from the issue of the gendered poverty trap – the two are interrelated – with entrenched cultures in organisations contributing to perpetuating broken systems, processes and behaviours. It’s time to make a change.

So, what can my business do to help dismantle the poverty trap?

While the poverty trap is a complex societal issue that will require governments, leaders, businesses, and people to engage together to make meaningful change – as business leaders we have the power to make a difference. Here’s some helpful tips and advice to get you started:

• Lift the benchmark on pay from the get-go: Set clear targets and take strategic action to close your gender pay gaps – to even the playing field.
• Level up the balance on representation: Reduce the influence of gender bias in recruitment and promotion processes by equipping and empowering leaders and managers to make a change. Raise awareness around common misconceptions, create more objective systems for selection and have policies and guidelines to ensure equity.
• Foster flexibility – build a supportive culture: Consider flexible working arrangements, job-sharing, extended career leave, parental leave, and childcare as part of your strategy to support your people. Regardless of which strategies and actions you choose - make your supports visible, accessible and available to all employees regardless of their gender or role.
• Support victims of family violence: Create a culture of psychological safety – leave the door open for the conversation. Empower and educate managers. Make resources visible and available (e.g. EAP programs).
• Equity that goes both ways and benefits us all: Foster a culture which supports shared parental responsibilities. Encourage men to take parental leave and work flexibly to promote shared family and caring responsibilities. Hero their stories and get leaders to champion the support that’s available by leading the way. After all – it starts at the top.

Need support with your strategy? We’re here to help.

These tips are just the beginning. equidi is a world-first platform that’s committed to leveling up the ledger on gender this century. With a full suite of resources, policies, strategies, and action plans to help you close the gender gap for. So, join us here to find out more about how you can make your world of work – even. better.

#antipovertyweek #womeninpoverty #povertytrap #genderequity #genderequality #inclusion #diversityandinclusion #deandi