Leonora Risse* bursts open some of the common arguments used to deny the existence of the gender pay gap in Australia.
Image: Olivier Le Moal
Australia’s gender pay gap currently sits at 14 per cent.
Australian full-time working women take home an average of $1,485 per week in pay, while full-time working men take home an average weekly pay packet of $1,726.
This gap of $241 is calculated using the latest workforce earnings survey information collected by Australian Bureau of Statistics (ABS).
Now, there may be many people reading this who believe that the gender pay gap is a load of nonsense.
Or who are confused by what it all means.
At a first glance, the concept of the “gender pay gap” might not make sense.
Especially because it’s against the law to pay workers different rates for doing the same job.
As an economist who studies the labour market, I want to address some of the commonly expressed concerns.
The gender pay gap is a myth
In Australia’s industrial relations system, it is illegal to pay a woman less than a man when they’re employed to do identical jobs.
This law stems from the 1969 Equal Pay Case and is reflected in several subsequent pieces of legislation.
But paying workers the same rate for doing exactly the same job simply reflects the basic moral principle of “pay equity” — which is not the same thing as the “gender pay gap”.
The gender pay gap is a calculation of the difference in female earnings compared with male earnings across all jobs and industries. It reflects a combination of factors.
Women earn less because they work less
If you’re thinking that women take home less money than men because they usually work fewer hours in paid employment, you’re right.
Around 45 per cent of working women are employed part-time, compared with less than 20 per cent of working men.
This reflects the reality that many women are juggling paid work alongside family and caring responsibilities.
This is why the gender pay gap calculation is based only on full-time earnings.
(Although, if we include part-time workers and calculate hourly wages, the gender pay gap still exists.)
Women earn less because they work in industries that pay less
If you’re thinking women receive lower pay because they gravitate towards lower-paid industries such as education, healthcare and social assistance — while men are concentrated in higher-paid industries — again, you’re right.
Some people argue, therefore, that if women wish to earn more, they should move out of traditionally female fields.
While this might sound like logical advice, imagine what would happen to society if we started losing nurses, schoolteachers, childcare workers, and so on?
The problem is the true value of many of these “human services” jobs is dispersed widely throughout society — the benefits are not immediately visible and not fully reflected in their low wages.
Women earn less because they do less dangerous work
Possibly you believe that female-dominated jobs don’t need to be paid as much because they are less risky and demanding.
The highest rates of workplace fatalities are reported in male-dominated industries — transport, warehousing, agriculture and construction.
This is largely reflective of the physical element of these jobs.
Fatalities are undeniably the ultimate tragedy, though also not the only way to measure danger.
If we look at the top 10 jobs with highest number of claims for workplace-related mental stress, we find female-dominated professions of health and welfare support, nurses, personal carers and schoolteachers, alongside paramedics, defence personnel, police officers, and transport drivers.
Stress in these occupations often comes from exposure to violence or a traumatic event, assault, harassment and bullying.
Women earn less because they work in lower-ranked jobs
Again, you’re right.
Within most workplaces, men are more heavily represented among the senior occupational roles such as managers and CEOs.
Men tend to climb the career ladder more rapidly than women.
Taking time out of the workforce to raise children is one of the obvious factors that interrupts women’s career progression.
Remaining out of the workforce after having children is not always by choice.
But even if we remove the effect of motherhood, childless women do not necessarily reach senior ranks as quickly as men either.
And even when women reach management levels, they still earn less than their male counterparts.
Women earn less because they lack ambition and confidence
While it might be perceived that men are more strongly motivated by money, there’s no consistent evidence that women flounder in terms of career ambition.
Women are now surpassing men in terms of post-school educational achievements.
Surely pursuing educational qualifications, especially at university level, takes ambition.
It’s true that men generally report stronger confidence in their capabilities than women.
And higher levels of confidence are linked to higher pay.
But the sticking point here is that there is no economic evidence that higher confidence makes a worker any more productive and valuable.
Quite the opposite: an overconfident person can be more of a liability through reckless decision-making.
Any advice offered to women to lift their confidence as a way to boost their earnings is not backed up by any solid evidence.
On the contrary, there’s greater risk that women who show assertiveness and ambition will be perceived unfavourably.
Women earn less because they are worse at negotiations
It’s now been shown that Australian women ask for a pay rise just as often as men, but are less likely to be awarded it.
And if we add in bonuses and allowances, the gender gap in total remuneration widens further.
Men are accruing more through negotiating — but any suggestion that women need to bargain more aggressively is not the solution, as women bear the risk of backlash for showing assertiveness in the workplace.
Often it’s the subtle influence of unconscious bias that makes all of us lean towards men for senior roles and reward them with higher pay — simply because it’s the societal template we are accustomed to.
OK, but why should I care about the gender pay gap?
Taking home lower pay means women are less financially empowered than men.
This has rippling effects, such as having less money for a home loan, and less superannuation to cover their retirement.
The 14 per cent pay gap means women would need to work an additional 59 days — that’s nearly two months extra — to catch up to the same pay packet as men over the course of a year.
What can we do about it?
There are many everyday steps workplaces can take to close the gap in pay and employment opportunities.
As individuals, the most important step you can take is to recognise that the gender pay gap exists.
* Dr Leonora Risse is an applied economist, Vice-Chancellor’s Postdoctoral Fellow at RMIT University and a Research Fellow with the Women and Public Policy Program at the Harvard Kennedy School. She tweets at @leonora_risse and her website is leonorarisse.com.
This article first appeared at www.broadagenda.com.au.
