Gender pay gap in Australia
Gender pay gap in Australia refers to the difference between the average female and average male salary. It is calculated on the average weekly ordinary time earnings for full-time employees published by the Australian Bureau of Statistics. The gender pay gap excludes part-time, casual earnings and overtime payments.
A 2009 report by the National Center for Social and Economic Modelling (NATSEM) prepared for the Department of Families, Housing, Community Services and Indigenous Affairs stated:
"Using robust microeconomic modelling techniques, based on a comprehensive and critical evaluation of several methodologies, we found that simply being a woman is the major contributing factor to the gap in Australia, accounting for 60 per cent of the difference between women’s and men’s earnings, a finding which reflects other Australian research in this area. Indeed, the results showed that if the effects of being a woman were removed, the average wage of an Australian woman would increase by $1.87 per hour, equating to an additional $65 per week or $3,394 annually, based on a 35 hour week." (The second most important factor in explaining the pay gap was industrial segregation.)
Data collected by NATSEM for the Catalyst Australia publication, Equality Speaks, found that the gap between the average wealth of men and women also varies according to the occupations and industries in which they are engaged.
According to industry, the largest gap in personal wealth between men and women is within the ﬁnance and insurance sector ($330 600 versus $88 500) where many women work. By contrast, there exists only a small differential in the construction industry ($63 500 versus $62 700) where few women work. In other industries where many women work, there are large wealth gaps: for example, in health and community services ($174 000 versus $68 000) and retail trade ($84 000 versus $34 000).
Turning from industry to occupation, other signiﬁcant disparities are revealed. The greatest disparity between the average wealth of men and women is amongst elementary clerical, sales and service workers ($110 400 versus $19 900). Jobs that fall within this category include sales assistants, security guards and laundry workers. The smallest relative wealth gap can be seen in advanced clerical and service workers ($91 600 versus $83 500). Jobs in this occupational category include book-keepers, personal assistants and secretaries.
Ian Watson of Macquarie University also examined the gender pay according to occupation, specifically the gap among full-time managers in Australia over the period 2001-2008. He found that between 65 and 90% of this earnings differential could not be explained by a large range of demographic and labor market variables. Watson notes that a "major part of the earnings gap is simply due to women managers being female." He also found that despite the "characteristics of male and female managers being remarkably similar, their earnings are very different, suggesting that discrimination plays an important role in this outcome."
Economist Paul Miller explored the degree to which the Australian gender pay gap differs across the wage distribution and found that the gender pay gap was much greater among high wage earners than among low wage earners. At the top of the wage distribution (95th quantile) the pay gap reached 25% or more while at the bottom the pay gap was around 10%. He concluded that "the notion of a ‘glass ceiling', whereby women struggle to advance beyond some point in the more typical career path, is certainly prevalent in the Australian labour market." In a similar study, Hiao Joo Kee found that the gender pay gap increased at higher levels of the wage distribution in the private sector – leading to her conclusion that a glass ceiling existed there – but that the gap in the public sector was "relatively constant" over all percentiles. Moreover, Kee found that the acceleration of the pay gap across the wage distribution does not vanish even after extensive controls. She concludes that the gender pay gap in both sectors was a result of differences in returns to the same characteristics between men and women.
Trends in the Australian labor force
In 2010 Australian females represented 50.2% of the Australian population and 45.3% of the workforce. Trends within the Australian labour force have female workforce participants increasingly more educated than their male counterparts with more females completing year 12 and going on to university than males - in 2008 females made up 55 per cent of students enrolled in Australian tertiary institutions. In 2010 Finance was the industry with the widest gender pay gap at 32.2%, followed by Health Care and Social Assistance at 27.2% and Mining at 22.7%.
Cases and legislation
Until 1969, legislation allowed employers to pay women a minimum rate of pay that was 25 per cent less than male employees doing the same or similar work.
In 1969 the first federal pay case established the principle of equal pay for equal work. The 1969 case established a principle that affected 18 per cent of women workers, mostly teachers and nurses.
In 1972, the second federal equal pay case widened the 1969 principle to equal pay for work of equal value in line with International Labour Organisation's Equal Remuneration Convention, 1951 (100). This meant that women were awarded the same rate of pay as men - no matter what work they were doing, as long as it was assessed as comparable in value. New South Wales (NSW) was the first Australian industrial jurisdiction to legislate for equal pay in the Female Rates (Amendment) Act in 1958. In 2000, the NSW Industrial Relations Commission created Australia’s first Equal Remuneration Principle (ERP). The principle provides an avenue for unions to seek redress where they believe work has been undervalued on a gender basis. In 2002, the Full Bench of the NSW Industrial Relations Commission fully ratified the Crown Employees (Librarians, Library Assistants, Library Technicians and Archivists) Award 2002, which incorporated pay increases of up to 26%.
The Commonwealth Affirmative Action (Equal Employment Opportunity for Women) Act 1986 was enacted to improve equity in the Australian workforce and establish the Affirmative Action Agency. It aimed to promote equal opportunity for women in employment and eliminate discrimination by the employer against women. In 1999 the agency was changed to the Equal Opportunity in the Workplace Agency to administer the Equal Opportunity for Women in the Workplace Act 1999 (Commonwealth). In 2009 an Australian House of Representatives Pay Equity Report called on the Commonwealth Government to elevate pay equity to be a clear objective of modern awards and recommended the establishment of a federal Pay Equity Unit and the conducting of mandatory pay equity audits for companies with 100 employees or more.
Western Australia has the largest gender pay gap of any state or territory in Australia. As of August 2010 it was 24 per cent, representing a gap between average weekly ordinary time male and female earnings. Research has failed to adequately account for all the factors that underpin Western Australia’s relatively large gender pay gap and thus explain why its gender pay gap is higher than the rest of Australia, which was 17 per cent in August 2010. A specialist Pay Equity Unit in Western Australian was established in 2006 to address the State's gender pay gap. The Western Australian Pay Equity team in the Department of Commerce developed the WA Pay Equity Audit Tool, a resource for employers to use in assessing workforce data and assist in the development of strategies to improve pay equity and female career progression in the workplace. The Tool was adopted nationally by the Equal Opportunity in the Workplace Agency.
- Department of Commerce. Frequently asked questions about pay equity. Retrieved on May 06, 2011.
- National Centre for Social and Economic Modelling. The impact of a sustained gender wage gap on the economy. Report to the Office for Women, Department of Families, Community Services, Housing and Indigenous Affairs, 2009, p. v-vi.
- Equal Opportunity for Women in the Workplace Agency. 6302.0 - Average Weekly Earnings, Australia, May 2013. Australian Government, 2013.
- Catalyst Australia, Equality Speaks Chapter 10, 2009
- Watson, Ian (2010). Decomposing the Gender Pay Gap in the Australian Managerial Labour Market. Australian Journal of Labour Economics, Vol. 13, No. 1, pp. 49-79.
- Miller, Paul W. (2005). The Role of Gender among Low-Paid and High-Paid Workers. Australian Economic Review, Vol. 38, No. 4, pp. 405-417, quote p. 413-414.
- Kee, Hiao Joo (2006). Glass Ceiling or Sticky Floor? Exploring the Australian Gender Pay Gap. The Economic Record, Vol. 82, No. 259, pp. 408-427.
- Toohey, Tim, David Colosimo & Andrew Boak (2009). Australia’s Hidden Resource: The Economic Case for Increasing Female Participation. Melbourne: Goldman Sachs JBWere Investment Research, p. 3.
- Department of Education, Employment and Workplace Relations. Student 2009 Full Year: Selected Higher Education Statistics.
- Australian Bureau of Statistics, Average Weekly Earnings. Catalogue 6302.0, Time Series Tables 10A & 10D.
- Equal Pay Case 1969 - (1969) Volume 127 Commonwealth Arbitration Reports p. 1142.
- Brenda Finlayson. Equal Pay – We’ve Come A long Way. Workers Online, Issue No 17, 11 June 1999.
- C100 Equal Remuneration Convention, 1951.
- NSW Industrial Relations. A history of pay equity.
- Equal Opportunity for Women in the Workplace Agency. Overview of the Act.
- Parliament of Australia, House of Representatives. Inquiry into pay equity and associated issues related to increasing female participation in the workforce.
- Australian Bureau of Statistics. Labour Force. 6202.0, Table 8, November 2010 (trend data)
- Department of Commerce. Frequently asked questions about pay equity.
- Equal Opportunity for Women in the Workplace Agency. The Pay Equity Audit Tool.