Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Pay equity: two steps forward but one big step back!

By Nareen Young - posted Monday, 29 November 2010


The Australian Bureau of Statistics released figures in November 2010 that show, across Australia, women's average full-time weekly earnings are now 16.9 per cent less than men’s. When part-time and casual work is taken into consideration, the total earnings gap between men and women is 35.3 per cent.

This gender pay gap has a significant impact on women's lifetime earnings. AMP NATSEM’s She Works Hard for the Money: Australian Women & the Gender Divide (PDF 1.83MB) report quantified that the gender pay gap over a lifetime accumulates to an average earnings deficit of $1.5 million for all women; and $1.8 million for those with bachelor degrees or higher.

Thankfully there is widespread support in the community for addressing the problem. Auspoll polling (PDF 260KB), commissioned by Diversity Council Australia (DCA) and conducted during the recent federal election campaign, showed that 76 per cent of Australians agreed that steps should be taken to close the pay gap. However, some still don’t really understand the extent of the problem or the urgent need to act.

Advertisement

The “equal pay” concept that requires we pay women and men equally for doing the same work is enshrined in Australian industrial law. But this is only part of the story. “Pay equity” is a much broader concept that considers the value we place as a community on work that is gender-segregated across industries or occupations. Achieving real pay equity therefore means paying men and women equally for work of equal value.

So why is some work more “equal” than others? Our society has traditionally valued certain types of work more highly. Jobs such as healthcare, education and even human resources in a business context, have traditionally been seen as feminine and have been paid less because they are seen as “softer” and less important. Jobs that are perceived as more masculine such as engineering, senior management and stock-broking are seen as requiring tougher skills and have been traditionally more highly valued.

Pay inequity is exposed when comparing industries but it can also be found within organisations where men and women are segregated into different roles. Women are over-represented in lower-paid industries and in lower-paid occupations. They are also under-represented in higher paid occupations. For example, of the top 200 companies listed on the Australian Stock Exchange, women hold only six CEO positions and 8 per cent of Executive Key Management Personnel positions in 2010.

KPMG’s report, Understanding the Economic Implications of the Gender Pay Gap, commissioned by DCA, revealed that occupational and industry segregation, where there are differences in types of occupations and industries in which men and women typically work, together account for 28 per cent of the pay gap. Sex discrimination is also likely to account for another 35 per cent of the gap.

There are sound economic reasons why the gap should be addressed. Goldman Sachs JB Were’s landmark report, Australia’s Hidden Resource: The Economic Case for Increasing Female Participation (PDF 345KB), estimated that closing the gap between male and female employment will boost Australia’s GDP by 11 per cent and increase economic activity by over 20 per cent.

The KPMG report also found that closing the gap would result in greater competitiveness and economic output as workers would be better matched to their capabilities; companies would reduce costs through lower turnover rates; and individuals with the best skills and firm-specific knowledge would remain with the company.

Advertisement

This year has seen some encouraging progress in addressing the gap. The Australian Services Union and other unions initiated an equal remuneration order under the Fair Work Act for the social and community services sector. Under the test case, the unions are arguing that for too long the community services sector, which employs 85 per cent women and the highest number of multiple tertiary degree holders, has been under-valued and under-resourced.

Unfortunately, this progress has been dealt a blow with the federal government withdrawing its support for the funding component of the test case at the present time. The government is now presenting an alternative argument, claiming it will have too big an impact on the budget bottom line immediately post-GFC.

DCA understands the bottom line and the surplus issue. As the independent, not-for-profit diversity advisor to business in Australia, we were established by Australian business more than 25 years ago. We recognise that addressing the problem may initially cost more but strongly believe there is plenty of evidence that it will result in significant economic benefits in the longer term.

Leading employers understand why pay inequity needs to be addressed. DCA members Telstra and National Australia Bank have already conducted pay equity audits in their own businesses to identify and address issues. Many DCA member organisations are working hard to adopt strategies to remove barriers to workforce participation and career progression for female employees that will help close the pay gap. This includes increasing female representation in non-traditional industries or occupations, addressing over-representation in roles that are typically undervalued and underpaid, increasing women’s representation in senior roles and providing greater opportunities for flexible working.

If businesses are committed to closing the gender pay gap, then surely government should be able to support doing so in the community services sector?

We urge the government to reconsider its position on the test case and the timing of funding the inevitable wage increases in the community sector. The persistence of the gender pay gap in Australia results in a serious misallocation of resources across the economy and costs the country in growth and competitiveness.

The fact that women are not being employed in the jobs to which their skills and experience are best suited, or, if they are, their contributions are not being fully valued, represents a colossal waste of talent as well as a drain on productivity.

Given the strong economic case and clear public support, why are we turning our backs on an issue that directly affects half the community and, by extension, the economic productivity of and educational investment in such an important labour resource?

Not to mention the fact that it’s simply unfair for women’s contribution to continue to be so undervalued.

We encourage politicians of all persuasions to turn their attention to addressing gender pay equity as a critical issue, both for women and for the economy of Australia.

  1. Pages:
  2. 1
  3. 2
  4. All


Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

21 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Nareen Young is the CEO of the Diversity Council Australia.

Other articles by this Author

All articles by Nareen Young

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Article Tools
Comment 21 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy