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The Gender Wage Gap

Words by Shreshtha Gupta

What is it, why does it persist and what can we do to improve the situation?

 

While women continue to thrive in a wide range of professional fields, a prominent gender wage gap nevertheless persists, with women earning up to 24.4% less than their male counterparts in professional, scientific, and technical services (WGEA).


The gender wage gap is defined as a measure of the difference between the average earnings of women and men in the workforce according to the WGEA (Workplace Gender Equality Agency). It is an internationally established measure of a woman's position in the economy relative to men and is a result of social and economic factors that combine to reduce a woman’s earning capacity and income over her lifetime.


The gender wage gap is not to be confused with the difference between two people being paid differently for work of the same or comparable value. This is defined as unequal pay which is illegal in Australia under the Fair Work Act 2009 (Cth). Pursuant to this, organisations are obliged to pay employees the same amount for completing comparable work. If this is not satisfied, the Fair Work Commission has the ability to make an equal remuneration order mandating both employees to be paid equally per s 302(1).


The gender wage gap results from prejudice not only at a personal level between employers and employees, but is also a product of numerous social and economic factors that combine to reduce a woman’s earning capacity over her lifetime, making it likely that she would earn less, accumulate less superannuation and savings, and advance in their careers to a lesser degree compared to their male counterparts.


This is a symptom of broader cultural problems in the workplace, ultimately reflecting the historic and systemic undervaluing of women’s workplace contributions and other significant barriers that lead to the under-representation of women in senior executive and management roles. While we celebrated the 50th anniversary of Australia’s industrial relations system endorsing the ‘equal pay for equal work’ principle in 2019, the gender pay gap nevertheless persists five decades on. Although the development of corporate social responsibility has encouraged an emphasis on female professionals occupying leadership roles in the workplace, a worrying pattern of female-dominated jobs being clustered at the lower end of the pay spectrum, dating back a century, still prevails today.


Court decisions of the 20th century reflect this viewpoint, with the Harvester’s Case (1907) establishing minimum wage on the basis of a male labourer, excluding female workers from the picture. Additionally, the court’s first explicit ruling on women’s pay in the Fruit Pickers Case (1912) promotes a problematic notion that women should only be paid the same as men when completing jobs predominantly performed by men or when women workers are ‘in competition’ with men, out of concern that allowing a lower pay rate for women could put men out of employment. A lower wage for women was further supported by the flawed assumption that women are already equipped with food, shelter and clothing, by virtue of a man’s obligation to provide for their wife and children, and therefore did not require the same wage as a man. However, the progression of social attitudes following the 1950’s as more women began to join the workforce and the pressures to match international conventions regarding equal pay led to the acceptance of the ‘equal pay for equal work’ principle per the Equal Pay Case (1969) .


However, despite being accepted in law, equal pay is contingent on men and women doing work of an equal nature, which is often not the case due to sex-based discrimination and perpetuating stereotypes at the detriment of women in the workforce. Whether it be due to societal expectations of gender roles or other personal factors, women and men have statistically gravitated towards occupations of different nature, thus raising the challenge of measuring work of ‘comparable value’ which still persists today. The Fair Work Commission strives to meaningfully measure and compare the value of jobs from vastly different industries, especially considering occupations in the area of health services, childcare and schooling which yields exceptional society-wide benefits but does not necessarily attract the respective pay. Currently, the Workplace Gender Equality Agency (WGEA) strives to address the underlying social and economic factors that have been identified to contribute to the gender wage gap, they are as follows;


  1. Conscious and unconscious discrimination and bias in hiring and pay decisions and promotions. This affects women’s access to certain positions of a higher status, attracting higher pay.

  2. Women and men working in different industries and different jobs attracting lower wages. Expectations about gender roles continue to shape career choices.

  3. Lack of workplace flexibility to accomodate domestic, caring and other responsibilities, especially in senior roles. Although some companies provide for maternity leave and other provisions for parental leave, such lack of flexibility is prevalent where women, who have the predominant domestic responsibilities additional to their role at the workplace, are expected to perform to a similar capacity as a man who may not have such extensive domestic responsibilities in order to gain equal pay.

  4. High rates of part-time work for women attract lower employee rights and wages for women.

  5. Women’s greater time out of the workforce arising from maternity leave and caring responsibilities impacting their career trajectory and progression.

  6. Women’s disproportionate share of unpaid caring and domestic responsibilities.


Closing the gender wage gap goes beyond just ensuring equal pay - it requires cultural change to remove barriers impeding women and promoting equal participation of women in all aspects and varying levels of the work. According to Klynveld Peat Marwick Goerdeler (KPMG) and WGEA’s Equal Pay campaign She’s Price(d)less, gender discrimination, family responsibilities, uneven workforce participation and gender segregation in professional industries were found to be the main contributing factors to the gender wage gap. Some recommended ways to address this is are as follows:


  1. Addressing discrimination in work practices such as hiring, promotion and promoting equal access to training and novel professional opportunities. For example, automobile manufacturer General Motors strives to instill equitable practices in every area of its operation, such as offering flexible hours and training bootcamps for female employees to enable them to work around any carer or domestic responsibilities.

  2. Increased pay transparency and reporting on gender wage gaps.

  3. Undertaking gender pay gap audits and acting on findings to prepare a fair and equal remuneration policy. Beauty brand L’Oreal is amongst the top ranked companies to achieve gender parity and equal pay by virtue of conducting a thorough gender pay gap analysis and publicising the results for social accountability.

  4. Improving work-life balance and flexibility.

  5. Enhanced availability and uptake of shared parental care, such as promoting paternity leave. Norwegian bank DNB is lauded for being one of the most gender-diverse corporations globally in 2021, as it goes above and beyond to ensure that women are not disadvantaged when having children by offering a minimum of 20 weeks paid parental leave and supplemental pay.

  6. Challenging workplace culture and addressing unconscious bias prevalent within day to day activities, such as ensuring involvement of female employees in higher profile tasks. Despite being positioned in a male-dominated industry, automobile manufacturer General Motors (GM) is one of the three companies to achieve true equal pay worldwide. This was achieved through offering a women’s dealer program, appointing a female CEO and CFO and having a board of directors comprising predominantly of female representatives.

  7. Increasing the share of women in leadership positions, through targets, quotas and internal company goals.

  8. Developing educational modules and a network of advocates and mentors to promote gender equality in the workplace.


Although the gender wage gap has persisted for decades, the fact that women earn 13.8% less than men on average (an equivalent of $255.30 less for women) (WGEA) simply on the basis of their gender reflects an unjust prejudice imposed against women in the workforce and urges us to dismantle the systemic cultural problems in the workplace.


 

Shreshtha Gupta is a second year Law (Hons.) / Commerce student at Monash University majoring in Finance and is the LSS Education Publications officer and a guest contributor to the Reasonable Observer. As a member of the Women’s Right group of the Just Leadership Program, Shreshtha is interested in women’s rights, social justice and reform, particularly in gender equality within the workplace and legal professional settings. During her work with women’s rights initative, she is currently working to develop a financial literacy resource aimed at young women to encourage fiscal responsibility and independence. Additionally, while working as a legal assistant, Shreshtha strives to expand her legal work experience and advocacy, problem solving, legal research and oral and written communication skills in a paralegal role.

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