‘Lost opportunity’: Gender bias stalls progress on closing pay gap

Key points

  • The national pay gap is equivalent to about $966 million per week or $51.8 billion a year, according to the KPMG report. 
  • The biggest pay discrepancy is in the education and training sector, with women paid an average of $6.33 an hour, or 13.8 per cent, less than men.
  • The gap was the smallest in manufacturing, with women paid an average of 87 cents an hour, or 2.2 per cent less.

Women are being paid an average of $2.55 less an hour than men, more than a third of it due only to their gender.

A new report by economic consultants KPMG warns that progress in Australia closing the gender pay gap has stalled, despite recent changes such as major investments in childcare, superannuation reforms and the introduction of government-funded paid parental leave.

It found that in 2020, women were paid an average of $36.89 an hour, compared to $39.44 for men – a gap of $2.55, or 6.5 per cent, up from 5.8 per cent in 2019.

Using data collected by the Melbourne Institute’s Household Income and Labour Dynamics in Australia survey, it calculated that about 51 cents of the hourly pay gap could be explained by women tending to take more time away from paid work to raise children.

It chalked a further 27 cents up to a higher proportion of part-time work for women, while 50 cents was attributed to different types of work favoured by women, with a higher proportion employed, for example, in lower-paid industries such teaching and primary care, and a lower proportion in higher-paid industries like mining.

A further 37 cents could be explained through a range of miscellaneous factors, such as slightly different average ages and length of tenure in jobs.

KPMG national chairman Alison Kitchen says closing the gender pay gap would have major economic benefits.Credit:Alex Ellinghausen

According to the report, released jointly by KPMG, the Diversity Council Australia and the federal government’s Workplace Gender Equality Agency, 91 cents, or 36 per cent, of the hourly pay gap could not be explained using measurable data. That led the report’s authors to put the discrepancy down to gender discrimination.

KPMG chairman Alison Kitchen said that, since the last report was released in 2019, the gender pay gap had remained stubbornly unchanged, despite action across the public and private sectors to tackle gender inequality.

“This report shows that gender discrimination continues to be the single largest contributor to the gender pay gap,” she said.

Kitchen said the national pay gap was equivalent to about $966 million per week or $51.8 billion a year. She said greater efforts to close the gap would have major economic benefits.

“We see that just as a lost opportunity, she told The Age and the Sydney Morning Herald. “You know, if we could really change that, we would be a billion dollars a week more flowing into the economy at a time when you know unemployment is at 3 per cent and every business wants more workers, better qualified workers, people working more hours, whatever they can get.”

The report found the biggest pay discrepancy was in the education and training sector, with women paid an average of $6.33 an hour, or 13.8 per cent, less than men. It said although women accounted for 70 per cent of total employment in that sector, they made up just 53 per cent of management positions.

A large gap also existed in healthcare and social assistance jobs, with women paid an average of $4.88 an hour, or 11.3 per cent less than men.

The gap was the smallest in manufacturing, with women paid an average of 87 cents an hour, or 2.2 per cent less, while accounting for a proportionate 24 per cent of total manufacturing employment, and 24 per cent of management roles.

Policies that focus on equal access to workplace support for men and women are important for correcting the gap, WGEA director Mary Wooldridge says.Credit:Eddie Jim

Workplace Gender Equality Agency director Mary Wooldridge, a former state Liberal MP, said employers needed to work harder to close the gap, including boosting the share of women in leadership positions, and making it easier for both men and women to take parental leave and to work flexibly.

The report suggested the coronavirus pandemic could have represented a setback. In 2017, women were paid an average of 7.2 per cent less per hour. This fell to 6.4 per cent the following year, and then 5.8 per cent in 2019, before edging back up to 6.5 per cent in 2020.

Working from home tended to favour higher-paying jobs with a higher proportion of men, partly explaining the increase in the pay gap.

It follows a recent report by the federal Workplace Gender Equality Agency that found the pay gap widens when women turn 35, with women earning $7.78 for every $10 earned by their male counterparts. The disparity worsens over the next 20 years, with a slight improvement once women turn 65, but never reaching parity.

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