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Explainer: The Gender Pay Gap

December 9, 2018

Unless you’ve been living under a rock for the last decade, you’ve probably heard of this thing called the gender pay gap. Most likely you’ve heard people banging on about why it’s so terrible, but there’s a chance you’ve also met some people who don’t believe it really exists.


So let’s get to the bottom of this issue: what is the gender pay gap exactly, and why does it matter?

                                                                                  The thing called the gender pay gap. It's real. 

What is it?


Simply put, a gender pay gap is the difference between what men and women earn.


The current gender pay gap in Australia is 14.6%. That means, on average, a full-time working female earns 14.6% less than a full-time working male over a week. The organisation that calculates this number based on the data is called the Workplace Gender Equality Agency (WGEA).

What it doesn't mean is that a female who works in the same job as a male will receive less money for equal work. Although there have been high profile cases where this has been the case, that isn't what this statistic is saying. 

Why the pay gap?


The pay gap is a much more complex issue than it might seem at first glance, and there are many things that play into it. This includes bias in the hiring process, differences in jobs and industries, as well as the role of women as mothers.


1. Biased behaviour in hiring: For example, women in their 20s and 30s can face discrimination when they apply for a job, because employers want to avoid the risk of having to pay out parental leave if their employees suddenly decide to have a baby. On top of that, many employers don’t want an employee who needs to take out lots of time to care for a child, because it means the productivity of the business might decrease, or they’ll have to hire someone else. Discrimination on this basis is illegal but it does happen, unfortunately.


                                                              Maternal discrimination makes women trip and fall 



2. Men and women working in different jobs and industries: In general, industries that are mostly female - such as hospitality and healthcare - have lower wage levels. And yet, even in industries that are female-dominated, more often than not men hold senior managerial positions, and the pay gap is even more prominent.


3. Time taken out of the workforce as carers: Women are uniquely responsible for childbearing and breastfeeding. Although the choice to have a baby was probably the decision of both the mother and the father, often it’s only the woman who needs to pull out of the workforce to carry out these responsibilities.


Interestingly, the pay gap is different based on where you live in Australia. The pay gap is the biggest (i.e. inequality is the greatest) in Western Australia, where a lot of the mining boom action happened back in the mid-2000s up until a few years ago. The mining and construction industry, which is very male-dominated, received a massive boost. And of course, women weren’t the ones to reap the benefits.

Why does it matter?


The gender pay gap begins as soon as you enter the workforce.


If you’re a female and you want to work in law, education, economics, architecture, medicine or dentistry, among other fields, you can expect to earn less than your male counterparts from the get go.


Over a lifetime, it means that women have less financial security, independence and power than men. Lower lifetime earnings mean women have lower levels of superannuation (a compulsory percentage of a person’s income that is put aside for their retirement).


If you’re a male, you might be thinking, ‘well great, the pay gap means a head-start for me!’ Sorry to burst your bubble; unfortunately, the pay gap affects us all, not just women.


Lower wages mean women are less likely to want to participate in the workforce. If the human resources of an economy aren’t being fully used, then the economy can’t produce as much as it potentially could if more women were working. This can restrict the performance of an economy, which has flow-on effects for everyone. Lower economic growth means lower profit levels for businesses, lower levels of employment and lower general living standards.


                                                                                                  He said it.


Plus, fewer women in work means more women are receiving welfare benefits from the government. This reduces the amount of money that the government can use to improve infrastructure, healthcare, education and other things that benefit society as a whole.

What to do about it?


A couple of days ago, actress Rose McGowan called for women to walk out on work, to highlight just how important women are in the workforce and force employers to recognise the reality of the pay gap.



Recently, the Labor Party announced that if they were in government, they’d make it compulsory for large companies to publicly declare their gender pay gap. Labor believes that this would encourage companies to decrease their pay gap to maintain their good name.


Quotas for women, in government and in company boards, have been widely debated as a way to decrease the gender pay gap and counteract structural discrimination to get women to the top of their fields. In other words, it’s a way for women to break through the “glass ceiling”.


The pay gap of 14.6% is the lowest it’s been in 20 years in Australia. It’s definitely good news, but there’s a long way to go.


At the root of the issue are cultural attitudes that see women as less competent and less deserving.


Ultimately, that’s what we have the power to change.
















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