Gender Pay Gap: trending down – but still 118 years to reach equity

Susan Ferrier, National Managing Partner, People, Performance Culture
Susan Ferrier, National Managing Partner, People, Performance Culture
Every year the Workplace Gender Equality Agency (WGEA) marks Equal Pay Day.  This day represents the number of additional days in the financial year that women must work to earn the same as men[1].

In 2016, this day is marked today, the 8th of September – this is 70 days from 1 July.

The good news is latest data from the Australian Bureau of Statistics shows we now have a reduction in the gap for the second year in a row – down to 16.2 percent.  After a decade of trending the wrong way (that is, the pay gap actually increased for 10 years), this is welcome news.

But when you consider that in 1996 the gap was 17 percent[2], the pace of change is slow.

We need to find a way to speed this up. The World Economic Forum calculated last year that at the current rate, it would take until the year 2133 to close the gap – another 118 years.

Unfortunately if the best we can achieve in Australia is 0.8 percent in the last 20 years, it may take us even longer.

This problem seems huge and intractable, but we simply must address it. The longer we continue to ineffectively use the entire workforce available to us, the more we constrain our nation’s current and future prosperity[3].

The gap is hard to communicate, and it’s hard to identify easily remedied causalities. This is not unique to Australia – it’s a global issue.

The World Economic Forum published a Global Gender Gap Index in 2015, which ranked Australia as 63rd for wage equality (out of 134)[4].

Who was #1? Rwanda. 

After the horrific events in Rwanda in the 1990s, structural economic changes were required to rebuild, and women demanded greater participation in professional and public life.  Similar outcomes have been found in other war-torn nations.

In the absence of such a confronting platform for change, it is worth learning from the experience of our global peers who are walking this path alongside us.  Whilst a few of the examples below are driven by government policy, some are easily adapted by corporate Australia.

Norway (ranked #2)

Twenty years ago, Norway introduced a 10 week paternity leave provision for new fathers.  In the intervening period, not only has it become culturally accepted for fathers to take this time out[5], with up to 90 percent of fathers now doing so, and the wage gap has drastically reduced, from nearly 20 percent in 1991 to 8.1 percent in 2010[6].  This drop is associated with a range of measures, including board quotas.

New Zealand (ranked 27th)

New Zealand has very publicly outlined the gender wage gap for public sector employees across departments and age groups, within their broader diversity reporting[7], as well as the establishment in 2015 of a Joint Working Group to provide practical guidance to employers and employees in implementing pay equity[8]. These are commendable steps, and it will be fascinating to see how these initiatives impact the wage gap for our close neighbour.

United States (ranked 74th)

A new law in Massachusetts prohibits companies from asking prospective employees about their previous salary range, mitigating the likelihood of pay inequalities being carried from role to role[9].

Closer to home we see initiatives including that of ANZ making additional superannuation contributions to all women in their workforce, as well as all personnel who take parental leave[10].

As I write this, I think of the world that my children tell me they want to grow up in – that is a world characterised by equality, fairness, hope and opportunity for everyone.

They are dismayed that it takes 70 additional days for women to earn the same as men.  They want this to change in time for them entering the workforce!  And I think many of us feel the same anxiety on this issue – it might seem really hard but it’s important to keep talking, listening and taking action.

Later this month KPMG along with our partners the Diversity Council Australia and the Workplace Gender Equality Agency will release an update to our 2009 report “Understanding the Economic Implications of the Gender Pay Gap in Australia”, where we will present some truly practical ideas for organisations of all sizes and levels of maturity to take on.

Only about thirteen days to go, and counting . . .

@SusanFerrier2

[1] https://www.wgea.gov.au/wgea-newsroom/save-date-8-september-equal-pay-day
[2] WGEA Gender Pay Gap Statistics February 2013, Figure 1:  Gender Pay Gap, Australia, November 1994 – May 2012
[3] KPMG Understanding the Economic Implications of the Gender Pay Gap in Australia 2009 for the Diversity Council Australia
[4] http://reports.weforum.org/global-gender-gap-report-2015/appendix-c/  Table C2:  Wage Equality Survey
[5] https://www.theguardian.com/money/2011/jul/19/norway-dads-peternity-leave-chemin
[6] http://www.oecd.org/gender/Closing percent20the percent20Gender percent20Gap percent20- percent20Norway percent20EN.pdf
[7] http://www.ssc.govt.nz/sites/all/files/GenderPayGap2015.pdfhttp://www.radionz.co.nz/news/national/294648/gender-pay-gap-young-women-told-to-think-big
[8] http://www.ssc.govt.nz/pay-equity-working-group-terms-reference
[9] http://time.com/money/4448143/ban-salary-history-wage-gap/
[10] http://www.women.anz.com/at-anz/we-are-bridging-the-super-gap

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