Closing the Gender Pay Gap makes good economic sense
Equal Pay Day falls today marking the additional 59 days women have to work from the end of the last financial year to earn the same amount as men.
Fifty nine additional days, or nearly ten weeks, seems a lot of additional working hours for women to achieve equal pay. This year is a slight improvement on last year but still, a painfully slow journey to equality.
Using the latest Average Weekly Earnings data released by the Australian Bureau of Statistics, the Workplace Gender Equality Agency (WGEA) has calculated the national gender pay gap at 14 percent for full-time employees. This equates to a difference of $241.50 per week between men’s and women’s wages, a decrease of 0.6 percentage points over the last 12 months. It is a measure of women’s overall position in the paid workforce.
The problem is indisputable – women make up just over half of the Australian population yet, on average, they are paid $26,000 less per annum than men.
Addressing the gender pay gap is not only a personal or a workplace issue. It is more than doing ‘the right thing’. Fully addressing the gender pay gap could have massive economic benefits.
The economic modelling in KPMG Australia’s report, Ending workforce discrimination against women, suggests that if the gap between Australia’s male and female workforce participation rates could be halved, our annual GDP would be $60 billion greater in 20 years’ time. This could also result in a $140 billion lift in our cumulative measured living standards by 2038.
We can’t blame lack of education for the gap. University degrees pay dividends for workers with a ‘premium’ for male higher education graduates compared with students leaving after Year 12 across the decade remaining constant at about 20 percent despite the much greater numbers attending university, which might have been expected to reduce the value.
However the same cannot be said for women – on average they enjoy only a 15 percent premium. The pay gap is well entrenched in university graduates as well.
Inequality has a long tail – right through to retirement with a bi-partisan Senate Committee finding the disparity between men’s and women’s superannuation balances on average over life is 45.7 percent or $37,749. At certain age points this rises to a staggering 70.1 percent.
Our latest report, She’s Price(d)less produced for WGEA and the Diversity Council of Australia found gender discrimination continues to be the single largest factor contributing to the gender pay gap. And disturbingly, it’s on the increase. Breaking down these stereotypes of what is considered ‘womens’ work’ such as childcare, housework and caring for elderly relatives takes more than cosmetic changes but the results will be a fundamentally better workplace and a stronger economy.
So what should we do?
At KPMG we started looking carefully at our pay gap back in 2010 by conducting a pay gap analysis and reporting it to our National Executive Committee. It was the beginning of a concerted effort by our partners and management to reduce inequality in our workplace. We acknowledge we are not fully there yet but by embracing these guidelines we are confident the gap will continue to decline.
So give these recommendations from the WGEA a try just as we have.
- Conduct a pay gap analysis.
- Report the results of your pay gap analysis to your executive and board.
- Read our Guide to Gender Pay Equity
- Put in place an overall gender equality strategy or policy.
- Set some targets to diversify your workforce.
- Adopt a flexible working arrangements policy or strategy.
- Offer more support for carers, such as increasing paid parental leave, providing breastfeeding facilities or creating an internal support network for parents.
- Consult with your employees about what support they need from you as an employer.
These recommendations make good sense and although they may seem like an expensive and exhausting shopping list, enacting just one will make a tangible difference to closing the gender pay gap.