Inside Story

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1017 words

National Affairs

Australia’s tenacious pay gap

2 December 2010

Forty-one years after the declaration of the principle of equal pay, we’re still not there, writes Norman Abjorensen

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Photo: Andrew Jeffrey

Photo: Andrew Jeffrey



WOMEN have had the vote in Australia for more than a century, and discrimination on the grounds of sex or marital status has long been illegal in defined areas such as employment, education and the provision of goods and services. And yet, despite all these apparent gains in the pursuit of equality, women continue to earn less on average than men.

For all sorts of reasons, employers have managed to devalue the work of women and resist demands for equality that have been accepted in many spheres other than the workplace; the current film Made in Dagenham, depicting the struggle by women workers at a London Ford factory in the 1960s, has a surprisingly contemporary ring to it. While historically women may once have been part of an unskilled underclass in the labour market, this is no longer the case as women are now more likely than men to have a tertiary qualification. But women graduates will earn $2000 less than male graduates in their first year of work and $7500 less by the fifth year after graduation.

After the adoption of the principle of equal pay in 1969, when Australia’s first federal equal pay case gave women the right to equal pay for equal work, women in the workforce began to see a significant improvement in remuneration, and the gender pay gap in Australia was smaller than that in countries without a centralised wage-fixing system. However, the shift away from centralised wage-fixing over the past two decades has had a disproportionate impact on women, who have traditionally had less industrial bargaining power than men. Remuneration is increasingly tied to productivity rather than regarded as an independent variable – a significant disadvantage for women, who have been more usually employed in human-services occupations in which “productivity” is harder to establish.

There are pay gaps across all employment sectors in Australia, whether in male-dominated or female- dominated industries. The deregulation of casual employment and employees’ effective loss of control over the hours they work have had a particularly adverse effect on women, as they constitute the majority of casual workers. Under the former Howard government’s WorkChoices laws, the pay gap widened for the first time in twenty-five years, as thousands of women lost penalty rates and other important job conditions and minimum wages were cut in real terms.

According to a survey by the Fair Pay Commission in 2008, the pay gap was greater for managerial than non-managerial employees and for those employed under agreements rather than awards. Women on awards received over 96 per cent of the pay received by males.

The gender pay gap also exhibits marked regional variation. For example, by 2008 the pay gap had widened dramatically in Western Australia, standing at 28 per cent with the largest discrepancy (38 per cent) in property and business services. This comparison, though, is only for average earnings for men and women working full-time: the gender gap increases if the comparison is extended to part-time work, in which case women’s earnings are reduced to two-thirds those of men.

It is a sobering statistic that in 2010 women in full-time paid work in Australia still earn on average 17.6 per cent less than men, which equates on average earnings to $1 million less over a working life. And all indications point to the gap’s widening, having risen from 16 per cent in 2008.

On international comparisons, Australia is about average when it comes to equal pay. A report commissioned by the International Trade Union Confederation in 2008 showed that, of sixty-three countries surveyed, there was an average gender pay gap of 15.6 per cent. In terms of comparable countries, Australia fared better than Canada, for example, which had a gender pay gap of almost 28 per cent, while in the United Kingdom it is 20 per cent. New Zealand, however, is better than Australia, at 13 per cent.

The labour force participation rate of women in Australia has increased significantly over the last thirty years. Between 1978 and 2009, the labour force participation rate of women increased from 43.5 per cent to 58.7 per cent. However, women continue to spend less time in the paid workforce than men. For example, women are much less likely to work full-time than men are (54.9 per cent compared to 84.1 per cent), and comprise over 70 per cent of the part-time workforce. Participation rates for women by age show a notable decline between the ages of 25 and 44, which is not evident for men. Again on international comparison, Australia has a lower participation rate for mothers with young children than the OECD countries of Canada, Sweden, the United Kingdom and the United States.

According to a review of the Equal Opportunity for Women in the Workplace Act 1999, carried out in 2009 for the Department of Families, Housing, Community Services and Indigenous Affairs, a range of key indicators suggest that having children has a significant impact on Australian women’s workforce participation, as well as their experiences while in paid work and their capacity to save for a financially secure retirement. For instance, sole mothers are less likely to be in paid work than are partnered mothers. Sole mothers may also face additional barriers to workforce participation and job opportunities, given the greater responsibilities and reduced flexibility often associated with parenting alone. Indigenous women, women with disabilities, regional and rural women, and women from culturally and linguistically diverse backgrounds may also face distinct obstacles and challenges in the labour market and in the workplace.

The report concludes that, despite gains in participation rates over time, women’s earnings remain persistently lower than men’s, and observes that the Australian paid workforce is “highly gender segregated,” and that female-dominated industries have historically been undervalued.

Against this background, earlier this year the Australian Services Union and four other unions lodged an application with Fair Work Australia seeking an Equal Remuneration Order for workers in the social and community services sector. The federal government supported the application and, in a submission last month, stated its intention to remove “the historical barriers to pay equity claims.”

But, forty-one years on from the declaration of principle, it might not be a good idea to celebrate the advent of equality just yet. •

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Negative sum game: Argentinian president Cristina Fernández de Kirchner speaks during a UN Security Council summit in New York on 24 September. Saul Loeb/AFP Photo

Negative sum game: Argentinian president Cristina Fernández de Kirchner speaks during a UN Security Council summit in New York on 24 September. Saul Loeb/AFP Photo