Decrease in gender pay gap partly due to more men in lower-paid work

The national gender pay gap has narrowed slightly to 13.4% for full-time employees, a decline of 0.6 percentage points over the past six months, the federal Workplace Gender Equality Agency announced on Thursday.

The figure has been calculated from the latest average weekly earnings data released by the Australian Bureau of Statistics. The gender pay gap equates to a $242.20-a-week difference on average between the amount women and men make.

The director of the Workplace Gender Equality Agency, Libby Lyons, said the decline may reflect labour market volatility caused by the effects of the Covid-19 pandemic.

“I understand that this result is, in part, due to an increase in the number of men in lower-paid full-time employment,” she said. “After all the economic shocks and uncertainties we lived through in 2020, it is very welcome news to have more people in full-time jobs. It is also a very positive sign that our economic recovery is under way.”

But Lyons emphasised that the data did not reflect any underlying structural changes to women’s overall position in the workforce.

“I expect to see more labour market volatility over the next 12 to 24 months as the nation settles into a new post Covid-19 employment environment,” she said. “As the nation’s recovery progresses, we may well see male wages increase with little or no positive improvement in the wages of women. If this happens, it is feasible that the gender pay gap will increase.

“It is also important to highlight that this figure does not consider the number of women and men who are under-employed, that is those who have left the workforce or have had their hours reduced.

She said there were signs the momentum towards gender equality in workplaces was stalling.

“The challenge we now face is to ensure that all employers take immediate action to remedy this and reverse the indicative trend.”

Lyons said that while she appreciated that 2020 was a very difficult year for many Australian businesses, “we cannot allow the effects of the Covid-19 pandemic to be an excuse for inaction and inertia”.

“Our economic recovery depends on women and men having genuine choice and equal access to re-engage and fully participate in the workforce,” she said.

“In fact, the business case is very clear. Improving gender equality outcomes in your business will improve your company’s performance, productivity and profitability. Achieving workplace gender equality is not just a commercial imperative. It is also one of the most effective ways to close our nation’s stubborn gender pay gap.”

Assoc Prof Rebecca Cassells from the independent Bankwest Curtin Economics Centre said the gender pay gap was still significant, and that companies must scrutinise their own gender pay gaps internally.

“We know from our work that companies which are measuring and analysing the pay gap and then taking actions to address that by recording and analysing any action taken, and taking that information to their executive or board, were more likely to see a decrease in the pay gap over time compared to very similar companies who do nothing at all,” she said.

“Really the key here is understanding what the gender pay gap needs within your organisation are and what the drivers might be. The more that the executive and the board are on top of this and interested in this as a metric, the faster change occurs.”

The national gender pay gap measures the difference between the average weekly full-time base salary earnings of women and men, expressed as a percentage of men’s earnings. On average, women working full-time earned $1,562 while men working full-time made $1,804, the latest data shows.

Changes in average earnings continued to reflect changes in the make up of the labour market stemming from the pandemic’s impact on jobs and earnings.

Head of labour statistics at the Australian Bureau of Statistics, Bjorn Jarvis, said the average weekly earnings for full-time adults in November 2020 was $1,712, down 0.1% from May 2020.

“The fall in average weekly earnings in November follows the large increase we saw in May (3.3%),” Jarvis said.

“May was when the labour market impacts were greatest, with a higher share of job losses in lower paid jobs and industries, and those which remained had a higher earnings profile.

“The fall in average earnings in November highlights the extent of recovery in low paid jobs, hours and earnings since May. While the recovery has varied by industry and other factors, there has been enough recovery at the lower end of the distribution to put downward pressure on the average.”

A report published in January which was co-authored by global gender equality organisation Women Deliver and quantitative and qualitative research agency Focus 2030 found 53% of 1,007 people surveyed in Australia, and 60% of female respondents, think the government “should do more” to promote gender equality.

Forty-two per cent of respondents in Australia said they wanted their government to “reform laws to promote equality between women and men and end discrimination against women”. Thirty-one per cent said the government should “conduct regular reviews of progress in the pursuit of gender equality”.