By Jane Gilmore

Explainer: What is the Gender Pay Gap, and where does it come from?

By Jane Gilmore

This blog is part of our Expert Commentary series, bringing you insights into some of the unspoken challenges women face in the workplace, from experts with lived experience. The series explores a range of topics and perspectives to highlight the ways inclusive and compassionate leadership practices can benefit everyone.

The gender pay gap is one of those things that is both simple and complex at the same time. The official national gender pay gap figure, which is calculated by the Workplace Gender Equality Agency (WGEA), is currently 14.2 per cent.

WGEA takes data from the Australian Bureau of Statistics and works out the difference between what men and women earn for full time work (excluding overtime and bonuses) and express it as a percentage of men’s earning.

So, very simply, this is how WGEA calculated the Gender Pay Gap on the latest data from August 2021.

Average Weekly Full Time Ordinary Earnings:

Men: $1837

Women: $1575.50

Difference: $261.50

Divided by men’s earnings: $261.50 / $1837 = 0.1423

Gender Pay Gap = 14.2%

The method is reasonable if we’re trying to understand whether there is a difference in what men and women earn for the same hours of work. But if we’re trying to understand the difference in gender based economic security, we need to look at the bigger picture.

Many women, especially women with children, do not work full time over their entire lives. Additionally, overtime and bonuses are not shared equally between men and women.

Data from the Australian Bureau of Statistics shows that of parents with children under six years old, 94 per cent of men and 65 per cent of women are in the workforce. Of those parents who do work, 60 per cent of mothers work part time, compared to 8 per cent of fathers. And 48 per cent of mothers with children between the ages of 6 and 14 are still working part time.

Taking time away from work, or reducing working hours, means women have fewer chances to increase skills and experience, which affects career progression and promotion opportunities. It also means women are making lower superannuation contributions during their child raising years.

Additionally, female dominated industries, such as childcare and administrative work, are among the lowest paid in the country. Male dominated workforces tend to be much better paid. The intricacies of this are complicated, but it mostly boils down to what is perceived as “women’s work” is undervalued and underpaid, while still requiring high levels of skill and dedication.

The accumulated lifetime effects of women’s underpaid and unpaid work are proven in the drastically disproportionate superannuation balances at retirement age.

According to not-for-profit organisation Women in Super, Australian women retire with 47 percent less superannuation than men. Around 40 percent of older single retired women live in poverty.

If you’re a woman reading this and you find it scary, you’re right to feel that way. 

The Covid-19 pandemic put pressure on all the forces that impact women’s working lives. Women lost more jobs at the beginning of the pandemic and were more likely to return to casual jobs when they did get work again, which makes them more vulnerable to job and income losses in future lockdowns.

Women in all age groups were also more likely than men to withdraw their entire balance under the emergency superannuation access scheme in 2020, and women overall withdrew a greater proportion of their superannuation than men. Women over 50 were already the fastest growing group of homeless people in Australia and this will only get worse as housing affordability worsens and older women have less superannuation to pay living expenses when they stop working.

Fixing the gender pay gap is a monumental task, but it’s not impossible. We need government to make policy that encourages parents to share the paid and unpaid work of raising children equally. We need businesses to actively engage in looking at their own gender pay gap, which means doing an internal audit of how much they pay everyone in their organisation and whether there is a significant gender difference in their senior management. WGEA provides a number of tools businesses can use to evaluate their gender pay equity and start to address it.

We can’t change something we don’t measure, so often the simplest way to start is to measure what’s happening in our own organisations. 

At the very least, it gives us a place to start and demonstrates a willingness to act. That is no small thing.

Jane Gilmore was the founding editor of The King’s Tribune. She has a Master of Journalism from The University of Melbourne and is now a freelance journalist and author, with a particular interest in feminism, media and data journalism. Jane is the creator of the FixedIt campaign, which highlights victim blaming and erasure of male violence from news headlines. Her book FixedIt: Violence and the Representation of Women in the Media was published by Penguin Random House in August 2019.