Pay Equity and the Gender Pay Gap
What is pay equity and the gender pay gap?
Pay equity means that women and men workers receive equal or the same pay when they undertake work that is of equal or comparable value. This has been a feature of Australia’s wages system since 1972.
Yet, in 2021 the gender pay gap between women and men workers was measured at 14.2 per cent across Australia. This refers to the gap or difference between the average full time weekly earnings of men and women workers and means in 2021 that Australian women workers earn an average of $261.50 per week less than men.
There are several contributing factors to the gender pay gap including:
- the segregation of women’s and men’s work in different industries and occupations and the historic undervaluation of female dominated occupations
- women’s greater proportion of part time work
- women’s greater time out of the workforce for caring responsibilities impacting on career progression and opportunities
- unconscious and conscious bias in hiring and pay decisions
- insecure employment for many women in industry sectors
The biggest gender pay gap occurs in the Professional, Scientific and Technical Services industry sector at 25.3 per cent, followed by Financial and Insurance Services at 24.1 per cent, and Health Care and Social Assistance at 20.7 per cent. These gaps are alarming given the large numbers of women employed in these industries.
Research by the Australian Government in 2017 continues to indicate that a major component of pay inequity is because of the concentrations of women in specific occupations and industries such as childcare, healthcare and assistance, and education.
Significantly, the gender pay gap is also higher when pay is set by individual arrangements (18.4 per cent), compared to when pay is set by an award or collective agreement (13.9 per cent). The gap is also higher in the private sector (17.5 per cent) compared to the public sector (10.8 per cent).
As a result, in 2021 many women workers continue to receive less pay when compared to many workers in male dominated workplaces and industries.
What is the history of pay equity in Australia?
In 1907, the Commonwealth Conciliation and Arbitration Court awarded a federal minimum wage based on what an average male unskilled worker needed for food, shelter, and clothing for him and his family. At the same time, women workers were awarded 53 per cent of the male minimum wage. Men were assumed to have the primary responsibility for their notional wife and three children.
During World War II, unions and womens’ unions were successful in securing women workers 75 per cent of the male wage when performing the same job, and 90 per cent of the male basic wage in the munitions, metal, and aircraft industries.
In determining the 90 per cent rate, the Women’s Employment Board established a 10 per cent differential to men’s pay rates on the basis of women’s alleged lower productivity because of women’s ‘lesser physical strength, period disability, and higher absenteeism rates’.
After the war, many women were displaced from their jobs by returning servicemen and it took another twenty odd years for societal changes to see women resume working again in large numbers. With unions leading the charge in 1969, women won the right to be paid the same as a man if they performed exactly the same job – equal pay. However, because of the strong segregation of work into male and female dominated jobs, fewer than one in five working women benefited.
In 1972, unions won a further improvement to expand the newly established wage principle of equal pay to equal remuneration, to enable women and men undertaking similar work with a similar value to be eligible for the same rate – equal remuneration. In theory, this meant that if the value of work undertaken in a recognised ‘female industry’ was acknowledged as similar in value to work in a ‘male’ industry, then women could earn the same amount. But with the continuing gender segregation of many jobs, and the nature of that work often being vastly different, problems persisted with how to measure work of equal value.
In the 1990s and early 2000’s, there were renewed efforts by unions and some governments to address pay equity. As a result, changes were made to workplace laws for tribunals to make equal remuneration orders based on comparing the skills and job responsibilities of female and male dominated occupations.
In Queensland in 2006, a major decision saw childcare workers awarded significant increases in recognition of the undervaluation of their work. Wage adjustments were specifically awarded in recognition of their multitasking, communication, and domestic and caring skills.
However, the requirement for a specific male job comparator in the federal jurisdiction has made the process more difficult in recent years, with the Fair Work Commission rejecting several applications based on the lack of a suitable male comparator job.
In 2018, the Fair Work Commission rejected an application by the United Workers Union to improve childcare workers wages compared to metal industry classifications with the union saying the system is not fit for purpose to achieve pay equity in the 21st century.
In 2020, the Fair Work Commission also rejected an application made by the Independent Education Union on behalf of university qualified childcare educators on the basis that the use of the male comparator of an engineer was too generic and wide, instead granting lesser wage increases based on work value rather than equal remuneration.
What can we do about it?
There are a number of things that unions can do to improve pay equity outcomes in their workplaces, occupations and industries, including at a workplace level. For instance, they can:
- ask for and review workplace data and gender statistics for jobs and pay within an organisation to identify pay equity issues or gaps
- set up joint consultative committees to review and analyse any pay gaps or key gender differences
- review job descriptions and associated pay rates to ensure they take account of and value soft skills such as interpersonal and communication skills, as well as caring skills
- compare and review pay rates for female and male dominated positions based on work of comparable value
- ensure unconscious bias training is implemented for recruitment and selection committees
- ensure all jobs are able to accommodate part time work options
- review insecure types of work and allow for conversion to more permanent work
- introduce jobs skills and training opportunities for employees in lower level paying jobs
Workplace laws also need amending to make it easier to establish equal remuneration cases without the necessary requirement for a male comparator job, and for all bargaining parties to determine how pay equity has been or will be implemented in an agreement prior to it being approved.