Essay on Gender Pay Gap

Essay on Gender Pay Gap


Introduction

Gender pay gap in Australia is calculated as the difference between average full time weekly salary of men and women represented as percentage of men’s salary. National gender pay gap in Australia is calculated basis on the average weekly full time data revealed through Australian bureau of statistics. National gender pay gap at present (May-2014) is at 18.2% currently but it has hovered from 15% to 18.2% from year 1990 to year 2014. There are range of factors such as the interrelated work, stereotype about work done by women & men, societal & family factors and way women & men engage in work activities etc (ABS, 2014). Further depending upon different industries and different jobs there is varying degree of gender pay gap existing in Australia. Present essay would investigate the factors that contribute towards the pay gap in Australia and the reason pay gap has higher significance in particular industries as compared to others.



Gender pay inequality in Australia

Looking into the gender pay inequality data it can be revealed that at present gender pay gap stands at 18.2% (May-2014) as per figure 1 below. Average full time weekly wage for men was $1559.10 as compared to the $1275.90 for women. Hence women are being paid $283.20 per week lesser as compared to the men for same work.

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Gender pay gap prevailing in Australia are quite complex and interrelated with each other and some of the key factors leading to pay gap in Australia includes below mentioned:

•Discrimination: Gender discrimination occurs in a country when a person is treated differently due to their gender. From indirect way, discrimination arises due to the education, family and job difference between a men and women. Choices adopted by men and women would influence the views regarding career adopted by particular gender e.g. women should be in caring responsibilities (ABS, 2013). Several times, employer may form perception regarding job type and career path which is suitable for women. This may create gender pay gap as there would be difference in job applied by women and job offered by employer to men & women. Study from NATSEM reveals that 60% of the pay gap in Australian context can be justified due to the direct discrimination or factors for being a woman. Another study in context to pay gap in Australian managers reveals that 70% of the wage pay gap can’t be explained due to the employment related factors such as the work experience, industry or family situation of the employees. Further this study indicates that these 70% of the factors are explained basis on the gender of a person i.e. being a female. Hence discrimination among the Australian workforce basis on gender is one of the vital factors explaining pay gap existing in the country (Carter and Harvey, 2011).
•Career breaks: Women are expected to handle all the care work involved in the society and their professional choice are towards the job or career which is more family friendly and allow sparing time for the family. Many a time women have been observed working part time and taking career breaks so as to fulfill their family requirement. These career breaks and part time work not only reduces the income for women but also lowers down the long term chances for the income through job (ABS, 2014). Recent study involving study for the wage gap has proved that wage gap would be higher for the women going for longer maternity leaves. In case a women return to job within first year of taking maternity leave then her salary would reduce by 5% and in case a woman is returning after time of 2 to 3 years then there can be reduction of more than 10% in the wage. Figure 2 provides the decline in women salary after returning from maternity leave.
Figure 2: Showing the decline in women salary after returning from maternity leave

•Occupational segregation: Occupational segregation can occur among women when they are over represented in a particular occupation while under representation is made in another occupation. Some of the occupations have higher percentage of women such as the administrative and clerical work (75%), sales worker (63%), professionals (52%) and personal & community service (68%) etc. There are mixed reactions from the studies regarding occupational segregation being important factor for enhancing wage gap among men and women (WACOSS, 2009). Some studies confirms that occupational segregation is important towards pay gap while other studies denies importance of occupational segregation being an important factor contributing towards wage gap in Australia.
•Industrial segregation: Women contribution towards the workforce in a country is increasing day by day but there are specific industries in which women are having higher presence as compared to men (Cassells et al, 2009). This phenomenon is known as the industrial segregation. Different industries have varying degree of wage level and increasing percentage of women in a particular industry would lead to disparity in the wage gap for women pertaining to Australia. Comparison can be done between two industries i.e. mining and retail wherein only 14.5% of the women are working in the mining industry and 57% of the employees working in the retail industry are women. Hence higher preference of women towards the retail industry would lead to the pay gap between men and women as the employees in mining industry are paid higher as compared to the retail industry (Chalmers and Hill, 2007).
•Pay setting methods: Setting of pay can also have high degree of impact over the pay gap between men and women according to the ABS data e.g. pay can be set through individual agreement, collective or awards etc. Looking the trend into the full time employees working through individual agreement method it can be said that wages would be higher for men and women as compared to the other methods of pay setting (Workplace Gender Equality Agency, 2013). It has been revealed that for pay set through individual agreement wages for men and women would be $1469.90 and $1173 respectively against the wages of $748.40 and $760.90 for men and women in the payment set by awards. Hence it can be observed that payment methods governed by government or federal department have higher parity for salary among the men and women. Pay gap is negative -1.7% when pays are set by the award method and women would get higher wages as compared to the men. Further by collective agreement method for pay setting wage gap between men and women would be 15.8%. Hence pay setting method attained through awards would be having highest degree of parity (-1.7% gap) for the salary as compared to the wage pay gap of 15.8% in collective agreement and 20.2% wage gap for the individual agreement method of pay setting (Workplace Research Centre, 2011).
•Under valuation of the women skills: It has been commonly observed that women oriented works such as social welfare and caring are undervalued in society. Social welfare work and caring work would require key skill set for women such as the ability to care for others and compassion which is not being rewarded by the society members and hence women are not appreciated for the work they do and skill set which they have. Under valuation made for the women’s skill set reflects the social expectation from men & women, history of development for the women work and industrial system pertaining to Australia. Range of legal cases from NSW and Queensland showcased that women’s work and skill set was undervalued due to range of factors in society. These factors would include the inappropriate classification of the jobs and undervaluation of the skill set required in order performing these jobs by women. A recent case filled pertaining to the social welfare and community services reflects how under valuation of the skill set required to perform these services may have adverse impact on the wage gap for women (Baron & Cobb-Clark, 2010). This case has revealed that since the community service and social welfare work is highly dominated by women employees in it due to which there is disparity in the wage provided to the men and women. Due to higher number of women present in the social welfare and community service work their wage paid are much lower as compared to the similar work performed by men in some other industry. Hence these skills are undervalued so that wage given to the women for performing these jobs would be lower.
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There is high level of significance for the gender pay gap existing between women and men working in Australia and improving this gap may have positive impact on the Australia’s economy. Looking into the impact of gender pay gap on the Australia’s economy it can be stated that reduction in the gender pay gap by 1% i.e. 18.2% to 17.2% can enhance the GDP of Australia by 0.5%. Further gender pay gap existing between men and women in Australia, costs more than $93 billion for Australia’s economy which is approx. 8.5% of the GDP for the country (Baker, 2011). In case the gender pay gap due to the several factors such as the discrimination and others would be removed from the Australian economy then there would be addition of the wages amounting to $56 billion in Australian economy thereby contributing to 5.1% of the total GDP for the Australia. Introduction of the flexible working arrangements in Australian economy may lead to reduction in wage gap between men and women thereby GDP can be increased by 9%. This would also reduce less paid time out of work for the women despite of the caring responsibilities for women.

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Gender pay gap is significant is some particular industries as compare to the other industries in Australian context. Pay gap analysis for the different industries in Australia can be given through table 1 which explains clearly that some industries are having higher pay gap as compared to the other industries.

Industry May-13 May-14
Social assistance and health care 32.2 30.6
Insurance and financial services 31.4 30.0
Real estate, hiring and rental services 23.5 28.9
Technical and professional services 30.0 25.2
Mining 22.5 23.7
Telecommunication and information communication 17.7 19.6
Construction 22.5 18.7
Support services and administrative services 10.4 17.8
Manufacturing 15.4 17.0
Warehousing and transport 16.1 16.1
Recreation and art services 16.3 14.8
Water and electricity services 13.1 12.2
Education 13.1 11.9
Retail 11.8 9.9
Other services 9.9 9.8
Food services and accommodation 7.8 8.0
Safety and public administration 6.6 7.2

Table 1: Showing the gender pay gap for different industries

Looking into the table above it can be said that healthcare, real estate, professional and insurance are among the top industries in which wage pay gap is highest and women are being paid less as compared to men for the similar work. It has been seen that in these industries top positions are occupied by male candidates e.g. in healthcare industry 86% of the CEO are male while only 14% of the CEO are female candidates (Watson, 2010). Further nearly three quarter of the employees in the caring roles are women and there is undervaluation for the caring role. Hence there is lower wage paid to the women working in the caring role. Surgeons in the healthcare industry are mainly men and they are also paid higher as compared to the women surgeon.

Further looking into the mining, construction, manufacturing and warehouse industries there are mainly men working in these industries while only a small portion of workforce of these organization are women. Taking example of mining industry it can be said that only 14.5% of the overall workforces for the industry are constituted by women and this lower down overall involvement of women in this industry hence gender pay gap exists in this industry due to industry segregation (Cobb-Clark & Tan, 2009). Retail and public administration like departments are having lesser degree of wage pay gap as involvement of women are much higher in these industries and other factors also support equality of pay in these industries for the women.

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There can be several steps adopted by government and other stakeholders in Australia so as to reduce the pay gap between men and women in Australian context. Understanding the issue deeply can help in knowing about the factors responsible for pay gap and learning which can be developed through WGEA website. Organizations need to perform the gender pay gap analysis on continuously basis so as to know the gap in wages which exists among men and women. Further WGEA site can help exploring gender pay gap based on the several factors such as the grade, employment status and occupation etc (KPMG & Diversity Council Australia, 2009). Once organization has established that pay gap exist in their organization then policies needs to be framed so as to improve upon the gender pay gap and effective execution of the policies would be done based on the successful implementation of these policies. In order to ensure effective implementation of the policies framed for equal pay for men and women it is important that this agenda should be included in the KPI of the CEO of the organization for private organizations while government should consider this as a priority item as it has potential to affect the economy in the country. Human resource policies and processes laid down in the organization should be reviewed on continuous basis so as to ensure that these policies do not hinder the progress of women employees working in the organization (Phillips et al, 2010). For example, human resource policies framed in the organizational context should ensure fair recruitment and promotion policies for the organization. Further human resource department in the organization should facilitate the part time work at senior level in the organization so that women can also take part at the senior level positions by working part time. Finally, human resource department needs to make the continuous job evaluation so as to ensure that gender bias from the work has been removed.



Conclusion

Current essay has explored the factors which are responsible for the wage pay gap in Australian industries and some of these factors include industry segregation, occupational segregation, pay setting methods, under valuation of the women skill set, gender discrimination and career breaks etc. All these factors are responsible to contribute the wage pay gap existing in the different industries in Australia. Some of the industries are having higher wage pay gap such as the healthcare, insurance, mining and financial services while other industries such as the retail and public administration are having lesser wage pay gap.

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