The gender pay gap measures the difference between the average earnings of women and men in the workforce. The gender pay gap is an internationally established measure of women’s position in the economy in comparison to men.
What does the 'gender pay gap' mean?
What it is:
The gender pay gap measures the difference between the average earnings of women and men in the workforce. The gender pay gap is an internationally established measure of women’s position in the economy in comparison to men. The gender pay gap is the result of the social and economic factors that combine to reduce women’s earning capacity over their lifetime.
Closing the gender pay gap goes beyond just ensuring equal pay. It requires cultural change to remove the barriers to the full and equal participation of women in the workforce
What it is not:
It is not the difference between two people being paid differently for work of the same or comparable value, which is unlawful. This is called unequal pay. Equal Pay is when men and women receive equal pay for work of equal or comparable value. In practical terms, this means that:
- men and women performing the same work are paid the same amount
- men and women performing different work of equal or comparable value are paid the same amount.
Workplace Gender Equality Agency (WGEA) and Australian Bureau of Statistics (ABS) data both show a gender pay gap favouring full-time working men over full-time working women in Australia.
The gender pay gap often starts when women first enter the workforce. A combination of factors affect women's lifetime economic security and makes it likely that over a lifetime women will earn less than men, be less likely to advance their careers as far as men, and accumulate less superannuation and savings than men, and will therefore be more likely to live in poverty in old age.
You can access an overview of the WGEA's workplace gender equality data, including gender pay gaps, in the latest scorecard.
What drives the gender pay gap?
The gap between women’s and men’s earnings is a symptom of a broader cultural problem in workplaces. It reflects the historic and systemic undervaluing of women’s workplace contributions and the significant barriers that lead to the under-representation of women in senior executive and management roles.
The gender pay gap is influenced by a number of factors, including:
- conscious and unconscious discrimination and bias in hiring and pay decisions
- women and men working in different industries and different jobs, with female-dominated industries and jobs attracting lower wages
- lack of workplace flexibility to accommodate caring and other responsibilities, especially in senior roles
- high rates of part-time work for women
- women’s greater time out of the workforce for caring responsibilities impacting career progression and opportunities.
- women’s disproportionate share of unpaid caring and domestic work
Learn more about each of the drivers:
The undervaluation of 'female' jobs
In Australia women and men tend to be segregated into different occupations and industries but female-dominated occupations attract lower pay than male-dominated occupations. This reflects the lower social and financial value given to traditionally ‘female’ jobs.
Caring occupations and industries in the healthcare and social services industries attract lower pay than occupations in the construction industry. Male dominated industries also offer significantly higher levels of discretionary payments, such as over-award payments, bonuses, commissions, shift allowances and profit sharing payments compared to female dominated industries where there is little or no access to these kinds of payments.
Barriers to higher-paid male-dominated industries
Women also face barriers accessing jobs in better-paid ‘male’ industries such as mining or construction. Factors that discourage female participation include gender stereotyping of career choices at school and higher education, social expectations about the work women and men ‘should’ do, the lack of awareness about the opportunities and the career paths for women available within male-dominated industries.
Long hours, a lack of workplace flexibility, and often, a lack of facilities for women, and the perception that male-dominated industries have a ‘blokey’ and non-inclusive culture are also disincentives.
Conscious and unconscious bias and discrimination in hiring and pay decisions
Both conscious and unconscious bias and discrimination can disadvantage women and contribute to the gender pay gap. These can include ingrained cultural biases such as assumptions about what sort of work women or men are capable of performing, for example, the tendency of employers to judge men as more competent than women or an employer not hiring a woman because of a perception that she will not fit into a ‘traditionally male’ workplace.
Bias and discrimination disadvantage women in hiring, promotion and performance evaluations and can result in lower starting salaries for and negative salary negotiation outcomes for women.
Women’s disproportionate share of unpaid caring and domestic work
The gender pay gap is exacerbated by the lack of flexible, family-friendly policies that allow women and men to balance caring responsibilities with working hours. In Australia women spend 64.4% of their average weekly working time on unpaid care work compared to 36.1% for men. For every hour Australian men commit to unpaid care and domestic work, Australian women commit one hour and 48 minutes.
Unequal unpaid care work is a barrier to reaching gender equality in the paid workforce because it reinforces gender stereotypes of the female ‘homemaker’ and male ‘breadwinner’. There is a new generation of men who are keen to work flexibly, but research by Bain and Company shows that men are twice as likely as women to have their requests to work flexibly rejected and can face career-limiting judgements in the workplace about their work ethic.
More gender balanced sharing of unpaid care work can help reduce gender stereotypes and increase female workforce participation. Research by Bain & Company shows that flexible work arrangements can be used to boost productivity, increase employee retention, provide the conditions for increased representation of women in senior leadership positions, and enable men and women to participate more equally as caregivers as well as secure a better work-life balance.
It is true that many women willingly choose to work part-time to balance paid work and caring commitments, however, the ‘choice’ for the woman to work part time is often skewed by the fact that men tend to earn more than women, and have less access to flexible work arrangements and paid parental leave, so it falls to women to reduce their paid hours – their option is to choose less.
Part-time work can also reduce access to career opportunities, professional development and promotions that are offered to full-time employees.
Economists have reported that raising children accounts for a 17% loss in lifetime wages for women. Once children are born, men’s paid workloads and incomes usually remain stable, while women may work part time and experience a decline in salary and superannuation.
The cumulative loss of earnings women experience usually becomes irreversible across a woman’s lifetime, regardless of subsequent paid employment
You can read more about unpaid care work and the labour market here.
You can’t be what you can’t see - a lack of female role models and mentors
Women remain underrepresented at every stage of the career pipeline in Australia – only 17.1% of CEOs are women, 25.8% of board members and 30% of key management positions. The belief that senior level roles cannot be adapted to flexible work arrangements also results in the under-representation of women with caring commitments in higher-paid senior roles.
A lack of role models and mentors can also restrict women’s professional development and career advancement. When women – and men – see females in senior roles it normalises the idea of female leadership.
What is the current gender pay gap?
Calculated from WGEA data, this means men working in the private sector earn $25,800 on average a year more than women.
Read more about how this figure is calculated and what it means.
Calculated from ABS data, this means there is a full-time average weekly earnings difference between women and men of $255.30.
Read more about how this figure is calculated and what it means.
Each year the Workplace Gender Equality Agency (‘WGEA’) publishes the annual key findings from the reporting data in the WGEA Gender Equality Scorecard.
Last week, in the lead up to Equal Pay Day, the Workplace Gender Equality Agency, (‘the Agency’) in partnership with KPMG Australia and the Diversity Council of Australia, launched the newest instalment of She’s Price(d)less: the economics of the gender pay gap.
Last month, the Workplace Gender Equality Agency (‘the Agency’) published a quiz testing the public’s knowledge on the gender pay gap. Since its release, the Agency has received over 500 responses. The average score was 71% - 9.2 out of 13. Around one in five respondents scored within 90%-100%.