The gender pay gap

The gender pay gap measures the difference between the average earnings of women and men in the workforce. 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 equal pay.

The gender pay gap is an internationally established measure of women’s position in economy in comparison to men. It is the result of the social and economic factors that combine to reduce women’s earning capacity over their lifetime.

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

The gender pay gap can start 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.

Image depicts a woman standing on a smaller stack of coins than a man.

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.

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, including the genuine equal choice to access the same career or work opportunities as men in all occupations, industries and levels of seniority.

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 every industry and occupational category in Australia.

 

If you are looking for resources on how to address gender pay equity within your organisation visit:   Addressing pay equity

 

WGEA data

The WGEA collects pay data annually from non-public sector organisations with 100 or more employees, covering about 4 million employees in Australia, including superannuation, bonuses and other additional payments.

The full-time total remuneration* gender pay gap based on the 2017-18 WGEA data is 21.3%, meaning men working full-time earn $25,717 on average a year more than women working full-time. The full-time base salary gender pay gap for 2017-18 is 16.2%, which means that men working full-time earned $15,457 on average more than women.

Gender pay gaps are calculated across the WGEA dataset by industry, and by management and non-management occupational categories.

ABS and WGEA data both show a gender pay gap favouring full-time working men over full-time working women in every industry and occupational category in Australia.

Image depicts the proportion of the Australian workforce covered by the WGEA dataset.

The current WGEA gender pay gap data, drawn from the Agency’s 2017-18 reporting data, shows a total remuneration gender pay gap of 21.3%, meaning men working full-time earn on average nearly $25,717 a year more than women working full-time.

Image depicts the WGEA total remuneration gender pay gap which is 21.3%

 

 

 

* Total remuneration includes full-time base salary plus any additional benefits – bonus payments, performance pay, superannuation, discretionary pay, overtime, other allowances and benefits, for example share allocations.

The National gender pay gap

The national gender pay gap is calculated by the Workplace Gender Equality Agency (WGEA) using data from the Australian Bureau of Statistics (ABS).

Currently, the national gender pay gap remains stable at 14.0%a drop of just 0.1pp over the last six months. It had previously hovered between 15% and 19% for the past two decades.

The national gender pay gap is the difference between women’s and men’s average weekly full-time base salary earnings, expressed as a percentage of men’s earnings. It is a measure of women’s overall position in the paid workforce and does not compare like roles.

Equal 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.

Equal pay is not just about equal wages. Equal pay takes into account discretionary pay, allowances, performance payments, merit payments, bonus payments and superannuation.

Organisations that are committed to equal pay will ensure that:

  • the wages and conditions of jobs are assessed in a non-discriminatory way. This is done by valuing skills, responsibilities and working conditions in each job or job type (even where the work itself is different) and then remunerating employees accordingly
  • the workplace's organisational structures and processes do not impede female employees' access to work-based training, promotions or flexible working arrangements.

 

International gender pay gaps 

Gender pay gaps are an internationally established measure of women’s position in the economy. Directly comparing international gender pay gaps is problematic due to differences in sources, definitions and methods used to calculate the gender pay gap in different countries. However, it is clear that gender pay gaps in favour of men are a common feature of economies world-wide.

The business case for gender equality

The gender pay gap is not just a problem for women – it affects everyone in society. 

There is a strong correlation between a country’s progress in closing the gender gap and its economic competitiveness, national productivity, innovation, economic growth,and ability of companies to attract and retain talent.

Research has also shown that gender diversity at a leadership level could boost workplace performance while simultaneously acting to correct gendered pay inequities.

Women’s full access and participation in the workplace is also crucial to future-proof the Australian economy as technology changes workplaces and jobs evolve – requiring a diverse, highly skilled, trained and resilient workforce.

Read the full business case for gender equality here. 

 

Click on the drivers of the gender pay gap below to find out more:

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.

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.

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. 

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[3]. 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.

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.