Australia’s Gender Pay Hole Revealed – Podcast

The release of gender pay gap databy the Workplace Gender Equality Agency has many employers scramblingto explain why men are paid more than women at their organizations. Let's face it, who hasn't loggedon to look up their favourite brands to see how they fared? This data has highlighted the bigdiscrepancies in women's salaries, the absence of women in traditionallymale dominated industries, and the lack of women in seniormanagement of many major businesses. But while the release of this data hassparked a national discussion on why women.

Are often paid less, there's more nuanceto this story than what first appears. I'm Kat Clay, and I'm excited to have oneof Grattan's most passionate advocates for equity on the podcast today. And that's Natasha Bradshaw. Welcome, Natasha. Hi Kat. So you've been, a lot of media this week. One of the things I'd want totalk to you about is just doing a little quick primer for anyonewho's not across the gender pay gap.

I know we've talked about it on thepodcast before, but can you just take us through quickly what it isand how it's measured in this data? A common misconception is that thegender pay gap is about women being paid less for the exact same job as men. It's not about this. In fact, equal pay for equal work orwork of equal value has been legislated in Australia for more than 50 years. But when it comes to thegender pay gap, there are a few different ways to measure it.

And what it's really about is howwe value women's contributions in the workplace relative to men's. Most commonly, you'll seetwo measures reported. One of those is the National GenderPay Gap, using data from the ABS. And this shows a gender pay gap ofabout 12 percent in favor of men. What this includes is just full timeworkers, and just their base pay. The other measure you'll commonlysee reported is the Workplace Gender Equality Agency's employer census data. They collect information from employerswho have more than 100 employees.

And the gender pay gap theyreport, on average is 21. 7%. So much bigger than the 12percent stat from the ABS. And that's partly because this gapincludes not just full time employees, but all employees, if you aggregated uptheir salaries to a full time equivalent. And it also includes not only basesalary, but overtime bonuses and other additional payments, which we knowtypically, men receive more of than women. So that tends to increasethe gender pay gap as well. What the Workplace Gender EqualityAgency has just released is the.

Median Gender Pay Gap overall andat the individual employer level. The Median Gender Pay Gap is essentiallyif you went to an organization and you lined up all the men in orderof how much they get paid and all the women in order of how much theyget paid and you took the middle person in each line and you took thepercentage difference between their pay. So that's what this data is telling us. They've published two measures. One is the median for base salaries. And the second is themedian for total salaries.

So including bonusesand overtime payments. So the median base gender pay gap inorganizations is fourteen point five percent and the total is 19 percent. And I think this data is clearlyimportant as you've said that, are more likely to receive bonuses, but alsowomen are more likely to work part time. So do you think that this is givinga more holistic picture here? That's right. There are lots of different ways. You can measure the gender pay gapand also other measures of women's.

Labor force outcomes that shouldalso be considered in context. But I do think including parttime employees is important, especially given, so many womenin Australia do work part time. One of the things I did want to gointo as well is the reasoning behind releasing this data because the WGEAhave been collecting this data for a decade now, but this is the first timethat it has been made publicly available. Usually they just release a publicstatement on kind of the data itself. Why has it been made public this year? The power of WGEA to releasedata and what data it's able.

To release is defined by law. Previously, it collected very detaileddata, and it was able to privately inform employers of their genderpay gaps, but it was only allowed to publicly release very aggregated data. So at the economy wide level, and splitby broad industries and occupations. What's changed is that last year,legislation was passed that now allows WGEA to publish the genderpay gaps at the employer level. In terms of why this change happened,Kat, if you'll indulge me for a minute, I might just talk a little bit aboutthe history of the gender pay gap in.

Australia to, to give some context. So, Australia, like many othercountries, has a long history of undervaluing women's work. From the early 1900s, the basic wagefor unskilled men was determined not by the market, but rather employershad to pay a basic wage that was sufficient to support a wife andthree children in frugal comfort. And up until World War II, thefemale basic wage was set at about 54 percent of men's wages. Because women, were assumed notto need to support a family.

And until 1969, employers wereallowed to pay women less than men for doing the exact same work. What is the reason forthat change in 1969? In 1969, there was a legal decision,which was the equal pay for equal work. And then in 1972, we had anotherlegislative change, which was equal pay for work of equal value. So I think that context is importantthat actually in historically the gender pay gap was something that wasenforced by government legislation. Now, since the equal paydecisions, in the early 1970s,.

We've seen enormous improvementsin women's labor market outcomes. Women are now gettingeducated at incredible rates. Workforce participation has grown rapidly. Women are working and earningmore than ever before, but we have seen this stubbornpersistence in the gender pay gap. So while it's come down over time,it's still persisting and it's not. It's really stalled in, in recent years. Now, the Albanese government has madeclear that gender equity is a priority. And as we've discussed on thepodcast before, they've already.

Made changes to paid parental leaveand the childcare subsidy that are intended to help women to balance. their caring roles and participationin the labor force, but when it comes to the gender pay gap, many leversare not in the government's control. What we need is a full societal effortto bring down the gender pay gap. And a lot of those levers, sitwith businesses, as the ultimate hirers and people who pay workers. Essentially what the government's donehere is allow WGEA to publish this information at the employer level, whichessentially means employers can be named.

And shamed for having big gender pay gaps. And this creates, a big incentive foremployers to do something about it. not only, can they experience reputationaldamage if, they have huge gender pay gaps relative to their competitors,but it can also prevent women from wanting to work in their companies. And at a time with labor force shortagesand companies competing for the best talent, you know, if you can't hire reallytalented women, that's a huge problem. So, Tash, let's dig into this data. What did it reveal?.

Well, unsurprisingly, Kat, the datadoes reveal that many Australian companies are paying women muchless than they're paying men. About 60 percent of companiespay the typical woman at least 5 percent less than the typical man. And around a quarter pay womenmore than 20 percent less than men. There are also companies withgender pay gaps up above 50%. so a lot of work still to bedone across many organizations. You can also see from the data howmuch bonuses and overtime matter. So overall, the pay gap is largeronce you include bonuses and.

Overtime, but for some companies,it really makes a huge difference. so one example is a company calledOptiver, which is a large private company in the finance sector. Now they have a median gender paygap of zero when you look at their base pay, but one of more than 50%,when you include other aspects of pay, like bonuses and overtime. That's huge. That's so big. Yeah, exactly.

So it shows just how much ofa difference this can make. And this is very common in male dominatedindustries like transport, mining, construction, and financial services. None of us were particularly surprised tosee that kind of pay gap in those, those industries, the male dominated industries. Were there any other major outliershere where you felt like, was unexpected or you didn't expect to see that? I don't think there's much that'sparticularly unexpected, but what we can see here for the first time is youcan look at companies in very similar.

Industries of similar sizes and see wheresome have made great progress towards gender equity and have very small genderpay gaps and others have very large ones. So often, companies will blame industryand occupational segregation or economy wide differences for their gender pay gap. But in these cases, it seems likethere's more companies could do. So one example I thought wasinteresting was to look at AFL clubs. And what I found when I looked intothe AFL clubs is that there's a huge difference in gender pay gaps. So my team, the Sydney Swanshave the smallest of any club.

They actually have a pay gap in favorof women, but the pay gaps range all the way up to the biggest, which isCollingwood football club at 42%. As you can see, just within, differentfootball clubs, you have these very different, gender pay gaps. Yes, and you'll be very pleasedobviously as a Sydney Swans supporter and also as a Sydney Swans householdto see that that's the lowest gap. But obviously the Collingwood fans atGrattan will not be pleased I imagine. Absolutely. Yeah, I did look at the AFL clubsbecause I think that's actually quite.

A nice little set of comparison data. I find that really interesting thatyou could dig into any kind of niche of businesses with over a hundred employees. So you could even look at datafrom, you know, say large churches or clubs or, you know, AFL club. All sorts of businesses are on there. One thing that I was interestedin too is that there was some businesses that didn't report. What happens to them?.

Often the Workplace Gender Equality Agencydoes have businesses who don't report in a given year or even consistently. There's limits on what they can do aboutthis, but typically what they'll do is they have the power to publish thenames of companies who don't cooperate. Often this is kind ofa last step for them. So they'll make quite a big effort to helpcompanies to report, to follow up with them if they don't, to help them gatherthe information they need to report. And if they fail to do all of thosethings, then they will be listed on the website as non compliant.

Those companies might also be excluded,for example, from government contracts or different government grants andfinancial assistance payments as a result of their non compliance withthe act because they are required under the act to provide this information. One of the things I want to get intobecause we've talked a bit about this in the office and, and you recentlywrote, piece for the Conversation, which goes into depth on this is that, youknow, the the high level, the easy take on this information is that, Oh, we'regoing to name and shame businesses. And, you know, that that's, you know,the first thing you kind of see when.

You see this data, but, there'sactually more nuance to this than at the first glance, isn't there? Naming and shaming is a pretty bigpart of what will make this policy effective because it's partlywhat provides the encouragement for employers to make change. But we should be a little bit carefulabout how we interpret the data. It's very possible that an employercan be making quite a big effort towards improving its gender paygap and making its organization, a great place for women to work, buttheir pay gap still remains large.

There can also be cases where in theshort term actions that an organization takes to try and improve its pay gap,will actually worsen it in the short term. a good example of that is if you try andrecruit a lot of women at junior roles, that actually can worsen your pay gapin the short term because you're then employing more women in lower paid roles. But over time, if the company follows thatup by ensuring those women, get all the opportunities to progress in the company,then their pay gap will narrow over time and they'll have more women employed. We should just look at these thingsin context and think about, especially.

Where companies have provided astatement about the actions that they're taking to narrow their gender pay gap. We should really look at those actionsand look over time at whether they actually follow through with thoseand whether their figures improve. Well it'll be interesting to see year onyear because this data will be released publicly every year from now on, won't it? That's right. We'll be able to follow up and make surecompanies are following through with what they've said and that their figuresare improving over the longer term.

What else is there to this, the surface? The other thing we should remember isthat, Some employers might have a very small gender pay gap just because theypay all their workers really badly. So, you can see this often,in industries that have quite compressed wage distributions,because most of the employees are on award wages, or the minimum wage. So if you hop onto the WGEA websiteto have a look at the data and you can look up if your company employs morethan a hundred people, you can have a look at your own information or atinformation about a company that you're.

Interested in working at and see howthey stack up and what's great on there is there's a lot of context provided. So as well as the gender pay gap, you cansee the distribution of men and women in different occupations within the business,as well as, the distribution of men and women in higher and lower paid roles. and on there as well, you cansee the company statement, which, hopefully will outline the stepsthat they're taking towards improving their gender pay gap over time. While we can't predict the future, wecan talk about what's happened overseas.

And I mean in 2018, the UK releaseddata on the gender pay gap there. And, and this was a massive story. It was a story that rivaled Harryand Meghan's wedding coverage in terms of news coverage that it got. But what I'm really interestedin is actually what happened next after that data was released. Yes so the release of the UK's datawas a big news story that year. And that's certainly part of whatmakes policy like this effective. Since the UK reforms were introducedin 2018, the gender pay gap there.

Has narrowed, quite significantly. So we can causally say that the reformsreduce the gender pay gap by almost one fifth with the biggest improvementscoming from the worst offending employers, which does tell us something about howthis naming and shaming has an effect. Now, as well as this, the UK'sreforms have begun to kind of shape employers hiring practice. So research has shown that firms affectedby the policy there are now more likely to post on their job ads, the salaryfor the job that they're advertising. We know that this helps narrow thegender pay gap because it starts.

Men and women applying for the jobwhen they negotiate their salary, they're starting from the same base. What they've shown in the UK is thatcompanies that post these advertisements tend to have smaller pay gaps. So that's a big step in termsof changing employers behavior. One concerning thing that came up inthe UK is that for existing employees the narrowing of the gender pay gapwas actually caused by slower growth in men's wages rather than fastergrowth in women's wages, and that's really not a great outcome for anyonelooking for a pay rise, and especially.

At a time when we have a governmentthat's promised real wage growth. Is there any way that governmentsor businesses can kind of prevent this from happening? It's probably a tricky one for government. you know, for businesses, they makechoices about who they give a pay rise to and, and who they don't. And so, you know, in an ideal world,they would be giving pay rises to women rather than cutting back on growth inmen's pay rises, but ultimately that's a decision for businesses to make andto negotiate with their employees.

I think what we saw in the UK wasthat when senior men went to negotiate a pay rise, the employer would say,Oh, well, we can't give you a big pay rise this year because it'll makeour pay gap statistics look worse. So that's not the outcome that we'relooking for here, obviously, so it's just something we'll have to keep an eye on. So Tash the UK reformsare only a few years old. Do you see anything particularhappening in the longer term? That's right, Kat. We won't see the full effects ofthese reforms for quite some time.

It's likely that making high paidjobs more accessible to women, will allow employers to tap into this greattalent pool, by encouraging more women to work and raising their earningsand our sluggish productivity growth. Women are rational when they makedecisions about whether to work or whether to go for a promotion. if they think they're going to be paidfairly, they're more likely to join the workforce and go for those promotions. and so we won't see the effectsof that for a long time. There's also the incentive ifyou're likely to work more that.

You make bigger investments in youreducation and training, and really commit to that high paid career. Yeah, and there's a little bit of ashift in thinking as well around those high level jobs because with thatcomes experience, of, you know, that comes around that period where womenare thinking about having children and, just not making assumptions aboutwhat women are doing, whether they're having kids, whether they're not,whether they want to go for a promotion. do have to leave that up to theperson, the individual to decide. I think there's also a lot of thinkingat the moment happening around.

Flexible workplace conditions, that'san organization that's demanding everyone comes back to the officefull time, or whether people are more flexible in, offering, conditionswhere parents can work around the school day and things like that. Tash, do you have any otheradvice or tips for employers? What what can they do to reduce thegender pay gap in their organizations? What we've heard from many businesses thisweek is that there are societal factors that influence their gender pay gap. This includes things like women havingto work part time or take time out of.

The workforce to care for children, aswell as women just not wanting to work in the industries or jobs that they employ. And while societal factors domatter for the gender pay gap, that doesn't mean that there's not a lotthat businesses can do to improve. Now, all the way across the hiring,promotion, pay setting process, as well as setting work culture and work conditions,there are things businesses can do. And the Workplace Gender Equality Agencyprovides lots of advice to businesses on what they can do to improve. And there's a lot of research outthere that businesses can lean on.

So I'll talk through a couple of examples. Gender matters for which candidates getrecruited and selected for certain roles. So things as simple as gendercoded wording in job advertisements can affect who applies for a job. often what we see is masculinestereotyped words like competitive or dominant being used in job ads,which put women off roles that they might have otherwise applied for. We also know from research that womenhave to send out many more applications to get the same amount of interviewsas equally qualified men, and this.

Is even worse for racial minorities. Conscious and unconscious bias in jobadvertisements and hiring matters. And that's something thatbusinesses can do something about. And it especially matters as we're movinginto a period of AI recruitment as well. I mean, there's beenseveral, cases of, AI, resume revisions, enforcing gender bias. it's something that businesses shouldbe especially mindful of if they're looking at employing kind of tools thatin theory, save money, but, need to be assessed on on the quality of how theylook at resumes and, present, female.

Candidates and, people of color as well. And then once a woman gets hired, there'sthe step of actually negotiating a salary. So as we mentioned earlier, just postingthe salary range on the job ad helps because it means men and women startnegotiations from the same point. We also know that women can bepenalized for strongly advocating for themselves or trying to negotiatepay, both when they're hired or when they're going for a promotion. And so we have this challenge where womenoften won't negotiate because they think often correctly that they'll be penalizedfor doing so and so that's a big problem.

Again, something that employershave power to do something about. I mean, I've been in that veryexact situation where I haven't negotiated and learned the hard way. I mean, the advice I gotgiven was actually let the employers say the number first. I do really appreciate when job adshave that salary range on there too, because it also gives you a gaugeof how appropriate you are for a role, regardless of your gender. Is there anything else thatemployers can be doing?.

So one more thing in the, in the promotionarea is that often employers give very different feedback to men and womenwhen they evaluate their performance. So men are more likely, for example,to be described as analytical, whereas women are more often described ascompassionate While both of those things are positive descriptors, oneof them is probably more correlated with your likelihood of being promoted. Men are also typically given much morespecific feedback than women on their performance and how they can improve. And women are very often told that theyneed to display more confidence or that.

They need more experience to be readyfor a promotion, much more than men are. In some ways, this is valuing personalitytraits that, men are more likely to have than women, rather than reallythinking about their capacity to perform a job on the other side of things is,actually making jobs available to women. So we did, a podcast recently Katabout claudia Golden's, Nobel prize and this concept of greedy jobs. And we talked about, examples ofindustries where they've actually changed their structure to allow more flexibilityand how much of a difference that makes for women's ability to work in those rolesand especially to work in those higher.

Paid, management or, you know, thesegreedy jobs that take up a lot of time. And so it's on employers really tobe creative about how they structure their workplace and how they offerflexibility to make sure they can tap into, the skills of women. We've seen during the pandemic,this huge change towards working from home, which, you know, no onethought was possible a few years ago. So it just shows that there are thingsemployers can do if they're willing. and it will just takeaction to, get there. I think that's a great placeto wrap it up for today.

It has been a wonderfulconversation on gender pay gaps. And if you're anything like me, you'vebeen fascinated by the way this story has played out in the news and hopefully theprogress that will be made in the years to come from releasing this information. If you'd like to find out more orread Natasha's article online, you can find it for free at grattan.edu.Au. And please do take care andthanks so much for listening.

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