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The Gender Pay Gap And Why We All Lose

The Australian Workplace Gender Equality Agency (WGEA) has just released its biannual report on the gender pay gap in Australia. According to WGEA, the national gender pay gap has remained stable at 14.0% – or $241.50 per week – for full-time employees. The figure for the previous reporting period was only slightly worse at 14.1%.  If this statistic is not disappointing enough, let me highlight another fact. A decade on, this figure is only a slight improvement of the 1990 – 2009 era, when the gender pay gap remained within a narrow range of between 15 and 17%. Still not disappointed? How about this excerpt from the report; the lifetime earnings gap in Australia is now reported to be 38.8%.

My first natural reaction to this report was to become a keyboard warrior and blast WGEA – the agency responsible for promoting and improving gender equality in the Australian workplace – for not doing enough. I would have expected this improvement to be more than 1-3% over a three-decade period. The other thought I had was to immediately write a simple, short comment on LinkedIn voicing both my disappointment in this figure of 14% and, my support for gender equality.

However, I decided to do a bit more research and pen a short article on gender pay gap and the seemingly impossible journey ahead to get things right.

What is the gender pay gap?

Let us start with what it is not. The gender pay gap is not about two people of different gender being compensated differently for the same work or work of the same value. That is called equal-pay and something Australian women first won the right to in 1969. Unfortunately, equal-pay is also a problem in Australia and other countries and it is a sign of a much deeper issue. But let us shift our focus back to the report. The gender pay gap is a measure of the difference between the remuneration of women and men in the entire workforce. According to WGEA, “it is a symbol of women’s position in the workforce in comparison to men. It is the result of different social and economic factors that have a tremendous impact on how women and men live their lives”.

The gender pay gap – or in this instance (un)equal pay – starts as soon as men and women enter the workforce. Most studies show a gender pay gap at the graduate level in favour of men. This gap is much more pronounced at the postgraduate level. To give more weight to this point, it should be noted that in Australia, women represent close to %60 of domestic students enrolled in universities or other institutions. According to the latest statistics, nearly 45% of women aged between 25-29 achieve a bachelor’s degree or higher, compared to just over %32 of similarly-aged men.

This (un)equal pay issue gradually exacerbates the gender pay gap problem – more on this below – which follows women for the rest of their working life, resulting in 40% less retirement savings compared to their male counterparts.

Why does the gender pay gap exist?

This problem exists due to several reasons;

  1. Discrimination and sexism, pure and simple. There is absolutely no reason why two graduates should be paid differently. This is of importance as most graduate positions have fixed remuneration, negating the argument about the two sexes using different negotiation techniques.
  2. Unequal pay, or another manifestation of sexism. Not only women suffer from unequal pay, but their work is also less valued. Female-dominated industries have consistently attracted lower wages.
  3. The motherhood penalty. Women take on a disproportionate share of unpaid care and domestic work. Limited access to flexible work and paid parental leave means women also spend more time out of work to raise a family. Mothers also find it much harder to return to work as the duration off-work results in tendency by employers to consider other – more current – candidates. Amazingly enough, while mothers are penalised for having children, the opposite problem exists for men. A research from the University of Massachusetts concluded that fathers are more likely to be hired than childless men and tend to be paid more.
  4. Salary negotiation. This is a contentious point. According to a study by Harvard Kennedy School, for jobs in which wages are clearly negotiable, women and men negotiate at the same rate.

Why does the gender pay gap matter?

The gender pay gap results in negative outcomes for;

  • Women are less likely to progress as far as men in their career and accumulate less money for retirement.
  • Men often miss the opportunity to enjoy better work-life balance and to fully realise their role as a carer for their children.
  • The public. The gender pay gap can be a problem from a public policy perspective because it reduces economic output and means that women are more likely to be dependent upon welfare payments.
  • As our reliance on machine learning and artificial intelligence increases, we consume a vast amount of data to make data-driven decisions. These biases in our data could result in an entirely new set of challenges in recruitment, insurance, investments, etc.

How can we eliminate the gender pay gap?

This question is at the core of many research papers and various policies and I certainly cannot do it justice in a short article. There are however some key points which I have listed below;

  • Ensure equal pay
  • Identify and eliminate sexism
  • Identify unconscious bias through workplace training
  • Foster a workplace culture that supports gender equality from the top-down
  • Build an effective gender equality strategy for your organisation
  • Stay accountable to the journey ahead. This means setting targets, measuring impact and reporting results
  • Provide flexibility for mothers returning to work
  • Provide better parental leave schemes

And final notes…

It would be unjust if I was not to highlight two other topics in this article; one is on our flawed and binary western views on gender, and the other is on differences between the male and female brain.

Gender, typically described in terms of masculinity and femininity, varies across different cultures and over time. According to the world health organisation, Gender refers to the socially constructed characteristics of women and men – such as norms, roles and relationships of and between groups of women and men.

For a less dry definition of gender, we can look at some indigenous North Americans’ views. In their culture, gender is seen more in terms of a continuum than categories and perhaps that is the most beautiful definition that everyone could relate to.

Back to our binary, much in need of improvement western views however, we should ask if science has been able to advance our understanding of the human brain as related to gender. The answer to that question is yes. In one research, Heidi Johansen-Berg, professor of cognitive neuroscience at Oxford University, noted that “although there are some brain characteristics that are a bit more common in males, and others that are a bit more common in females, we are all a mixture of these”. Michael Bloomfield, a psychiatrist at University College London highlights the need for a more nuanced understanding of similarities and differences in brain structure between the sexes. “This is important, as many mental illnesses are more common in one sex over the other and we still don’t understand why this is”, he says.

My conclusion; while there are some differences between the female and male brains one is not superior to the other.

Other sources and links:
https://futurewomen.com/hotlists/5-reasons-gender-pay-gap-exists/
https://timewise.co.uk/article/article-real-reasons-behind-gender-pay-gap/
https://www.wgea.gov.au/