Factors Contributing To Gender Pay Gap In Australia: A Detailed Analysis

The Issue of Gender Pay Gap in Australia

Question:

Describe about the Report on Gender Pay Equity?

The report aims at discussing in details about the factors that contribute to the pay gap in Australia and the reason why the gap is more significant in some industry sector while not that significant in others. The issue of gender pay gap has been a crucial one in Australia and several research studies have been undertaken to get an idea in depth about the major causes of such issue. Analysis of the Australian Bureau of Statistics (ABS) earnings data confirms that a persistent gender wage gap exists in Australia where males receive higher wages than females undertaking equivalent work. Amidst 1990 and 2009, the gender pay gap remained in a narrow range of between 15% and 17% (Charlesworth and Macdonald, 2014). In the recent years the percentage difference has further increased from 15% to 18% in August 2014.

In Australia the figure for gender pay gap is around 17.5%. With only minimum changes the value almost remained the same since last twenty years. This is influenced by various interrelated factors of work, society, even the idea of work men and women are supposed to do or get engaged in. Over the past few decades, several changes have been noticed in the manner in which Australian women are said to participate within the society as well as the economy (Hart, 2002). In the present day, women are observed to be more participative in the paid employment; they are highly educated, and having few children.

The concept of gender pay gap refers to the difference amidst the mean of all male as well as all female earnings when expressed as percentage of male earnings. The concept is predominant in the nation of Australia where it is calculated upon full-time weekly earnings before tax as well as excludes aspects like pay or overtime which is salary sacrificed. Since the concept of gender gap does not count for earnings of part-time workers, it provides a value that is comparable (Jones and Torrie, 2009). In Australia the figure for gender pay gap is around 17.5%. With only minimum changes the value almost remained the same since last twenty years. This is influenced by various interrelated factors of work, society, even the idea of work men and women are supposed to do or get engaged in. Over the past few decades, several changes have been noticed in the manner in which Australian women are said to participate within the society as well as the economy. In the present day, women are observed to be more participative in the paid employment; they are highly educated, and having few children.

The issue of gender discrimination occurs when an individual is unfavorably treated on account of his or her gender. It even arises indirectly from various choices as well as plans regarding education, family plans, jobs that are undertaken by men and women. Often, women are forced to seek the low pay part time jobs with less or no flexibility or career advancement due to caring responsibilities (McDonald and Thornton, 2014). Very few opportunities exist for training as well as career development in casual employment. The most effective way to address the issue and resolve it is by proper analysis. Grouping of comparable jobs as per the extent of the pay gap ensures a deep analysis of the gender pay gap as well as enable the firm to have a clear understanding of the presence of such gaps in specific areas.

Factors Contributing to Gender Pay Gap

The actual causes of this issue of gender pay gap are quite complex as well as interrelated. It has been identified from the Australian studies that some of the key factors that played important role in this issue are:

• Acute discrimination
• Different balance of paid as well as unpaid work undertaken by men and women throughout their lifetime (Pillinger, 2005)
• Various industries where women are compared to that of men and even undervaluation of occupation where women are employed massively.

Gender Discrimination – The issue of gender discrimination occurs when an individual is unfavorably treated on account of his or her gender. It even arises indirectly from various choices as well as plans regarding education, family plans, jobs that are undertaken by men and women. These preferences impact opinions regarding which careers would be perfect for women, for instance, to get fitted in some caring responsibilities. It is a common phenomenon that employers make assumptions regarding the kind of jobs as well as career paths most appropriate for women and the assumptions often may impact their decisions related to job applicants as well as existing employees. These assumptions are the basis of discrimination majorly. The factors contribute towards gender pay gap since they impact upon women applying for jobs, what jobs are offered, and what extent these can be progressive. As per a study of NATSEM (Reese and Warner, 2011), it estimated that around 60% of the pay gap occurs on account of either discrimination directly or due to some other factors to do with being a woman. Another study in Australia reflected that around 70-90% of such gender pay gap could not be explained by personal or any workforce factors like related industry or employment experience. Rather it was suggested that the gap was predominant due to simply being female.

Career Breaks – Even to this day, women are said to take up most of the unpaid care work of the society. This affects their educational as well as occupational choices, with special perception of some work being more ‘family-friendly’ than others (Singh and Peng, 2010). Adopting career breaks as well as part time working not only affects present income of women, but the prospects of long term earnings can never fully recover. This is often witnessed in case any woman takes maternity leave.

Industrial Segregation – While participation of women within the workforce is increasing steadily, they opt for working at various industries at par with men. This is referred to as industrial segregation.  The employment industry is the key factor for determining the wage level as well as women concentration in specific industries increase this issue of gender pay gap even further (Singh and Peng, 2010). To illustrate this, two industries of retail and mining may be represented. Only around 14.5% workers within mining industry are women. On the other hand, retail sector comprises of 57% women workers.

Occupational Segregation – The concept of occupational segregation occurs women get represented excessively in one occupation and minimum at another occupation. More women are employed at occupations that include clerical as well as administrative workers, personal and community service workers, professional, and sales workers. As in one hand studies show that this concept adds to the gender pay gap, other reveals that women being paid quite less than men in the similar occupation is a factor in the gap.

Gender Discrimination

Under-valuation of Women Skills – Women have dominated work like social welfare or care work, but with under-valuation. The roles required for care works are compassion or ability to care for others but these have never been rewarded or recognized just the way technical skills have been done (Smith, 2009). The concept of under-valuation of female skills reflect the age-old history of the developing work of women, societal expectations of men as well as women, and even that of Australian system. As per a recent study of a case of social as well as community services equal pay, it shows the way of under-valuation of women skills impacts their pay.

Sex segregated labor market – The nation Australia has a sex segregated workforce. This refers to the clustering of women into different occupations or industries. The specific occupations are said to be male dominated and comprises of more value for men than for women. This under-valuation issue had been one the major causes for such a problem in the country. The skills or work associated with female labor are said to be natural or innate, and thus failed to receive adequate value in the labor market (Whitehouse, 2003). The work of women may be undervalued due to specific reasons like absence of exact classifying structure, faulty recognition of skills, absence of detailed assessment of work, and insufficient application of earlier equal pay measures.

Unsupportive working arrangements – There is a lack of permanent part-time jobs as well as flexible work arrangements which prevents the capability of combining quality employment as well family responsibilities. It means that all women having a family or children or carrying responsibilities are less participative in the paid workforce. This is the cause of reducing the earning potential of women in short as well as long term, even the ability to accrue retirement savings. Often, women are forced to seek the low pay part time jobs with less or no flexibility or career advancement due to caring responsibilities. Very few opportunities exist for training as well as career development in casual employment. The adoption of flexible work arrangements by firms to support increased work life balance by the women of the nation would allow increased work participation of female employees. This would provide them with enhanced opportunities to develop in the society.

Traditions and Stereotypes – Segregation is often linked with traditions as well as stereotypes. In some cases, this shows personals preferences, traditions may impact, for instance, the various choices made by women of girls. Although graduating women are 60%, they are in minority in fields like computing, mathematics, and engineering. There are very few women in technical or scientific jobs. This often results in females working in low valued or lowly paid sectors of the economy. Due to the traditions as well as stereotypes, women often reduce their work hours or pursue elderly or child care.

The issue of gender pay gap has been most common one in the country of Australia. Another interesting fact is that this issue of gender pay gap is most common in some of the industrial sectors while not prevalent in others. It is a common phenomenon that employers make assumptions regarding the kind of jobs as well as career paths most appropriate for women and the assumptions often may impact their decisions related to job applicants as well as existing employees (Whitehouse, 2003). These assumptions are the basis of discrimination majorly. It has been research observation that in some of the sectors like mining and other hazardous occupation, there is an acute existence of gender pay gap. This is because commonly women are not allowed to take up hazardous jobs in mining or such occupations. Those jobs are undertaken by men. Hence, pay gap is obvious.

Career Breaks

Again, in cases of caring work and responsibilities or any household jobs, women are usually preferred and recruited. This is because women are assumed to be good and effective at the care responsibilities. So, this shows that there is no gender pay gap in hospitality management, healthcare services, etc. There women are paid equally and even higher than men at times. On the other hand in the sector of mining, or heavy engineering, discrimination in wage distribution is a common phenomenon as in these sectors mostly men or male employees are preferred more than women (Reese and Warner, 2011). It is because women are not expected to work in adverse or hazardous conditions. The employment industry is the key factor for determining the wage level as well as women concentration in specific industries increase this issue of gender pay gap even further. To illustrate this, two industries of retail and mining may be represented. Only around 14.5% workers within mining industry are women. On the other hand, retail sector comprises of 57% women workers.

The issue of gender pay gap not only cast cost upon individuals in terms of income, but also impact economic performance. Ever since 1980s, feminist economists have been engrossed in arguing for recognition of the gender issue to achieve macroeconomic objectives. It has been researched that gender gap in pays may prevent an economy from achieving macroeconomic objectives, and so deemed to be a cost to the economy.

The concept of gender pay gap is fatal and discriminating in itself. This is an adequate reason amidst female workers or even others to consider an organization to be partial or discriminating. This perception on an increased basis may lead to downfall of workforce demographic and certainly affects the organizational reputation negatively. Therefore, firms must implement some steps to counteract the issue of gender pay gap (Singh and Peng, 2010). These steps are as follows:

• Understanding the Issues – Firms can access important useful information, tools, amd resources under the Learn section of the WGEA website.
• Conducting analysis of a gender pay gap – The most effective way to address the issue and resolve it is by proper analysis. Grouping of comparable jobs as per the extent of the pay gap ensures a deep analysis of the gender pay gap as well as enable the firm to have a clear understanding of the presence of such gaps in specific areas.
• Improving accountability – Once a firm has established a policy of equal pay, it needs to ensure proper implementation by means of management accountability. It may include monitor of policy, implementation by governing body as well as relating achievement of pay equity to KPIs of CEOs as well as managers (Jones and Torrie, 2009).
• Reviewing human resource policies as well as procedures – Such policies as well as procedures must be reviewed for ensuring they may not prevent engagement of female workers. For instance, firms must ensure that fair recruitment as well as promotional practices needs to be incorporated, part-time jobs at higher levels must be facilitated and also gender bias in remuneration must be removed.

Conclusion:

From the above study about the concept of gender pay gap, the report provides a deep insight into the vital factors that result in such an issue. The actual causes of this issue of gender pay gap are quite complex as well as interrelated. The most effective way to address the issue and resolve it is by proper analysis. Grouping of comparable jobs as per the extent of the pay gap ensures a deep analysis of the gender pay gap as well as enable the firm to have a clear understanding of the presence of such gaps in specific areas. It may include monitor of policy, implementation by governing body as well as relating achievement of pay equity to KPIs of CEOs as well as managers. The issue of gender pay gap not only cast cost upon individuals in terms of income, but also impact economic performance. Ever since 1980s, feminist economists have been engrossed in arguing for recognition of the gender issue to achieve macroeconomic objectives.

References

Charlesworth, S. and Macdonald, F. (2014). Australia's gender pay equity legislation: how new, how different, what prospects?. Cambridge Journal of Economics.

Hart, S. (2002). The Pay Equity Bargaining Process in Newfoundland: Understanding Cooperation and Conflict by Incorporating Gender and Class. Gender, Work and Organization, 9(4), pp.355-371.

Jones, D. and Torrie, R. (2009). Entering the Twilight Zone: The Local Complexities of Pay and Employment Equity in New Zealand. Gender, Work & Organization, 16(5), pp.559-578.

Marshall, C. (2000). Policy Mechanisms for Gender Equity in Australia. Educational Policy, 14(3), pp.357-384.

McDonald, J. and Thornton, R. (2014). “COERCIVE COOPERATION”? ONTARIO'S PAY EQUITY ACT OF 1988 AND THE GENDER PAY GAP. Contemp Econ Policy, p.n/a-n/a.

Pillinger, J. (2005). Pay Equity Now!. International Feminist Journal of Politics, 7(4), pp.591-599.

Reese, C. and Warner, B. (2011). Pay Equity in the States: An Analysis of the Gender-Pay Gap in the Public Sector. Review of Public Personnel Administration, 32(4), pp.312-331.

Singh, P. and Peng, P. (2010). Canada's bold experiment with pay equity. Gender in Mgmt: Int J, 25(7), pp.570-585.

Singh, P. and Peng, P. (2010). Canada's bold experiment with pay equity. Gender in Mgmt: Int J, 25(7), pp.570-585.

Smith, M. (2009). Limits and Possibilities: Rights-based Discourses in Australian Gender Pay Equity Reform 1969–2007. Gender, Work & Organization.

Whitehouse, G. (2003). Gender and Pay Equity: Future Research Directions. Asia Pacific Journal of Human Resources, 41(1), pp.116-128.