Australia Institute report reveals gender pay gap costing women $3bn a week

Australian women could be $3bn a week better off if the gender pay was abolished, new research has revealed.

The Australia Institute said on average, women on median earnings would be $1.01m worse off over their working lives because of the ongoing gender pay gap.

The gender pay gap – sitting at about 13.3 per cent according to the ABS – has narrowed slowly over the past decade, but data suggests unless there is significant intervention, it will not be completely eradicated until 2053 – when 60 per cent of the current workforce have retired.

And, based on median income data, women also earn $136,000 less in superannuation over their working lives compared with their male counterparts.

The research has been released to coincide with International Women’s Day.

Australia Institute Centre of Future Work senior economist Eliza Littleton said Australian women shouldn’t have to wait until 2053 to have “substantive equality”.

Camera IconAt current rates, the gender pay gap won’t close until 2053. Credit: Supplied

She said focusing on equity when addressing the gender pay gap required the right policies to remove barriers and produce equal outcomes.

“Australian women continue to be paid less than men on average across all industries and occupations, costing us more than $3bn across the economy each week,” she said.

“We know that older women are one of the most vulnerable groups when it comes to poverty and homelessness in Australia.

“Australian women shouldn’t have to wait … We deserve equity today and our research makes several sensible policy recommendations for the Labor government to take action.”

Gender pay gap graphs from Australia Institute report.
Camera IconAustralia has a higher gender pay gap than the OECD total. Credit: Supplied

She said the government should consider “greater access” to free or more affordable earlier childhood education and care, more parental leave for both parents, and mandatory superannuation payment during that leave.

This week, the government’s expanded paid parental leave scheme passed the parliament and is on track to grow from 20 weeks to 26 weeks by 2026.

Ms Littleton noted in her report that it was still below the OECD standard of 60 weeks in total, and the government needed to go further.

Superannuation firm HESTA chief executive Debby Blakey said super inequity was contributing to the gender pay gap and echoed Ms Littleton’s call for the government to start paying super on paid parental leave.

“Failing to pay super on parental leave pay has seen working mums unfairly miss out on billions of dollars in super, and this research shows they’ll keep losing thousands of dollars in retirement savings each year this important equity reform is delayed,” Ms Blakey said.

“Extending the super guarantee to workers taking paid leave to care for children is an important policy that will help create a fairer retirement system for all Australians and is a key step towards addressing the gender super gap.”

Gender pay gap graphs from Australia Institute report.
Camera IconMen have a higher salary than women in 95 per cent of all occupations. Credit: Supplied

The report also recommended the government, and industries, consider greater family-friendly work practices and deliberate policy to lift the wages for industries dominated by women – particularly in the care sector.

The report found that in occupations where men make up more than 80 per cent of the workforce, the average salary is above $100,000, but no occupation where woman make up the same share has such a high average salary.

For example, midwifery, a female-dominated industry, has women earning on average $67,857 to their male counterparts’ $83,713.

The report found that there were “many factors” that drive the gender pay gap around the world, but global explanations like low female employment and educational levels are not as significant in Australia as they are elsewhere.

Instead, the “major reason” for the gender pay gap in Australia is the strong “gender segregation of employment across industry, occupations, and job quality”.

Australian women continue to be overrepresented in low-paid sectors and insecure jobs, like the care sector and casual work, and underrepresented in high-paid sectors and jobs.

The lingering unpaid work hours factor also impacts women more than men, with women spending 81 per cent more time doing unpaid domestic and care work than men, more than their counterparts in Canada, the US and the UK.

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