Date posted: 1/12/2016 5 min read

Why does gender pay inequality still persist?

Despite a decade of heated political and social comment, the gender pay gap is widening. But why is this?

In brief

  • The Australian pay gap has hovered between 15 per cent and 18 per cent, but recently hit a 10-year high of 18.2 per cent
  • Work is structured to suit workers without significant caring duties
  • Women leave the workforce for caring duties but find it difficult to re-enter

By Kate Mills

Despite a decade of heated political and social comment, the gender pay gap is widening and many professional women still face unnecessary barriers to full participation in the workforce. The Australian Bureau of Statistics has tracked the gender pay gap for ten years.

During this decade, gender equity has never been far from the front pages as companies and politicians have worked to put policies into place to increase female workforce participation. Currently this is at just under 60 per cent compared to more than 70 per cent for men.

It’s a similar situation in New Zealand where men’s participation rate is 75 per cent compared to women’s participation rate of 63 per cent.

Since 2004 the Australian pay gap has hovered between 15 per cent and 18 per cent, but in the most recent figures the pay gap hit a ten-year high of 18.2 per cent.

The disparity starts at the beginning of careers — a report from Graduate Careers Australia notes that the average starting salary of a female university graduate is A$51,600 compared to A$55,000 for a male graduate.

It ends in severe disparity in retirement, according to the Association of Superannuation Funds of Australia. It says that women currently aged between 65 and 69 have an average super fund of A$37,000, one-third of the average for men the same age.

New Zealand women get a better deal thanks to a smaller pay gap of 9.9 per cent, according to the New Zealand Income Survey by Statistics New Zealand. However, this still translates into a retirement savings gap of 25 per cent.

It’s these figures that underline why we need to take the issues facing women at work seriously — we have a system that is structurally unfair to women with the same qualifications, skills and career desires as their male counterparts.

Flexibility

There is no one easily identifiable reason for this and the lack of progress — despite the presence of political will — points to myriad social and cultural issues that are resistant to policy direction.

However the hurdles that women — and particularly mothers — face in the workforce can be set into two groups. The first group of hurdles is external factors such as visible and invisible expectations and behaviours at work along with the political framework around work and children. These hurdles are easy to identify but have proved frustratingly difficult to fix.

At a certain stage in their career, women — particularly after they have children — encounter a range of behaviours that work against them in the office. A senior executive recounted the impact of cultural factors. As a senior manager most of her colleagues were males who would “regularly go off and play golf and their conversations could be very exclusive”.

Work is structured to suit workers without significant caring duties. The impromptu opportunities to network after work, for example, are only open to those that don’t have to dash out the door to pick up children at 5pm.

These external factors in the workforce could be minimised through effective action by organisations.

On flexibility, for example, the burden of proof could be reversed. Imagine a world where all jobs are considered to be capable of being done flexibly unless it is proved that they cannot be done flexibly. Organisations like Telstra in Australia are going down this path where now all roles at the company are advertised as being flexible.

There is also a range of economic factors that do not support women at work — such as access to childcare.

Good childcare of the quality that we demand is going to be expensive. Currently the Australian government spends A$7b each year on childcare and in the current environment it is difficult to see that going up.

The government should focus on increasing supply rather than reducing cost. There are a number of childcare options (such as nannies) that currently do not benefit from a tax rebate, while in New Zealand and the UK the use of nannies is funded and regulated.

On the other hand, childcare costs should not dissuade women from working. In discussions at home the cost of childcare should be set against both salaries and seen as an investment in the main carer’s career.

Imagine a world where all jobs are considered to be capable of being done flexibly unless it is proved that they cannot be done flexibly.

Ease of return

The harder set of factors to influence is the internal ones — these are subtle and go to the issue of female confidence.

“I find it difficult to ask and argue and make my case,” says one senior level manager. “Where I work at the moment I have not been promoted for three years despite less able people being promoted ahead of me. I can see that being a team player is not getting me anywhere.”

Attacking this confidence issue is complex — there is plenty of research backing up the finding by Hewlett Packard years ago that its female employees would not apply for jobs unless they felt they met 100 per cent of the criteria, while its male employees would plump for a role even if they fitted only 60 per cent of the criteria.

In response, women need to access all the coaching and mentoring on offer — either supplied by their company or privately — to address this issue. They also need to always remain cognisant of the risk/return ratio. Put simply, to get ahead women need to be comfortable with taking more risks.

Another internal factor is that women opt out of the race — often for very good reasons.

“I think that women get tired and run out of steam,” says a senior manager. “You can work really hard at corporate life and then go home to a family with a different set of demands.”

For these reasons it is important that women see their career as a marathon, not a sprint.

It’s entirely feasible that for a period of time in a woman’s life it becomes impossible to hold down a full time job, or there just comes a time where it’s more important to be at home.

The issue then is not about women leaving the workforce, it’s about the ease of return. Women should be aware that taking a two-year break from the job market can make it tough to get back in. That’s not to say that women (or men) should not take two-year-plus breaks from working, but rather how important it is to plan for the return. This could include continuing to work part time, volunteering and keeping your work network alive during any break.

Kate Mills is a mother, journalist and founder of professionalmums.net

This article was first published in the February 2015 issue of Acuity magazine.