Australia’s gender pay gap can reduce by a third finds survey

Mary Wooldridge, Director at Workplace Gender Equality Agency (WGEA)

The seventh edition of the BCEC | WGEA Gender Equity Insights series released recently by the Bankwest Curtin Economics Centre (BCEC) and the Workplace Gender Equality Agency (WGEA) has found Australia’s gender pay gap could narrow by a third if a more balanced gender concentration was achieved across all industries and occupations.

What are the gender pay gaps by postcode?

Drawing on new WGEA data, voluntarily reported for the first time in 2020-21, the analysis finds Aussie’s gender pay gap would fall from 23.3% to 15.6% if 40:40:20 gender concentration – 40% women, 40% men & 20% any gender – was achieved across industries.

The BCEC | WGEA Gender Equity Insights 2022 report uses the new WGEA location data to compare pay metrics, gender pay gaps and organisational practices across Australia’s states and territories as well as regional areas. The analysis reveals the extent to which the overall gender pay gap is driven by higher concentrations of men in high salary industries and jobs, and higher shares of women working in lower salary sectors.

The report found that for Western Australia – the state with the nation’s highest gender pay gap – the gap in total remuneration would halve from 32.1% to 16.5% if a 40:40:20 gender balance was achieved across all industries. In the Northern Territory, the gender pay gap would reduce by two thirds, while New South Wales and Victoria would see gender pay gaps fall by 7.4% and 6.5% respectively. Queensland recorded a larger margin of 8.8%.

Report author and BCEC Director and John Curtin Distinguished Professor, Alan Duncan, said “the report created a better understanding of how the different concentrations of women & men working in individual states & across industry sectors affects the overall gender pay gap.”

What actions does the report identify to address this?

“To achieve a 40:40:20 gender concentration for industries in Australia, gender balance needs to be addressed in both directions,” Professor Duncan said.

“This means increasing the share of women working in male-dominated occupations and industries and growing the share of men in female-dominated professions. We need to see an increase in the share of women in leadership positions from CEO through to executive manager, in roles in the professional, scientific, technical and trades sectors, and a rise in the share of men working in health, community & social services,” Professor Duncan added.

“We also need to reflect on whether the salaries paid to health care, social assistance and community sector workers adequately reflect the true value of their contribution to society. WA had the largest pay gap for total remuneration 32.1%, Tasmania had the lowest 10.4%.”

“We found the gender pay gap was wider in states where more men were employed in higher paying jobs in the highest-paying industries, such as mining and construction,” Professor Duncan said. “We also found women made up a lesser percentage of the workforce for key industries in those states, including only 16% of the construction sector workforce in WA, compared to 31% in Victoria and 27% in New South Wales,” Professor Duncan said.

“We found women made up 80% of the workforce in the health care & social assistance sector, & 2/3 of workers in the education & training sector. The evidence indicates that women don’t have the same opportunities to earn higher wages as their male colleagues.”

WGEA Director Mary Wooldridge said that visibility into the location and age data of employees for the first time provided a rich new data source for a deeper analysis of, and insights into, the drivers of the gender pay gap across most regions of the country.

“What we can see with this analysis is that without clear and actionable gender strategies and targets for improvement, progress on gender equality will stall. Employers who reimagine traditionally gendered roles are reaping the benefits of larger and more diverse recruitment pools, improvements in productivity and profitability and reductions in the gender pay gap.”

“Further, Australia has one of the most highly gender-segregated industrial structures in the developed world. We need to actively challenge gender stereotypes, including those that start informing children from an early age, to realise gender balance across industries.”

How much higher is the gender pay gap in remote areas?

The report also found the gender pay gap was higher in remote areas compared to major cities, with men being paid nearly $17,800 more than women in very remote locations. It also delves into how age affects pay. The research finds the pay gap widens for women as they age, with age of divergence in pay for women & men varying with the sector of work.

Dr Silvia Salazar, also from BCEC, said, “It was concerning women were also impacted depending on what industry they worked in, the region where they worked and what age they were, compared to men. The data shows that gender pay gaps increased for older age female workers, as well as for women working in remote and very remote areas across Australia.”

“These findings raise some important questions about the value that businesses put on the work and contributions of women in older age cohorts compared to men at the same age. It also highlights the impact of the gender inequalities for salary caused by the challenges that women face in accessing the same higher paying roles in the same industry sectors as men.”

“It is inevitable that gender pay gaps will persist if more women continue to work in lower paid industry sectors and jobs, and men are employed in higher concentrations in sectors that pay high salaries. The report invited solutions to break down barriers faced by women in the Australian workforce, adding that businesses play a key role in fixing this problem.”

“Gender composition differences across different industries and sectors is not a justifiable explanation for high gender pay gaps. Instead, this report shines a spotlight on the impact of gender inequalities in terms of pay and most importantly the challenges women face in accessing the same higher-paying roles in the same industries as men,” Professor Duncan said.

“Businesses can take action to level the playing field for women within their organisations or for those looking to join the workforce by ensuring effective policies related to retention recruitment & promotion are in place to promote gender equality opportunities for women.”

“These include a positive attitude towards flexible work, support for people with family & care responsibilities, specific targeted policies to eradicate sexual harassment & promote respect at work & support measures to assist people experiencing family & domestic violence.”

What were the key findings?

  • Australia’s gender pay gap could narrow by more than a third if a more balanced gender concentration was achieved across all industries and occupations,
  • The gender pay gap in WA would halve from 32.1% to 16.5% if a 40:40:20 gender balance across all industries was achieved,
  • In the NT, the gender pay gap would reduce by two thirds, from 25.3% to 8.3%, NSW & Victoria would see gender pay gaps fall by 7.4 & 6.5 percentage points respectively, and Queensland by a larger margin of 8.8 percentage points, from 22.5% down to 13.7%,
  • To achieve a 40:40:20 gender concentration for industries in Australia there needs to be an increase in the share of men working in health care and social assistance, and education and training, coupled with an increase in the share of women working in construction, mining, manufacturing, inform services, transport and wholesale services.

  • There also needs to be an increase in the share of women in leadership positions from CEO through to executive manager, technicians and trades workers and operators and drivers, and a rise in the share of men working in community and personal service occupations, sales positions, and clerical and administrative services,
  • WA has the biggest gender pay gap in the nation, coming in at 26.8% for base salaries & 32.1% when considering other factors such as bonuses, overtime & discretionary pay,
  • For most states and territories, the overall gender pay gap is not caused primarily by salary differences between women and men within specific industry sectors. In most cases, the main driver is instead the high concentration of men in higher salary sectors and women in sectors with lower pay, especially in WA, Queensland and the NT,
  • For people working in major cities of Australia, the gender pay gap in base remuneration is around 19%. However, the gender pay gap rises steadily to 28.2% for those working in remote areas, and to 29.3% for workers in very remote parts of the country,
  • Women working in remote Australian communities are impacted the most, with men being paid an estimated $17, 800 more than women,
  • Women in certain industries, such as construction, health care and education, were more likely to experience gender inequality as they got older,
  • Women working in the construction industry were more likely to experience a higher gender pay gap at the age of 45, compared to 20 years of age,
  • Women aged 55 and over face larger differences in remuneration than their male contemporaries, compared to younger cohorts,
  • Gender pay gaps will persist if more women than men work in lower-paid industry sectors, and more men than women work in industry sectors that pay high salaries; and,
  • Businesses should ensure that all policies and practices related to recruitment, retention and promotion are conscious and consistent in promoting a greater equality of opportunity for women in securing roles across all industries.