Last week, an ANZ Bank discussion paper outlined some sobering statistics about the Australian workforce. While women are working more then ever before in our history, they are being paid on average 18.8% less then men.
That’s a $15,000 discount each and every year… working out to around a $700,000 discount over a woman’s career.
The barriers to equal pay are ingrained in both our cultural thinking about gender roles as well as the structure of our workforce. Calls to address these issues are coming from every corner of our communities. And big business is beginning to lead the charge.
Former Australian Prime Minister Julia Gillard recently helped the ANZ launch a number of initiatives to address these issues. Gillard said that the biggest challenge that we face in addressing the gender gap is our unconscious bias. She said that we need to learn to overcome our cultural stereotypes which are leading to financial disadvantages for women.
The fact is, women do most of the unpaid work in our economy:
Women are also employed in more part-time roles than men.
Taking time out from work means that women find it harder to get promotions and progress throughout their careers. As superannuation is based on a percentage of earnings, this makes it harder for women to build a nest egg, and live off their superannuation when they retire. Sex Discrimination Commissioner Elizabeth Broderick has added that in some instances, women live in poverty in retirement because of the gender pay gap.
The ACTU’s President Ged Kearney has also pointed out that women could be paid less in the same job as a man. “Women remain under-represented on boards, even where women make up the majority of the workforce”.
Let’s look at the statistics for the average superannuation asset balance:
Male: $82 000
Female: $44 000
The Association of Superannuation Funds of Australia has said it is equally as stark at the age of 65. The average balance for a man is $197,000 compared to a woman at $104,000. This superannuation gap is even more concerning when you consider the fact that women are living longer than men – and need their super to last longer.
From an economic sense, the gender gap considers the percentages of men and women in the workforce, the types of jobs they choose, and their relative incomes.
In terms of inclusion, addressing the gender gap is an economic imperative. In Japan for example, the government is actively promoting getting women into the workforce. This helps to address the problems of an aging population and declining workforce. Politicians in America and Europe are arguing along the same lines.
When looking at the types of jobs chosen and relative incomes, this requires a “top down” approach from governments and big business. Influencing this, requires greater female representation in the decision making processes. Both the Labor and Liberal Parties have recognised this problem and discussed how they can bolster women within political ranks. The Queensland Government has recently declared half of state owned corporation boards will have a target of 50% women by 2020.
A number of studies have vindicated companies “standing by your woman”. A diverse board can mean a greater payoff for shareholders, as companies pursue less acquisitive and risky strategies according to a Wake Forest University Business School study on 2,000 companies. A similar study by Credit Suisse Research Institute on 2,400 companies over a decade concluded gender diversity in management improved corporate financial performance and higher stock market returns.
The good news is that in corporate Australia we are progressing on several fronts. The AICD recently released a report showing the number of women on the boards of ASX200 companies has hit 20% in June (the number of female Chairs is 6%). They are now aiming for 30% by 2018.
From an operational perspective, ANZ has tackled the gender gap head on, promising an extra $500 in employer super contributions for its 12,700 female staff. They’ve also recognised the savings system was not designed for women’s lives, and will continue super contributions for staff on paid and unpaid parental leave. They have also committed to a free superannuation advice service for customers with less than $50,000.
Early financial literacy training is also an imperative. A Sunsuper report earlier this year found women were better at managing the family budget than their partner. It also identified that while they are great money managers, they need to consider their long-term goals. This includes more immediate requirements like insurances, saving for a house deposit, and eventually retirement objectives.
Since 2006, Norway has led the way through a quota system, imposing a law that requires companies to have at least 40% representation of women on boards. However there are studies that show this is having an adverse effect, with the value of firms affected dropping by more than 12% for every 10% increase in female board members. The reasoning appears to be that companies may be constrained by not being able to find the best candidates. There’s a lot more to this debate – and not something we will explore further here.
If we are going about changing our unconscious bias towards women, we need to also think our bias towards having men in the workforce. Successfully addressing the gender gap may require us to encourage (and make it easier for) men to spend more time out of the workforce doing more of the unpaid work.
Perhaps we all need to take a leaf out of Annabel Crabb’s “The Wife Drought” with “women needing wives, and men needing lives”.
