Addressing the Gender Pay Gap

We note that in reports of early November, the Workplace Gender Equality Agency (WGEA), using ABS data, revealed that the national gender pay gap presently stands at 14.6%, the lowest in twenty years. The WGEA noted that the gap had hovered between 15% and 19% over the past two decades.

The WGEA measures the national pay gap as the difference between women and men’s average weekly full-time base salary earnings expressed as a percentage of men’s earnings. In this context, it is a measure of women’s overall pay positioning in the workforce. Across the entire workforce, as we understand the WGEA’s research release, the gender pay gap across the entire market stands at 21.3%.  We note from the WGEA’s research that the variability in gender pay changes across industries and appears most pronounced in the financial services sector and construction, followed by real estate services, professional scientific and technical services, with information, media and telecommunications not far behind. Recent research is available on WEGA’s website.

In reviewing these emerging issues, Egan Associates determined there would be merit in exploring the gender pay gap as reflected in the nation’s most comprehensive wages data collection produced by the Australian Bureau of Statistics (ABS) on both ordinary time earnings and total earnings.

Egan Associates decided that in addition to reviewing changes in the level and rate of reward adjustments since the Global Financial Crisis (GFC), there would be merit in exploring the gender pay gap as reflected in the nation’s most comprehensive wages data collection produced by the ABS.

National hourly earnings data over the past decade reveals a narrowing of the pay gap for time worked. On the basis of our research and with the knowledge that male total weekly earnings presently amount to $1,769.80, and assuming for calculation purposes an hourly rate of $39.05, it appears that males are working 45.3 hours per week. In addition, female total weekly earnings presently standing at $1,453.10 and assuming $35.60 an hour, females are working 40.76 hours per week.

*Data sourced from data.gov.au, https://goo.gl/8RXEPT


* Data sourced from data.gov.com, https://data.gov.au/dataset/average-hourly-earnings-of-female-and-male-employees
* Adult, Hourly earnings by male employees are higher than female employees.

While the above data and tables below provide insight into the gender pay gap, it is not exhaustive and does not consider other factors which are critical in wage determination. These factors would include work value, that is the comparability of position accountability, hours of work, location of work and conditions of work, as well as the incumbent’s performance. These are matters which, in our judgement, are important in forming any view as to the fairness and appropriateness of remuneration outcome.

Egan Associates have developed tools to facilitate the determination of work value and the establishment of a grading structure for males and females and a pay analytics tool to enable companies to monitor differentials between male and female, having regard to a number of criteria which might include:

▪          Work value,

▪          Performance,

▪          Age,

▪          Length of service.

And other factors which might be considered relevant. The most recent data pertaining to national ordinary time earnings and total earnings of males and females across all industries set out in the tables below highlight the variability between sectors which will also be influenced by gender dominance and the different role bias between the genders.

While the above data has provided guidance in relation to movement over the period since the GFC, in ordinary time earnings for males and females and by industry and State, the differential between the private sector and the public sector on a national basis is set out in the table below.

Over the ten-year period of May 2008 to 2018, the increase in average ordinary time earnings for males has been 41%, in respect of total earnings the increase has been 40%.  Ordinary time earnings have increased from $1,188.40 per week to $1,677.10 per week and total earnings from $1,261.20 to $1,769.80.

For female employees, both ordinary time earnings and full-time earnings over the same period have increased by 43%. Ordinary time earnings have increased from $1,010 to $1,433.40 and total earnings from $1,015.60 to $1,453.10.

The gap between ordinary time earnings and total earnings is likely to reveal that males are working longer hours. The gap across all industries will also reflect the differential participation across various sectors of males and females. The rate of realignment over the period is modest given the starting position where ordinary time earnings for males in 2008 stood at $1,188.40 compared to females at $1,000.10.

If you require further information about this data, please call Zoe Lockyer on (02) 9225 3225.

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