The gender pay gap – currently at 13.3 per cent when comparing the full-time weekly earnings of men and women – is one of an array of metrics for measuring the extent of gender equality in the workforce and whether we are making progress in reducing gender inequality over time.
One way to interpret the gender pay gap is that it reflects and encapsulates the gender-based barriers and biases that exist in our workplaces and wider society.
It should be interpreted as a sign that the strengths and capabilities of women are not being fully recognised and valued.
The factors that contribute to the gender pay gap are multiple. These include employment patterns in industry and occupations, women having less opportunity to build experience due to social norms in caregiving and age discrimination faced by older women. The pay gap especially reflects the influence of gender stereotypes and implicit biases that still permeate workplaces and wider society.
These inequities are amplified for First Nations women, women from lower socioeconomic backgrounds, women living with a disability, migrant women, and women living in regional and remote areas.
The factors behind the gender pay gap run far deeper than merely inequalities in opportunities. It reflects imbalances in power. Because power determines ‘what is valued’ in society.
How much does the undervaluation of ‘women’s work’ explain the gender pay gap?
A key factor contributing to the gender pay gap is the low value associated with work mostly done by women.
This shines through in the data. Female-concentrated industries and occupations tend to be on the lower end of the pay spectrum, while many male-concentrated jobs sit on the upper end.
The graphs below illustrate how jobs that are mainly done by women (right side of the graph) tend to be bunched below the average hourly income rate. Jobs that are more gender-balanced (in the centre) or male-concentrated (left side of the graph) have a wider spread of hourly income rates which span into the ‘above-average’ range.
Exactly how much does this gender picture of employment explain the gender pay gap?
Using the latest data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey and the 2021 Census, I crunched the numbers to investigate the link between the hourly wage rate and the gender composition of each occupation and industry.
The data verifies that a systemic link exists.
Male-concentrated occupations experience a 6.5 per cent wage premium, while male-concentrated industries experience a 3.1 per cent wage premium, compared to occupations and industries that are gender-balanced.
On the other hand, female-concentrated occupations experience a 2.6 per cent lower wage compared to gender-balanced jobs.
Are these wage premiums due to male-concentrated jobs requiring more experience and skills? Well, no because the analysis controls for educational attainment, years of experience, cognitive ability and language proficiency.
Is it because men are working longer hours while more women than men are in part-time jobs? Well, no because these calculations use hourly wages, not weekly or annual earnings.
Is it because male-concentrated jobs are riskier and more dangerous? Well, no because the analysis takes into account fatality and worker injury rates using data from Safe Work Australia. The wage premium for male-concentrated occupations and industries remains.
The higher pay of male-concentrated jobs, combined with the lower pay of female-concentrated jobs, adds up to explain almost one-third of the overall gender wage gap across the workforce.
It reflects a historical legacy in Australia’s industrial relations system, which once explicitly deemed that working women would be entitled to only a fraction of the income earned by men, based on the reasoning that men had a family to provide for. This contributed to the notion that there are ‘women’s jobs’ and ‘men’s jobs’ in the workforce. And it mirrors longstanding social norms that prescribe distinct roles for men and women in society – men as breadwinners and women as caregivers.
The undervaluation of women’s work in the home
The undervaluation of ‘women’s work’ spills over into the realm of unpaid work and care.
The newly relaunched ABS Time Use Survey data provides us with official statistics. While men contribute more hours on average to paid work, women contribute more hours on average to unpaid domestic work, childcare, caring for adults and voluntary work, as illustrated in Figure 2. These are all activities that have productive value but are unpaid.
We can put an estimated dollar value on the labour value of this unpaid work by looking at the average pay of proxy occupations, such as childcare workers and domestic cleaners for example.
The value of the total labour allocated towards unpaid work by Australian households each year adds up to around $570 billion. And two-thirds of this is contributed to by women.
Unpaid work isn’t recognised in official economic statistics. But when we add together the value of the labour that is allocated to unpaid work with paid work, we find that women are certainly pulling their weight by contributing around almost half of this total.
The difference is that around half of women’s labour contribution to the economy is in the form of unpaid work, compared to 29 per cent of men’s.
In other words, men are remunerated on average for around 70 per cent of their labour efforts, while women are remunerated for only half.
Why does it matter?
These calculations have widespread implications.
At an individual level, computing the value of unpaid work can be informative for financial settlements on the division of assets between couples. It amplifies the importance of policies that break down gender norms in caregiving – such as increasing the amount of paid parental leave specifically allocated to fathers and partners – so that time use across both unpaid and paid activities is not so starkly delineated by gender.
But the systemic undervaluation of ‘women’s work’ has implications for the wider economy. What we also observe is an inverse pattern between the female concentration of an industry and labour productivity measures. This is not to suggest that these sectors are less productive, but to propose the possibility that their true productive value is being systematically under-estimated.
The value of the ‘output’ generated by care and human services – which is largely based around human interactions rather than a standardised factory line – is admittedly hard to measure. The Productivity Commission describes the transient nature of human services as ‘things you can’t drop on your feet’. The positive spillovers of these jobs for society also means it’s highly likely their actual worth is not being fully captured by their current pay rates.
As the economy battles stagnant wage growth and slowing productivity, at the same time that care and community service jobs are part of the fastest-growing sectors of the paid workforce, it’s worth contemplating whether Australia’s productivity slowdown is, at least in part, due to mismeasurement of true productive worth of this sector.
We need to invest in properly measuring the economic value of care and female-concentrated sectors. We need to ensure that innovation and investment are channelled towards these sectors, and in ways that further enhance workers’ capacities. Most importantly, we need to ensure that the real productive value of these services flows through to the wages of workers in these sectors, in recognition of their true worth. That would be gender equity.