Wage gap narrower as women drive gains in employment
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Strong recent gains in the number of women employed has helped drive female wage growth above that of men’s, narrowing the gender wage gap across Australia.
Female total average earnings rose 4.7 per cent to $1144.30 over the year to November 2022, compared to 2.8 per cent for men, according to the latest data on average wages from the Australian Bureau of Statistics.
Several factors are contributing to the gain in women’s employment, primarily the emergence of more flexible working arrangements.Credit: iStock
The most commonly cited gender pay gap measure, the gap in average weekly ordinary time earnings, fell to its lowest level on record, down to 13.3 per cent – 0.6 percentage points below its pre-pandemic level of 13.9 per cent in November 2019, according to the ABS data.
In more recent times, thanks to strong gains in employment, the female unemployment rate declined to 3.3 per cent in April, its lowest level since at least 1978. On the other hand, the overall unemployment rate rose to 3.7 per cent in April, up from its near-five-decade low of 3.5 per cent in March, and the male unemployment rate rose to 4 per cent from 3.3 per cent.
The slight slowdown in the labour market has been led by a drop in the number of males employed. About 42,000 fewer men had jobs in April 2023 compared to October last year.
In contrast, the number of employed women has jumped, with many transitioning from part-time to full-time jobs. Around 110,000 more women held full-time jobs in April 2023 than in October last year, according to ABS data. Female full-time employment stood at 3,826,900 in April, a record number.
In more good news, the number of women who are long-term unemployed declined by 4,800 or 11 per cent over the three months to March 2023, to stand at 38,600 – the lowest level recorded since May 2009.
Several factors are contributing to these gains, primarily the emergence of more flexible working arrangements. Most workers report that their workplace now provides access to carers’ leave and permanent part-time employment, while more than half of workers report that their workplace provides paid maternity leave.
Around a third report that they can now work from home, which is up from around 20 per cent in 2002.
The Australian government’s approach to gender equality in the workplace has also helped, including legislative reforms that prioritise gender pay equity within the Fair Work Commission’s decision-making process, advocating for minimum wage increases and approving significant wage increases for aged care employees this year.
That is great news for women’s earning capacity and for their retirement savings too. If this trend continues, it should help to close the savings gap in superannuation. Women in Australia earn $1 million less on average over their lifetimes than men and retire with $136,000 less in superannuation, according to research from the Australia Institute Centre for Future Work.
The biggest driver of the gap in retirement savings is still the gender pay gap, which data shows is still wide. Despite the recent narrowing, data from the past decade shows it will only be eradicated by 2053, when more than 60 per cent of the current workforce will be retired.
Men have higher average salaries than women in 95 per cent of all occupations and across age groups, including those where women dominate the workforce.
For example, women account for 99 per cent of all midwives and yet are paid on average 19 per cent less, according to the Centre for Future Work. That means women have much lower superannuation balances than men across age groups.
However, the good news is that the gender wage gap is narrowing and stronger jobs growth for women will help as they enter the workforce in greater numbers, building healthier superannuation balances for their retirement.
Kris Grant is the chief executive of management consultancy, training, and recruitment firm ASPL Group.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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