Gender pay gap to persist for 26 years

By Sarah Simpkins

March 29 2021
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The gender full-time remuneration gap will take around a quarter of a century to close, if progress continues at the same pace as it did in the past five years, a new study has projected.

The gender pay gap fell from 24.7 per cent to 20.1 per cent in the last five years, according to research by the government’s Workplace Gender Equality Agency and Bankwest Curtin Economics Centre.

In the same period, there was a 1.4 percentage point reduction in the gender pay gap of managers.

Bankwest Curtin Economics Centre deputy director and associate professor Rebecca Cassells noted that if the average annual rate of change continued, the gender pay gap among full-time executives would be eliminated within 10 years, and for senior managers in less than 15 years.

“For workers in non-management roles, it could take even longer. Some occupations may not see any change at all in their gender pay gap in the coming years,” associate professor Cassells said.

“We also found finance and insurance, utilities and mining companies are the most likely to adhere to best gender equity practices, with the mining sector being the biggest improver in recent years, while businesses in the health care and social assistance sector are only a quarter as likely to adhere to best practice.”

The mining sector was the most improved sector for following best gender equity practices, with an increase of 8.4 points during the 2015-20 period.

Meanwhile organisations in the education and training, healthcare and social assistance sectors ranked lowest on average in terms of their approach to gender equity in the workplace and showed the least improvement in the five-year period.

Libby Lyons, director of the Workplace Gender Equality Agency added progress had stalled in workplaces, with a “worrying level of apathy and indifference among many Australian employers towards improving gender equality outcomes”.

The report had noted a lack of effort to increase the number of women on boards, or in narrowing the pay gap through regular audits.

The rate of pay audit actions had slowed, increasing by only 1.7 percentage points in the latest WGEA reporting data, while in previous years it had averaged a growth of 3.7 percentage points.

Organisations that consistently undertook pay gap audits saw their managerial gender pay gap narrow at a faster rate than other companies, by up to 2.2 percentage points between 2017 and 2020.

“Expecting Australian women to wait a quarter of a century for the total remuneration gender pay gap to close is unacceptable,” Ms Lyons said.

“It may well take longer if employer inertia and complacency lead to a reversal of current trends.”

The effect of COVID-19 remains to be seen, until the researchers collect data for the next year.

Companies that set consistent board targets also saw the share of female directors increase by 7.3 percentage points, lifting from 21.6 to 31.1 per cent between 2015 and 2020.

But there was only an increase of 3.5 percentage points for companies that did not set any targets for women on boards.

“What we do know is that targets work,” Bankwest Curtin Economics Centre director Alan Duncan said.

“Organisations that have set consistent targets for appointing women on to boards, increase the share of female board members at twice the pace of those that set no targets.”

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