New data reveals men get paid considerably more for the same job

There’s a huge disparity in Australia between the pay of some similar skilled jobs. The good news is that these jobs are upping their pay.

ANALYSIS

Do women and men make equal money? The answer is no and the details of the difference have suddenly been laid bare by the tax office. They dumped a mega-load of data for the year 2019-20, and I fell on it like a hungry wolf.

One of the most interesting things the data told me was how male dominated some jobs are.

The next chart shows all the jobs the ATO records, and the ratio of men to women in them. I understand suddenly why I’ve never had a female plumber. Plumbers outnumber their female colleagues by more than 100 to one! Equally you should be surprised if you encounter a male midwife in the birthing suite. There are very few men in that job.

What does the graph show? That the blue dots are on average a bit higher than the pink dots: so jobs with more blokes in them have higher taxable income. The effect is actually not strongest out at the extremes – a plumber earns only a little more than a midwife. It’s strongest for jobs where men outnumber women around 10 to 1, like delivery drivers and engineering managers.

NB. I’ve used log scales on both axes, which helps us see the differences in the clump of data in the middle – it is like putting a magnifying glass on the middle of the graph. But beware! The differences at the left, right, and top edges are much bigger than the differences in the middle.

The big question this leaves dangling is why. Ultimately, if women choose lower-paying jobs freely, then society has no problem. But do they?

The four big problems

1. If women are encouraged to enter lower paying jobs, either directly or subconsciously, then we have a problem. For example, does society make it clear to its daughters that they can be doctors just as easily as they can be nurses? Or do we let them learn by watching the world around them, which tells them most doctors are men?

If we celebrate Elon Musk for getting rich and Princess Mary for marrying rich, what’s the lesson girls learn?

I know girls do as much maths at school as boys, but I have a one-year-old and what I notice is the kids section of Kmart is full of blue astronaut stuff and pink princess stuff, so it seems to me the push toward certain outcomes starts pretty early.

2. A second problem is if we start paying certain occupations less when they have more women in them. Computer coding was once seen as a fiddly, boring task and it was a female dominated field. But now it’s full of bros, and the pay is insane.

Google pays some young coders a million bucks a year once you take stock options into account and they can wear a T-shirt to work.

How did that change happen? Did the men chase the money? Or did the money chase the men? It’s hard to unscramble that egg.

3. A third problem is if women earn less because they work part-time, but not by choice. Underemployment is higher among women and has been for years. Women clearly want more hours than they are getting.

4. A final problem is if women’s careers don’t progress as much because they lose years in the workforce when they take time off to care for kids. Obviously there are some biological necessities here! But the rules around parental leave exacerbate those biological necessities rather than moderating them – there’s lots of pay and leave for mums but a lot less for dads.

The Australian system encourages men to keep working, racking up experience and promotions, while encouraging women to bow out.

After that, if a family has to choose which parent should work more hours, it will make sense to be the one who makes more money – usually the man. That means even when older women work part time by choice, their choices can be affected by that parental leave system that was biased towards assuming men would rather work than do childcare.

It doesn’t have to be like that – Sweden offers up parental leave that either parent can take.

When we look at the jobs where men make more than women, we see a lot of quite high-paid professions with big earning gaps. Men dominate some pretty sweet jobs, few of which seem to require a lot of brute strength, and plenty that use a lot of people skills. It’s hard to make any case for women not being equal in these jobs.

The equivalent chart for women would show women make more in lowly-paid professions like childcare, and even then, only slightly more.

But there is hope. We will end with a chart that shows a bunch of male domains women are breaking into, and where female pay is rising.

Jason Murphy is an economist | @jasemurphy. He is the author of the book Incentivology.