The hidden tax on millions of unpaid workers – and women are hit hardest

It’s been 80 years since two British economists, James Meade and Richard Stone, dreamt up a new way to measure national income. They would add up the value of all the goods and services produced and sold in an economy, in any given year. It would be called Gross Domestic Product.

The only woman on Meade and Stone’s team was 23-year-old research assistant Phyllis Deane. She argued that any measure of national income must include valuation of the unpaid household labour done by women. Deane pointed to the work of gathering firewood and hauling clean water, particularly in developing African countries where she had spent time collating data, as fundamental to a nation’s economic success.

During the pandemic, women picked up more of the housework, home schooling and childcare responsibilities.Credit: Stocksy

But sadly, Meade and Stone decided that including “women’s work” in their formula, work like giving birth, cooking meals, cleaning homes and raising families, sounded hard. So they skipped the tricky maths and, to this day, GDP is the dominant measure by which policymakers judge the health of an economy. With the stroke of a pen, a hidden tax on millions of unpaid workers – the majority of whom were, and still are, women – was created.

The pandemic reverberates

In early 2020, just before the COVID-19 coronavirus pandemic turned our lives upside down, author Eve Rodsky was speaking on a panel in Davos, Switzerland. She made what, in hindsight, was an eerily accurate prediction: that by failing to properly acknowledge and reward unpaid labour, many developed nations were “one crisis away from losing 30 to 40 years of women’s economic participation in the workforce”.

When schools closed and millions of workers were sent home in March 2020, many women found themselves facing this real-life catastrophe. They were disproportionately picking up more of the housework, home schooling and childcare responsibilities, while burning out trying to earn a living as well. As a result, millions of women left the paid workforce altogether and many have not returned.

Globally, women’s jobs were 1.8 times more vulnerable during the pandemic than men’s. Women make up just under 40 per cent of the world’s paid workforce but accounted for 54 per cent of COVID job losses. Here in Australia, women were the first workers to be laid off, with particularly vulnerable groups of women being impacted more quickly and severely.

The Australian Government was lauded for its early, effective action to save jobs and lives but even that had a distinct gendered hue. The male-dominated construction industry, for example, lost 5 per cent of work hours between February and May 2020 and received $35 billion in government support. By contrast, the female-dominated hospitality sector lost more than 47 per cent of its work hours and received only $1.3 billion.

Australia’s gendered economic story

The impact of lockdowns did not end with lockdowns themselves. Recruiters have reported a change in priorities among Australian women who have returned to work. Instead of picking up where they left off, more women are taking lower-paid roles for the sake of security and flexibility.

Higher inflation rates mean the financial pressure on women, who earn on average $264 less than men each week, is growing. The price of a weekly grocery shop, topping the car up with petrol, booking a babysitter, filling scripts at the chemist, as well as rent or mortgage payments, are all starting to bite. Women who already had to subsist on lesser incomes must make those incomes go further, compounding a daily struggle – especially for single mothers and migrant, First Nations and disabled women.

Having a family costs money but it also costs women their superannuation and a comfortable and secure retirement. Treasury research reveals that the motherhood penalty is still alive and well. While men’s hours of paid work drop during the first month of parenthood, they return to their previous level of hours and income after that. Whereas mothers do fewer hours of paid work for the rest of their lives.

When Australians become parents, it unsurprisingly impacts their incomes – although perhaps not in the way you might think. Australian women who are mothers earn, on average, 5 per cent less than those who are not. On the other hand, when Australian men become fathers they don’t experience the same penalty. Quite the opposite – Australian fathers are paid, on average, a 7.3 per cent premium over and above men without families.

James Meade and Richard Stone may have considered unpaid work superfluous to their calculations but it’s the cornerstone of households, workplaces and economies. Ask any woman with the financial means to access early childhood education and care, or support with other domestic duties, and she will tell you: the value of these services equates to time, freedom and possibility.

“Having a family costs money but it also costs women their superannuation and a comfortable and secure retirement.”

Jamila Rizvi

Changing the conversation

While many of the more obvious barriers to women’s workplace equality have been removed, the numbers don’t lie. The Australian economic story remains a painfully gendered one, where women’s choices are narrowly dictated by the ramifications of paid work that attracts lower salaries and unpaid work expected at a higher magnitude.

I’ve had the pleasure of working with some of these women, through a program called Jobs Academy that is funded by the Australian Government and delivered by Future Women. I’ve heard first-hand stories of women whose futures were bright and career prospects healthy, but for whom life circumstances intervened and brought them to their knees.

These are women who could be working to fill Australia’s skills and labour gaps today but for the absence of affordable childcare and flexible work, their experience of family violence and age discrimination, untreated mental and chronic illnesses, and the accompanying loss of confidence and conviction. And these women are baffled by public conversations about gender inequality which frame the problem as all about women on boards.

As a 20-something, “the culture” prepared me to face an absence of women on boards, with the same vigour and insistence it warned me to be ready for outfits that would take me “from day to night”. These educational titbits have since proved to have little impact on my life, as I imagine they have for most women my age.

The number of women on boards, working as company executives and occupying ministerial offices is, of course, important. Leadership matters and equality within leadership matters, too, but not to the degree that they dominate public conversation and muscle out more significant issues like making sure low- and middle-income women have enough to live on.

“Australia is home to one of the most gender-segregated workforces in the developed world.”

Jamila Rizvi

Industrial gender segregation is the decidedly unsexy topic. Australia is home to one of the most gender-segregated workforces in the developed world. What this means is that most of us work in industries that are dominated by either men or women, with few of us working in gender-equal spaces. And the professions which employ mostly women tend to pay less than professions which employ mostly men.

Take the so-called caring professions: early childhood education, aged care and nursing. Employees, mostly women, who are consistently and obscenely underpaid because their bosses – and purchases of their services – assume they do it for love, not money. Not to mention that these roles are also more likely to be paid under an award, so no amount of “leaning in”, “hustling” and “girl-bossing” is going to make a difference on pay.

A better way to measure

At the Jobs and Skills Summit in Canberra last year, Dr Danielle Wood told those assembled that if women’s untapped labour were a natural resource, then we’d be subsidising big firms to dig it out of the ground. She’s right. But if we’re going to tap into those women’s considerable skills and abilities, there must first be a shift in our economic conversation and infrastructure.

There is cause for hope. While Treasurer Jim Chalmers and others have had to defend the government’s “wellbeing” budget as more than yoga retreats and ashrams, it’s a fundamentally strong idea. Just as Meade and Stone made decisions about what to measure all those years ago, what gets measured by government today is an indication of where the public will shift its attention.

Gender-responsive budgeting will require decision makers to consider the specific impact of policies on women. Publishing employer-level gender pay gaps will provide new transparency for organisations that aren’t up to the mark. And domestic violence leave will mean women don’t have to worry about lost income in the dangerous early days after leaving an abusive relationship.

On this International Women’s Day week, we stand on the precipice of genuine reform that could benefit women for generations. While the work of feminism is not done yet, we have emerged from the pandemic with renewed determination to do better.

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