Changing roles working to narrow gender pay gap

At the last Australian census women earned 73c for each male dollar. But this simple figure doesn’t give us the full picture on the fairness of pay.

The Australian workforce seems to be slowly ridding itself of pay gap discrimination.

There are many ways of looking at the gender pay gap. The most commonly cited figure compares the income of all male and female workers, regardless if they work full-time or part-time. At the last Australian census the pay gap by this measure was 27 per cent. Put more simply, women earned 73c for each male dollar (compared to 70c a decade earlier).

Women are more likely to work part-time. This measure alone doesn’t tell us about the fairness of pay as it is reasonable that, on average, full-time workers take home more pay — we will discuss later why women are more likely to work part-time and why this will change soon.

Let’s only focus on full-time employed workers. At the last census, 6.6 million people reported working full-time in Australia — 4.2 million men and 2.4 million women. The average full-time working woman earned 86c for every dollar earned by a full-time working man (this is up from 84c during the 2006 census).

Again, this number isn’t enough to conclude that women are earning less than men in any specific profession. Let’s dive deeper into the data.

Whatever you noted down as your job at the last census was assigned one of the 1355 official job classifications by the Australian Bureau of Statistics. Ignoring jobs that couldn’t be assigned to any specific category and jobs with fewer than 1000 workers (I apologise to everyone from the six bungy jump masters to the 999 drug and alcohol counsellors) leaves us with 634 jobs we can examine on a statistical footage regarding the gender pay gap.

Here we find 29 jobs where women out-earn men. Surprisingly, the 3000 female full-time truck drivers earn on average significantly more ($68,000) than the 108,000 male truckies ($61,000).

Female personal assistants earn more than their male peers. Admittedly two-thirds of the 935 male PAs are under 40, hinting at a very recent and slow trend of males entering this female-dominated profession (97 per cent of PAs are women). It’s reasonable to expect that junior workers earn less than senior workers.

If we cast the net a bit wider and say jobs where women earn at least 97c for each male dollar essentially achieved pay equality, we increase our list to 61 jobs.

All in all, between 5 per cent and 10 per cent of all occupations don’t have a gender pay gap (in some jobs, women out-earn men already). Overall, about 8 per cent of all full-time female workers are in professions where they are not (financially at least) discriminated against.

So far we learned that, while the gender pay gap exists, it has been narrowing over the past decade. Let’s explore the income of full-time workers in Australia throughout their career (see line chart). For men, annual median income peaks at 44 at $83,400. Female income peaks six years earlier at $70,000. Arguably, the main reason why women earn less than men and reach their income peak earlier is due to becoming mothers at some stage. Women leave the workforce to care for children.

In the meantime, their colleagues are advancing their careers and are around when promotions and pay rises are handed out. Returning from mat­ernity leave, often after several years out of the workforce, women must work extra hard to catch up to male colleagues who continued to advance on the pay scale in their absence.

As the chart shows, men and women start their careers more or less on the same income. In their 20s income growth starts to slow for women, arguably because more women return to full-time work after maternity leave and receive less pay than male peers.

Let’s split the female income data into two categories, those who had one or more children at some stage in their lives and those who didn’t. Remember, we are still only analysing full-time workers. The pay gap between childless women and men only starts to widen in their mid-30s, whereas the pay gap between men and mothers opens at 21.

One reason for the gender pay gap is that men find themselves more frequently in the type of jobs that pay higher wages.

Drillers, power plant operators, pilots and electrical engineers are professions occupied almost exclusively by men (about 95 per cent) and all receive six-figure incomes. None of the 60 jobs that are heavily dominated by women (over 90 per cent) receive anywhere near a six-figure income — nurse educators with $79,700 come the closest.

The other reason for the ­gender pay gap is simple discrimination. In some organisations, women are still paid less than their equally (or less) qualified male colleagues. The good news is this ­appears to be more commonly the case with workers in their 40s, 50s and 60s.

The Australian workforce seems to be slowly ridding itself of this type of discrimination.

Maybe we should think of the gender pay gap as a primary carer pay gap. I hear your objections. Women are almost always the primary carer so why should we rethink the gender pay gap as a primary carer pay gap? Surely these are just semantics?

A woman giving up her career to care for children makes economic sense in a world where women occupy lower-paid jobs than men. This traditional division of labour within the family unit will increasingly be questioned in the future.

How will a couple divide the family duties of earning and caring when both partners earn the same? What if, god forbid, the woman out-earns the man?

The workforce of the future is only going to be more knowledge-oriented, remunerating education and creativity more generously than other attributes. Put bluntly, the more educated you are the more you are likely to earn.

Considering women are already outnumbering men at universities (56 per cent of university students were female at the 2016 census), there are likely to be ever more couples where the woman out-earns her male partner.

Eventually, these couples will have children and the woman will still be the one to give birth and stay at home for the first few months. I predict we will see more men take on the role of primary carer and stay-at-home dad.

Let’s create a fictitious couple based on census data. They are about to have their first child. She is a 32-year-old human resources manager earning $111,000, he is a 34-year-old taxation accountant taking home $103,000. I’d assume they’d have her return to work as fast as possible. The young couple will be keen on the extra $8000 in the bank and won’t care much about his ego or deflated pride.

He would of course not become a full-time stay-at-home dad but would go back to work part-time eventually — they have a mortgage to pay off, after all.

Couples like this will become more common every year. More and more dads will pick up kids from kindergarten, more and more mother-child groups will be rebranded as parent-child groups and the primary-carer dad will become a perfectly normal sight.

Simon Kuestenmacher is the director of research at The Demographics Group.

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