OPINION | Women can’t afford another two decades of inaction on the gender pay gap, and neither can the Australian economy.
A little over a year ago, the Senate Economic Committee’s inquiry into women’s economic security in retirement, which I chaired, handed down its final report. That inquiry benefited greatly from contributions from the financial services sector.
Our final report made a number of recommendations about how we could make our superannuation system more fair for women. However, a key finding of that inquiry was that the gender gap in super outcomes is largely symptomatic of a much deeper issue. Women are retiring with less than men because women earn less over the course of their working lives.
Little progress on pay gap
The issue was referred to the Finance and Public Administration References Committee to be the subject of a follow up inquiry into gender segregation in the workplace and its impact on women’s economic equality, which I also chaired and that recently wrapped up.
There is much to be done. When I entered the workforce about 20 years ago, the gender pay gap was 17 per cent. Today, official data from the Australian Bureau of Statistics shows, it is 16 per cent. Those two decades brought some of the strongest economic growth in our history. Despite that, we have not found a way to fix what is an unfair economic outcome for women.
Addressing the gender pay gap should be of particular interest to superannuation funds, as it disadvantages roughly half of their members. And of course, it also affects professionals working in the sector as individuals and employers.
The financial services sector has the highest gender pay gap of any industry in Australia. This should prompt funds to take a closer look at their workplace structures and practices.
The gender pay gap may also have broader implications. The latest monthly Melbourne Institute – Westpac Institute Consumer Sentiment Survey found that consumer sentiment dipped 1.8 per cent between May and June, with all of the deterioration in confidence coming from female respondents. One wonders whether women’s flagging confidence is connected to their accurate perceptions that their own fortunes do not mirror their male peers.
Impact of segregation
It is a common misconception that the gender pay gap results from simple discrimination – a firm hires two accountants and pays the man more than the woman. Although this is a part of the gender pay gap, it is not the whole story.
Today, the second-biggest driver of the gender pay gap is occupational and industrial segregation. In Australia, 60 per cent of industries are dominated by one gender or another. Social and structural factors direct women into ‘pink ghettos’ with lower pay and fewer opportunities for advancement.
The finance sector is not immune to these drivers. During the Senate committee hearings, we heard from women in finance who were told, “we do not do part time in business banking,” or “we do not do part time in financial planning. If you want to work part time…you can come back to work as a teller”. Businesses have enormous opportunity to actively tackle these structural problems, and in the process deliver a much fairer and more productive workplace.
These issues are not going to go away on their own. During the recent inquiry into gender segregation in the workplace, we heard from academics and employers, unions and working women. What became clear is that gender segregation and the gender pay gap are complex problems requiring a co-ordinated solution.
That is why we are calling for the government to set up a national policy framework for pay equity. It is no longer enough to measure the gap. We need to take steps to close it.
For two decades, the pay gap has barely budged. Unless government makes pay equity a priority, we will be in the same place two decades from now. Neither women nor our economy can afford that.
Jenny McAllister is a Labor Senator for NSW. This column first appeared in the July 2017 print edition of Investment Magazine. To subscribe and have the magazine delivered CLICK HERE. To sign-up for our free regular email newsletters CLICK HERE.