“The evidence provides a stark warning”: Australia is at risk of losing a decade on equal pay progress

Over the last few years on Equal Pay Day — the day that traditionally marks the additional days that women must work from the end of the previous financial year to earn the same as their male counterparts — the coalition government has sought to, rather awkwardly, “celebrate” Australia’s minuscule progress towards closing the gender pay gap.

Last year’s 0.1% closure elicited a ‘let’s party’-type response from the Office for Women.

A few months later, Treasurer Josh Frydenberg got so carried away, he declared the gender pay gap “closed”, which proved awkward when the Minister for Women, Marise Payne, had to correct him.

Suffice to say, these attempts to put a positive spin on the gender pay gap, which sees women on average earn $253.60 less per week than men, have gone down like a lead balloon.

Now this year, as we prepare to mark Equal Pay Day on Friday, August 28, surely no one — not even the Office for Women or the have a baby “for country” Treasurer — would dare suggest there’s ‘great news’ for Australian women.

The real news this Equal Pay Day — news that will defy any attempt at positive spin – is that the gender pay gap, currently sitting at 14%, stands on the precipice of a significant backwards slide driven by long unresolved structural issues that failed to hasten its closure at the best of times, that are now rocket-fuelled by the pandemic.

Women are bearing the brunt of job losses, lost hours, the pandemic caring burden, and their work in female-dominated industries, though belatedly now deemed ‘essential’, remains grossly undervalued.

Labour economists say this will “scar” a generation of women’s earning potential.

Leading experts are deeply concerned. The stakes are high: this is no ‘ordinary’ Equal Pay Day, they say.

This year, more than ever, we need a transparent, wide-ranging debate – and action across all the drivers of the gender pay gap.

A lost decade – or more

In a press release issued earlier this month alongside the release of the 2020 national gender pay gap figures, Libby Lyons, the director of the Workplace Gender Equality Agency (WGEA), warned of a “lost decade”.

“Over the period of the global financial crisis (GFC), our last economic downturn, the gender pay gap shot up 2.0 percentage points from 15.6% in November 2007 to 17.6% in November 2009,” Lyons said.

“It took us 10 years to bring that back down to where it is today.”

“We cannot afford to see a repeat,” added Lyons. “It will be a disaster for the economy, and a calamity for Australian women.”

In the US, a new study by a number of economists published earlier this month also warned of a lost decade. The economists projected that the gender wage gap in the US would widen by five percentage points, so that the average female worker will earn about 76 cents for every dollar the average male worker makes.

“It’s going to take more than 10 years for the gender wage gap to close to what it was before the pandemic,” Jane Olmstead-Rumsey, an economist at Northwestern University said.

Back in Australia, associate professor Elizabeth Hill of the University of Sydney, whose work focuses on the political economy of work, gender and care, tells Women’s Agenda that the risk of a lost decade — or even more — is real. The current crisis has shown how fragile women’s gains in the workplace are.

“The evidence provides a stark warning,” says Hill, who is also the co-convener of the Australian work and family policy roundtable.

“There is an urgent need to apply a gender lens and design gendered responses that take women’s labour market experience and their economic security seriously,” Hill adds.

“Failure to do so will have a significant — and a cumulative — long-term impact … and set women back, maybe decades.”

Professor Rae Cooper, a professor of gender, work and employment relations at the University of Sydney, is likewise concerned.

“If we continue to do nothing, which is what we seem to be doing right smack in the middle of a pandemic and a recession, then the gender pay gap is going to get much wider, and it’s going to take a lot longer than ten years to narrow it,” she tells Women’s Agenda.

We’re not measuring what we need to “manage”

In gender pay gap policy circles, there’s a popular refrain: “What gets measured gets managed.”

It is frequently used to justify the need to collect data on the size of the gender pay gap in order to guide action to address it.

But, Cooper warns that the national gender pay gap, as currently calculated by WGEA based on Australian Bureau of Statistics data, is “messy”, and it isn’t giving us an accurate reflection of the full extent of the pandemic’s damage on women’s earnings.

That’s a problem, she says.

The national gender pay gap only includes full-time working women. It doesn’t include women who are not working full time, or those who’ve been pushed out of full-time employment as a direct result of COVID-19.

“The national gender pay gap, as it’s currently measured, is absolutely the best-case scenario,” says Cooper.

“We urgently need to get a handle on what’s really going on … we need to recognise that women’s pay has been absolutely smashed by COVID-19 in terms of much larger job losses and fewer paid hours than men.”

Cooper believes that we need a dashboard of measures that reflect the different ways women engage in the labour market, including part-time and casual work. And that more metrics are a necessary first step to “managing” the impacts of the pandemic on women and it’s knock-on impact on the gender pay gap.

The first few months don’t tell “the whole story”

While Hill understands the temptation to sort the impacts of recent economic downturns into the “tidy dualism” of winners and losers — a pandemic fuelled “she-cession” versus a GFC-fuelled “man-cession” — she prefers to take the longer view.

Contrary to the idea that the GFC was a “man-cession”, Hill believes that over the longer term all economic downturns, including the GFC, have negatively impacted women. We need to remember that, she warns.

“It’s dangerous if we look at what goes on in the first few months of a crisis and think that’s the whole story,” she says.

“Recessions play out over a long period of time.”

With the GFC, yes male-dominated industries certainly took the first hit. But women did not do well over the longer term. Hill points to an international meta-analysis of the gender impact of the financial crisis that shows, on average, the deep negative impacts on women are most felt at the three-year mark after the end of a crisis and are still present at the seven-year mark.

With that in mind, the current crisis is different from the GFC in the sense that it is negatively impacting women immediately, while it’s also likely to impact them over the longer term.

In short, it’s a double whammy that could see the pandemic have an even greater impact on women’s economic security than previous crises, such as the GFC, which, as Lyons pointed out earlier this month, was considerable.

Hill cautions policymakers to take that longer view and keep their eyes on the prize, now and over the course of the next few years.

Softening the blow

Everyone Women’s Agenda spoke with about the risks of a backwards slide in the gender pay gap, and an associated devastating long-term impact on women’s economic security, agree the government’s initial efforts to mitigate those risks have not inspired confidence, particularly the focus on “shovel” ready stimulus for male-dominated industries like construction.

But, they are cautiously optimistic that there’s still time to get this right.

“We just have to look at what’s happened in the past, learn from that and start thinking more strategically about the things that we invest in as part of the recovery,” Lyons tells Women’s Agenda.

“Yes, we haven’t approached this with a ‘gender lens’ so far, and we absolutely, desperately need to,” says Cooper.

“But we can turn this around in women’s favour, if we stop pretending that women aren’t the victims in this pandemic.”

Pointing to the short-lived experiment with “free” childcare, Cooper says: “What the pandemic has shown us is that government, even the ones you least expect, can act to address these issues.”

“This is, unfortunately, going to last a really long time. So, there’s lots of opportunity for the government to get this right, even if they stumbled in the first instance,” says Hill.

“We’ve just got to keep advocating. It’s never too late.”

What would these experts put at the top of their wish list?

“The thing that would have the biggest bang for the buck is to properly value women’s work,” says Cooper.

“Because the majority of Australian women work in feminised work, if you make changes that better value women’s work, including financially, you will significantly close the gender pay gap.

“Secondly, fix the mess that is childcare. We have to make it accessible, affordable and high quality.

“And thirdly, do something about the supply of high-quality, flexible jobs, so that a flexible job is not a per hour job with no career path and something that is off to the side of the ‘real jobs’.

“Doing those three things together will reap an enormous benefit in closing the gender pay gap,” Cooper adds.

Lyons concurs that childcare and flexibility are vitally important, including equal access to flexible work and parental leave for fathers as well as mothers.

“One of the critical issues that is holding our country back — and that will continue to hold it back — is gender inequality,” she says. “And we know that the biggest barrier to gender equality is the cost, availability and quality of early education and care.”

When asked if we have reached the limits of the so-called “business case” for gender equality, as in the number of employers who can be persuaded to take action to close the gender pay gap because it is either the “right” thing to do or “good for business”, Lyons disagrees, believing there is more mileage in that argument, particularly to mitigate the risk of a backwards slide in these pandemic times.

She points to new research released by WGEA which for the first time established a causal link between better gender equality and business performance.

“If I knew I could add 5 per cent of profitability to my organisation over a period of a year by improving female leadership, why wouldn’t I do it?” asks Lyons. “It’s an easy way to step ahead of your rivals.”

Why indeed? That’s an interesting question.

Will we hold ground, lose ground, or ‘build back better’ with gender equality, and equal pay, at the heart of the recovery?

This Equal Pay Day, many women are hoping for a clearer indication that the government and employers intend to pursue the latter.

One thing is certain: this year, they will have little patience for spin or faux celebration, only vigilance and action.

This article was first published by Women’s Agenda and is part four of a series by Kristine Ziwica on how COVID-19 is impacting women in Australia. 

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