How can the gender pay gap be closed?

Progress on levelling pay disparities has been painfully slow.

Debate about the gender pay gap just will not go away.

The issue first hit the headlines in the 1960s, so it is telling that the Organisation for Economic Co-operation and Development (OECD) reports that women in rich nations, on average, still earn 18 per cent less than men. The gap is widest in South Korea and Japan, where men earn well over 30 per cent more than their female counterparts, and smallest in Belgium and New Zealand, both of which have wage gaps of less than 10 per cent.
 
Given that more women are gaining university degrees and entering the workforce, why does this discrepancy still exist? Is it because women are more attracted to part-time work and care-related roles that often pay lower wages? Is there blatant discrimination against women, and could quotas help them better participate in the workforce on equal terms with men?

Australia is one of many countries grappling with the conundrum and this year will finalise the Australian Standard on Gender-Inclusive Job Evaluation and Grading, a guideline that seeks to help progressive employers make the workplace fairer in terms of remuneration. The jury is out on whether such a prescriptive approach can achieve change. INTHEBLACK canvasses the views of three experts on this contentious issue.

Philippa Hall, Pay Equity Consultant, EOWA  | Photo: Robert Billington

Philippa Hall

Pay equity consultant, Equal Opportunity for Women in the Workplace Agency
 
Philippa Hall believes efforts to close the gender pay gap need to target boom sectors such as resources and finance. While women are making headway in professional and paraprofessional jobs, they are still poor cousins when it comes to high-paying sectors such as mining and banking.
 
“A lot of the growth in such industries has favoured the gender pay gap, not improved it,” Hall says.
 
It is clear Australia is treading water on the issue, says Hall, who cites Equal Opportunity for Women in the Workplace Agency (EOWA) figures showing the situation has improved only modestly in almost three decades, from a wage gap of 18.5 per cent in 1984 to 17.2 per cent last year.
 
Of particular concern is that this is in a period when there have been improvements to the factors long blamed for pay imbalances.
 
“Women’s levels of education and length of time in the paid workforce have improved greatly,” Hall says. “Social attitudes about women and work have changed. Yet the gender pay gap has stayed fairly much the same.”
 
According to Hall, one factor that has counted against change is the absence of major legal victories on equal pay under the Fair Work Act 2009 and earlier legislation in recent decades. That changed in January this year when, in a landmark decision, almost 150,000 community sector workers, mostly women, were awarded pay rises ranging from 19 per cent to 41 per cent by the industrial umpire.
 
To ensure further progress, Hall believes other factors must be addressed, such as collaboration between industry groups, government, employers and unions and a greater focus by employers on equal pay.
 
Importantly, she says that the under‑representation of women in the ranks of senior management must be tackled.
 
Hall encourages organisations to use EOWA’s suite of website resources and practical information that relate to pay equity issues, including an online gender pay equity course, Mind the Gap.
 
It is also important for the media to continue to put the spotlight on the issue, she says.
 
Along with Standards Australia, EOWA has played a key role in drafting the new Australian Standard, Gender- Inclusive Job Evaluation and Grading, which will help employers ensure they are not inadvertently undervaluing workplace roles in which women are most prevalent – that is, where women hold more than 70 per cent of positions.
 
As the voluntary standard is based on results from court cases and considerable research, Hall says it will become an important tool for organisations to “run the rule over” their payment processes.
 
While such tools can guide employers, Hall says they have a moral responsibility to make fair and lawful offers to employees. Equal work deserves equal pay, she says.
 
Philippa Hall is a consultant at the Australian Government’s EOWA and a member of the University of New South Wales’ Industrial Relations Research Centre Advisory Committee. She contributed to the guidelines for the Australian Standard on Gender-Inclusive Job Evaluation and Grading.

Laurence Shatkin, Employment  researcher, JIST Publishing

Laurence Shatkin, Employment researcher, JIST Publishing

Laurence Shatkin

Employment researcher, JIST Publishing
jist.emcpublishingllc.com
 
The elephant in the room with the gender pay gap is still the “mummy track”, according to Laurence Shatkin, because women are typically the prime carers of children and their careers often must fit around their family. “That is going to cost their career,” Shatkin says.
 
The big question is what can be done about it. Shatkin believes some form of governance or even legislation may be required. “In the same way, perhaps, that we have laws in the US if somebody is called up to the National Guard,” he says.
 
“If that person has to take temporary leave from work, they supposedly should not have their career suffer. However, such a law may be difficult to enforce.”
 
Particularly concerning, Shatkin says, is that even women who do not have children are often discriminated against because of the perception that they will soon become mothers and require time off work or flexible working hours. The only true, long‑term fix for such entrenched bias is to break down the stereotypes about parenting roles and for men to assume more of the family nurturing duties.
 
“If men would only put as much importance on child-rearing as women do, then that could fix the problem,” he says. “But it would require a major cultural change in society for that to happen.”
 
Doubting that workplace quotas to force organisations to employ more women in senior roles will work, Shatkin hopes the ascension of more female executives to board and CEO roles will ultimately create greater understanding of, and a supportive environment for, working mothers.
 
Among the multiple ways in which the gender pay gap manifests itself, Shatkin believes the most pressing concern is when females perform work directly comparable to that of men in the same role and still receive less pay.
 
Women are also being relegated to important but lower paid roles on the basis of gender. Shatkin believes one of the solutions is for bosses to steer away from stereotypes about the tasks that best suit men and women, with the former often pushed into better-paid technical roles and the latter given “people” roles.
 
One way women can help themselves, he says, is to become better at negotiating their pay. “A lot of the time men say, ‘look, I think I deserve a raise’ or ‘I’m going to walk if I don’t get a raise’. The stereotype of women is that they don’t negotiate as aggressively as men and there may be some reality behind that.”
 
Rectifying such a situation may require coaching to help women become more self-advocating. “In the same way they may take karate classes to deal with physical violence, they could take classes where they learn to be more assertive about their career,” Shatkin says.
 
Laurence Shatkin is an author and researcher at JIST Publishing, a careers material publisher in the US. With 30 years’ experience in the field of career information, he formerly served as president of the Association of Computer-based Systems for Career Information and is a member of the National Career Development Association.
Ariane Hegewisch, Study director, Institute For Women's Policy Research

Ariane Hegewisch, Study director, Institute For Women's Policy

Research

Ariane Hegewisch

Study director, Institute for Women’s Policy Research
www.iwpr.org
 
Ariane Hegewisch says there is little doubt progress on narrowing gender pay gaps has stalled in the US. Since the passing of the Equal Pay Act in 1963, she notes there have been several cycles – little happened in the first two decades, then women’s pay caught up substantially to that of men in the 1980s before again plateauing.
 
“But, really, progress has been very slow in the past 15 years,” Hegewisch says.
 
Data from the Institute for Women’s Policy Research in Washington DC shows American women on average earn from 77 per cent to 82 per cent of men’s wages.
 
Women are now entering and graduating from college at higher rates than men, Hegewisch says, but for the pay imbalance to shift, serious attention will have to be given to challenging the occupational segregation of many jobs still being categorised as male or female positions. “Because female positions tend to be lower paid, men have much less incentive to become a childcare worker, for example,” she maintains.
 
Hegewisch supports initiatives such as the Australian Standard, Gender-Inclusive Job Evaluation and Grading as a way of helping employers break down discriminatory remuneration practices: “That is effective, but unfortunately [such a guideline] is completely off the agenda in the United States.”
 
This is despite the fact that US states which introduced public sector job evaluation schemes in the 1980s are today demonstrating better gender pay gap results than the private sector.
 
For women to claw their way towards pay parity, Hegewisch believes better childcare service options that make it financially viable for women to re-enter the workforce quickly after having a child are required. Second, more support networks are needed for women along with encouragement for men to embrace a greater share in child-rearing. And third, women should be encouraged to explore career options that deliver six-figure salaries rather than just defaulting to professions with relatively low remuneration.
 
Of concern is that resources booms in countries such as the US and Australia are exacerbating the male-female employment divide. Major mining projects tend to result in big overtime-earning opportunities for men, with few equivalent opportunities for women.
 
Hegewisch says such market forces underline the reality that there is no silver bullet solution to the gender pay gap. So what can be done?
 
“It is a mixture of having a proper infrastructure which allows men and women to care for their families and work, so that means child care,” she says. “It also means some kind of cap on hours. There also needs to be enforcement; you need to tell employers they have to look at how they pay men and women, particularly in the professional areas with performance-related pay.”
 
The worrying reality, based on the institute’s research, is that if the current slow rate of progress continues, it will take another 50 years for pay parity to be achieved in the US.
 
Ariane Hegewisch is responsible for the Institute for Women’s Policy Research’s studies on workplace discrimination and focuses on facilitating greater work-life reconciliation and gender equality. She has been a lecturer and senior researcher in human resource management at Cranfield University School of Management.
 
Key takeaways:
  • Women earn on average 18 per cent less than men in OECD countries.
  • Discrimination and women’s high engagement in part-time work are among the major causes of the gender pay gap.
  • Legislation and national employer standards are suggested solutions.
  • Women may have to become more forceful self-advocates when negotiating employment roles and remuneration.


July 2020
July 2020

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