Work & Family

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Why is there a gap between men's and women's earnings?

Introduction

The gap between women's and men's earnings reflects a number of distinct, yet complex and interrelated, factors. These factors may be usefully divided into two categories:

1. equal pay factors
2. equal opportunity factors.

Equal pay factors which contribute to the earnings gap

The undervaluation of women's skills

The undervaluation of women's skills reflects a range of social, historical and industrial factors. Prejudices regarding women as employees and the nature of their skills have interfered with objective assessment of women's work. For example, women's skills are often viewed as `natural attributes' or social skills, rather than industrial or workplace skills. In addition, the work value criteria used by industrial tribunals in some cases have tended to value features which are characteristic of work performed predominantly by men.

Women's lower share of discretionary payments

Women workers receive a significantly lower level of discretionary payments, particularly over award and bonus payments, than do men. Such payments may also include profit sharing, service increments and commissions.

Women tend to be concentrated in jobs with less access to a range of over award payments and bonuses and in industries where over award payments are not traditionally offered. Further, some awards contain discriminatory provisions which, for example, limit overtime and shiftwork by women or provide separate wage rates for male and female employees.

Equal opportunity factors which may have a detrimental effect on women's wages relative to those of men

Occupational and industrial segregation

The reasons for women's concentration in particular occupations and industries include societal expectations regarding the role of women, and in some cases, legislative restrictions on the employment of women in certain areas.

Access to education and training

The lack of formal recognition of women's skills (which are often developed outside of the formal education and training system), and the concentration of women in traditional areas of training, contribute to the undervaluation of women's skills.

The impact of family responsibilities

Working women generally carry a greater share of the responsibility for caring for family members than working men. These women may have their earnings affected because they:

• may not be able to work fulltime, take on extra responsibilities, access training and career development opportunities or work in jobs where flexible working arrangements are not available
• may have broken employment patterns due to career breaks taken to care for children or other family members, which are likely to have a negative impact on career progression
• may be subject to employers' negative perceptions about the effect of family responsibilities on work performance, attitude and loyalty to the organisation, which in turn may affect remuneration and promotional prospects.

Women's concentration in part time and casual employment

The availability of part time work is advantageous to many women and men with family responsibilities. Despite this, women's concentration in part time and casual employment has a number of pay equity implications, including:

• lower access to training and more limited opportunities for advancement and career development than full time employees. This may be due in part to the view of some employers that part-time and casual employees have little dedication to the organisation and their careers
• lower levels of unionisation and participation in union structures than full time employees
• in the case of casual employment, no permanency of employment and few employment benefits.

Deregulation of the labour market

A further factor affecting pay equity for women is the deregulation of the labour market. Australia's centralised wage fixing system has often been credited with Australia's relatively good performance in closing the gender earnings gap, compared to countries with more decentralised systems. This trend towards greater decentralisation of Australia's industrial relations systems may disadvantage women.

Factors such as women's low levels of unionisation and representation in union structures and the concentration of women's employment in service industries (where productivity increases may be hard to identify and measure), may be potential problems for women in a system based on bargaining at the enterprise level. Research shows that women tend to have less access to enterprise agreements and receive lower wage increases through agreements than men.

References

Department of Industrial Relations, Enterprise Bargaining in Australia Developments Under the Industrial Relations Reform Act, AGPS, Canberra, 1995.

MacDermott, K., "Women's Productivity: Productivity Bargaining and Service Workers", Journal of Industrial Relations, December 1993.

Department of Industrial Relations, Enterprise Bargaining in Australia Developments Under the Industrial Relations Reform Act, AGPS, Canberra, 1995.

NSW Pay Equity Taskforce, A Woman's Worth: Pay Equity and the Undervaluation of Women's Skills, Issues Paper, August 1996.