Stories in yesterday's and today's Age raise interesting issues about the gender wage gap, what causes it, and, interestingly, the impact of transparency of wages and wages gaps.
Research by the Institute for Women's Policy Research in the US led them to suggest "while there is no direct link between pay secrecy and wage discrimination, there is some evidence that pay transparency reduces the gender pay gap." This is good news, as many organisations now seek to redress pay inequities. Transparency is a step in the right direction.
However, the article then goes on to claim that transparency of pay sets up a competitive environment, that leads to an overall reduction in job satisfaction levels. The article cites further US research, from the University of California, that shows that for those who earn above median pay there's no impact while for those who earn below median pay levels, job satisfaction decreases. This is an interesting conundrum, and we await further research to tell us whether achieving parity in pay between the genders does have such a downside. The article suggests that the positives and negatives balance each other out - this might be a zero sum gain from their perspective, but as one plank in increasing gender balance at senior levels in organisations, an important step in the right direction.
The article then goes on to provide an Australian research perspective, from the National Institute of Labour Studies, claiming that the main cause of the gender pay gap in Australia was "the simple fact that men continued to occupy higher-paying positions." However, research at NATSEM, University of Canberra shows through comprehensive economic modelling, that discrimination is a significant factor in the gender wage gap.
Women overall in Australia earn 18% less than male peers in similar positions. At middle management, the disparity increases to 25% less and amongst high performers at the most senior levels, women earn only 58% of what comparable top males earn (Australian Women's Leadership Census), indicating a significant disparity when like is compared with like. US female CEOs earn 67% of male CEOs and female CFOs earn 49% of their male counterparts. Over a working lifetime it is estimated that a woman working the same job for the same time will earn $1million less than a man (Anne Summers 2009).
Detailed analysis of the gender wage gap in Australia has demonstrated that discrimination plays a significant role. Financial modelling demonstrates that firm size (a higher proportion of women work in smaller firms) accounts for 3%, vocational qualifications (women have fewer) accounts for 5%, time in the workforce and tenure (women have lower) accounts for 7% and industry segregation (predominately male occupations pay more than predominately female) accounts for 25% of the differential between male and female remuneration. At 60%, by far the largest contributor to the differential is simply being a woman (Cassells 2010).
Women comprise 13% of top earners when there are two or more women on the board, and appear among the top corporate earners where this is the case. This shift in overall remuneration profile highlights the impact of bias and reinforces the importance of fair organisational remuneration practices that are monitored and reported, and then actively managed.
A second article published today outlines ACCI's opposition to Fair Work Australia's interim decision to grant pay rises to non-government community sector workers: part of the reason for the rise was their claim that gender was an important reason for the low pay. When ACCI claims that it's not possible "to determine the extent of gender-based under-evaluation" they may be technically right, but NATSEM's research findings would suggest that there are significant gender biases affecting women's pay. ACCI's opposition to the wage rise doesn't help gender wage equity.
To check out the articles: http://www.theage.com.au/national/pay-disparity--ignorance-is-bliss..., http://www.theage.com.au/national/chamber-opposes-lowpaid-rise-2011.... To find out more about NATSEM's work on the gender wage gap, go to http://www.canberra.edu.au/centres/natsem/publications?sq_content_s...
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