Why Women Get Paid Less Than Men

Today, people in the US are celebrating Equal Pay Day, which sounds warm and fuzzy and progressive in theory, but in reality is actually pretty shit.

Equal Pay Day is the number of extra days in the current year which women need to work to achieve the same wages that men earned in the previous year. The time it takes for women to catch up, if you like. So given it’s April 14th today, that’s three and a half months extra work.

And Australia’s not much better. Last year, our Equal Pay Day was on September 5, 66 days after the end of financial year.

According to the Australian Bureau of Statistics, our national gender pay gap is getting wider and wider, and currently sits at a record high of 18.8 per cent. That means men now earn almost $300 more per week than women, representing the biggest gender pay gap since the ABS began collecting the data in 1994.

At last reading, across all industries, the average weekly full-time earnings of men were $1,587.50, while women were about $298 worse off. The widest gap is in finance and insurance, with women today earning the same amount as their male colleagues were earning a decade ago.

The ongoing battle to reduce gap, while it soars the other way, is indicative of the broad, multi-faceted and complex problem that gender pay inequality represents. And it’s going to take a lot more than quotas to rectify it.

So why do women get paid less than men?

The obvious, and most cited answer is that  women generally take time off to have kids and spend a few years out of the workforce, while their male counterparts work day in, day out, getting the promotions, pay rises, super payments, training and career development along the way. And when women do return to work, it’s often in a part-time or casual capacity. But it’s not this simple.

Read More: 7 Reasons You Didn’t Get That Pay Rise 

Inflexible workplaces

A lot of the time, women don’t choose to work in casual roles, they’re there because there’s not much choice when it comes to finding a workplace that has a solid, formal part-time or job-sharing policy in place. Of course, some employers are better than others; the Workplace Gender Equality Agency announced 76 ’employers of choice’ in 2014, using criteria like entrenched flexible working arrangements, formal strategies and gender remuneration analysis.

This is a great start, but there are a lot more than 76 employers in Australia.

Men and women study different fields

There are more woman than men who hold Bachelor degrees, and more women than men enrolled at universities, so this argument can’t be about education.

The problem begins when we start working, right from the first graduate salary gap.

According to GradStats, in 2014, new male graduates earned a median salary of $55,000, while new female graduates started work on a median salary of $52,000. So before they even get started in the workforce, women are already behind.

And when it comes to industry biases, Australia has what’s called a ‘sex-segregated labour market’, which means traditionally ‘male’ industries are higher valued than ‘women’s work.’  It’s slowly changing, but these deeply entrenched societal stereotypes and gender biases can be pretty hard to crack.

Lack of women in senior positions

In good news, the number of women on ASX 200 boards is rising, and now sits at about 20 per cent. But there are plenty of companies with no women on their boards, and last year, only 18.8 per cent of the ASX 200 organisations that report to the Workplace Gender Equality Agency had set a target for their board (coincidentally the same percentage as the current gender pay gap).

The Australian Institute of Company Directors has set a target for 30 per cent of board seats to be filled by women by the end of 2018 and wants ASX 200 companies to voluntarily meet it, rather than face government mandates. While Europe has jumped at legally enforceable measures, it’s unclear whether compulsory quotas (which essentially go against the principle of merit) are the answer.

A combination of employer targets, offering flexibility at work, improving access to childcare, maternity leave options, training, mentoring and equal pay for equal work, and now we’re talking. Whatever the strategy is, without a clear one, it’s going to be difficult to get more women at the top of our male dominated executive ranks.

Lack of negotiation and self-promotion

Another factor contributing to the wage gap is salary negotiation (or lack thereof). According to the Fair Work Commission’s Australian Workplace Relations Study, almost 20 per cent of men have received a better wage through negotiation, compared to just 12 per cent of women.

One-third of women haven’t even attempted to attain a better salary at their current employer, compared to only one-fifth of men.

And it’s a global concern. This study of graduating MBA students found that half of the men had negotiated their job offers as compared to only one eighth of the women, while this survey of graduating professional students found that only seven per cent of women attempted to negotiate their initial offers, while fifty-seven per cent of the men did so.

Ellen Pao, CEO of news blogging site Reddit recently announced the company will no longer allow new staff to negotiate their salaries. In explaining her decision, she said the company will simply come up with an offer they think is fair and aren’t going to reward people who are better negotiators. Perhaps this more proactive approach by the private sector is what’s required.

Whatever the solution, the real problem is that it exists at all.


 Main pic: Unsplash