Closing the gender pay gap: only 80 years to go

Tuesday, November 17, 2015 - 15:51

By Kirsten Lees

If you were born today, you would be 80-years-old before the gender pay gap is closed and women and men earn the same money for doing the same work.

That’s a whole career away, even for people not born yet.

The numbers differ depending on who is counting, and what they include when they compare pay rates, but whichever way you do the maths, men are clearly being paid more than women.

The Australian Institute of Management’s recently updated Gender Pay Gap Report (October 2015) highlights an average of 8% difference in pay between the sexes, across job roles and industries.

The good news is that the figure is down from 9.4% over four years since 2011, the less good news is that in some areas including ‘other management’; (the level below executive) the pay gap is as large as 10.7%.

Is there an upside?

If, to balance the pay shortfall, women could take off the chunk of the year that they are effectively not being paid for – from around the second week of November – the gender pay gap could have an upside.

Unfortunately, that’s not how it works.

There isnt an upside

There is clear evidence that women’s financial situation has considerable social and economic impacts in Australia, and around the world.

An 8% pay difference first hits women in the weekly pay packet. But it doesn’t stop there. It’s amplified with every pay rise, every incentive bonus, every employer superannuation contribution that is calculated as a percentage of base salary.

Even discretionary performance bonuses are not immune. A recent Mercer study of 60,000 bonuses paid on how effectively employees are judged to have performed through the year, found that women received on average 35% less than their male colleagues. That’s 35% less, when the woman’s performance was judged as effective or even more effective  than the men on the team. And it’s a gap that increases as salaries rise and women progress through their careers, according to Mercer.

It starts young

In 2013 a Westpac commissioned national survey Westpac Kids and Money Report, found that on average pocket money is more than 6% higher for boys - and they do 30% fewer household chores.

Its hurting business

Staff turnover means recruitment costs, loss of company knowledge, instability in the company culture and a reduction in overall productivity. People dissatisfied with their pay (and it’s clear many women have grounds to be disatisfied) are more likely to leave. Sixty-five percent of people who say they are likely to leave their jobs cite disatisfaction with pay, according to

The gender pay gap is also a contributing disincentive to the speed with which many women return to work or whether they return to work at all after a career break. Since women are 58% of university graduates, it’s a huge resource to undervalue and shrinks the pool of talent and expertise available to business.

It’s also a business risk. A survey of 400 Human Resource managers by Eversheds in the UK, found that a quarter were worried about equal pay litigation following a government policy introduced this month to force employers to disclose the pay difference between male and female staff.

Its a global issue

The World Economic Forum’s gender gap report places Australia 24th in global rankings on pay equity. At current rates of progress, they calculate, a child born today would wait until they were 80 years old to see the gender pay gap closed.

AIM Gender Pay Gap Report

AIM publishes a report on the gender pay gap each year, derived from the the National Salary Survey.