Australia 2016: Gender pay gap begins in childhood, pay-secrecy widens the gap in the workplace
Melbourne ~ Tuesday March 8, 2016
Girls get less pocket moneyBy Caitlin Fitzsimmons /Money Editor
The gender pay gap starts in childhood.
Boys get more pocket money, even though 10 and 11-year-old girls do more housework than their brothers.
When I was at my children's school this week, a little girl in my son's kindergarten class started chatting to me.
She told me proudly that she had $2 in her pocket and was planning to buy a fruit jelly cup at the canteen.
Our family hasn't started pocket money yet. The currency at our house is Woolworths animal cards, but I suspect we'll graduate to gold coins before long.
About age five or six seems to be typical for starting a regular allowance, though some parents even give pocket money to toddlers.
By late primary school, two out of three Australian children get pocket money, according to the CensusAtSchool study by Australian Bureau of Statistics (ABS).
Research by Australian Institute of Family Studies (AIFS) suggests that regular pocket money helps develop financial literacy. Parents also have to track what their children spend it on, and model good behaviour by being responsible with their own finances.
There are different schools of thought on whether to link pocket money to chores. Of course, it's good to teach children that money is something you earn, but children should also do chores simply to be helpful members of a household.
Whatever you decide, it seems that pocket money can be a force for good. The idea is that if children have to budget income and expenditure and save for financial goals, it teaches better life lessons than simply giving them money when they need it, or want it.
This isn't about how much Lego your kids can buy, it's about their future solvency.
Which is why I found it deeply disturbing to discover there's a gender pocket money gap in Australia.
Boys earn $13 a week in pocket money on average, while girls get $9.60, according to a survey done for the Heritage Bank and released in time for International Women's Day this week. The bank made similar findings in 2014.
That's a whopping 35 per cent more dosh for boys – worse even than the 17.9 per cent pay gap for grown-ups identified by the Workplace Gender Equality Agency.
The survey didn't probe the reasons, though it revealed 29 per cent of kids have to complete chores before they get paid.
Perhaps families are dividing housework along gender lines and boys are doing chores with more perceived value. Is washing the car worth more than cleaning the bathroom?
Or perhaps there is a greater expectation that girls will help with the housework without being paid for it. The AIFS has found 10 and 11-year-old girls do more housework than boys.
Or maybe boys just drive a harder bargain, helping them develop the negotiation skills that see them strike better salary deals from graduate level right through to the c-suite.
Whatever the reason, we're selling our girls short.
I don't believe it's a coincidence that young women are so freaked out about money. The annual survey of wellbeing by the National Australia Bank found women under 30 suffer higher levels of anxiety than everyone else, mainly because of financial worries.
In our country, men hold the economic power, dominating lists such as the BRW Rich 200 and Young Rich. Meanwhile, women are more likely to live in poverty, ABS figures show.
Women earn less on average even for full-time work, are less likely to invest the money they do earn, and reach old age with vastly different retirement savings. Women aged 55-64 have just over $180,000 saved in super on average, compared with nearly $322,000 for men, ABS figures show. Yet women over the age of 50 are much more likely to live alone, according to the AIFS.
Given the economic inequality of men and women, parents need to work harder to ensure their daughters have the financial skills they need for life. Pocket money is just the start.
At least I know the pocket money gap won't happen in our house – we have boy-girl twins, which makes questions of fairness and gendered expectations much more obvious.
Melbourne ~ Tuesday March 8, 2016
Pay secrecy lets employers get away with paying women lessMichelle Brown and Leanne Griffin
Forcing workers to stay quiet about pay keeps women’s wage rates lower than those of men in equivalent jobs
Illustration: Andrew Dyson
It's International Women's Day and again we lament the pay gap between men and women. In Australia, the gender pay gap stands at 18.2 per cent. In other words, women must work an extra 66 days each year to earn the same amount as men. Disturbingly, the gender pay gap is getting worse. Back in 2004, it was 14.9 percent. What's going on?
Occupational choice, part-time employment, and underrepresentation in management are regularly rolled out to explain why women are paid less. An often overlooked cause is pay secrecy.
Pay secrecy is the practice of prohibiting employees from sharing pay information. In Australia, more than half of all employers enforce pay secrecy policies. The Workplace Gender Equality Agency analysis shows the pay gap is largest when pay is secret, in an individual agreement (20.6 per cent) and almost non-existent when pay is transparent via an award (-2.5 per cent). In between awards and individual agreements are collective agreements. Under a collective agreement the gender pay gap is 16.9 per cent.
The gender pay gap is wider than ever. (Jim Pavlidis)
Employers use pay secrecy to compartmentalise pay intelligence: each employee knows what he or she is paid, but not what anyone else in their workplace is paid. Through pay secrecy, employers control pay information and keep employees in the dark.
Pay secrecy allows conscious or unconscious bias and stereotyping when making pay allocation decisions. This means managers are free to apply criteria that disadvantage women, such as using lack of "face time" (that is, arguing men spend more time in the workplace than women), or "perceived similarity" (that is, with most managers being male, they rate other men as having greater value to their organisation than women).
Unequal access to information makes it difficult for women to detect when they are underpaid. Take the famous case of Lilly Ledbetter in the US. For 20 years, Ledbetter was the only female supervisor among 16 male supervisors for Goodyear Tire in Alabama. She earned less than all her male colleagues, including those with less seniority, yet she did not know that she was underpaid because her workplace prohibited employees from discussing their pay. It was only after she received an anonymous note that revealed the earnings of her male colleagues that she realised she was underpaid.
Unfortunately, Ledbetter's case is not unique. Ask most women and they will recount stories of gender pay discrimination. Without relative pay information, women such as Ledbetter cannot identify and challenge illegal practices such as pay discrimination or seek better pay elsewhere.
Pay secrecy also places women in a precarious position whenever they do suspect pay discrimination. They are hamstrung: they cannot present evidence of discrimination to their employer without revealing that they have also breached pay secrecy policy. In Australia, penalties for employees caught breaching these policies range from informal warnings to dismissal.
Unfortunately, it is not simply a case of women negotiating their way to fairer pay. Under pay secrecy, employers control pay information and with it, enjoy an imbalance of power. Without pay data, women occupy a weak bargaining position. They must rely on other negotiating tactics. But pay negotiations can be a minefield for women. Effective negotiating tactics such as self-promotion (widely used by men) are shown to backfire for women.
Women are socialised not to negotiate – they assume they will be recognised and rewarded for good performance. Managers, believing that women will accept less than men, typically make lower opening offers to women.
Pay decisions go unchecked as organisations do not need to justify their decisions. Decision-making quality and ethical behaviour deteriorates when transparency is low. In the absence of accountability, the incentive to correct existing pay inequity also diminishes. Certainly, our research indicates many organisations are aware of pay inequities but lack the urgency to correct them.
So, how do we combat the effects of pay secrecy? Abolish pay secrecy and give employees control over their own pay information. Unless we make employers accountable, we cannot expect gender pay equality to improve. If history is a judge, we cannot rely on employers to self-regulate pay parity.
The law changes behaviour. Right now legislation is before the Senate aimed at ending pay secrecy. It safeguards employees' right to share pay information and prevents employers from punishing those who do.
The legislation marks an important step towards improving gender pay parity. If passed, women will be able to use pay data to negotiate better pay outcomes. Employers will also become more accountable as they relinquish control of the flow of pay information. Greater pay transparency provides the best hope for reducing gender pay inequality driven by bias, discrimination and nepotism.
Opponents of the bill argue that pay secrecy promotes workplace harmony and provides organisations with greater wage flexibility. They forget that performance-based pay is already well established in Australia. It is widely understood that individuals are rewarded differently for good and bad performance. Increasing pay transparency should only enhance organisational productivity, since pay secrecy blocks pay signals that stimulate job performance.
The tide is turning on pay secrecy. Governments in Britain and the United States have recognised the link between pay secrecy and gender pay inequity. Both countries have already legislated against this practice. Pay secrecy laws do make a difference.
Eleven states in the US have legal provisions covering pay secrecy. According to Marlene Kim at the University of Massachusetts, compared women's pay in states that prohibit pay secrecy compared with those that do not. She found that women's wages are higher (between 4 and 12 per cent depending on how the data was analysed) in those states with pay secrecy laws compared to the non-pay secrecy law states.
Pay parity is urgently needed. We all stand to gain. The traditional notion of the male bread winner is folklore as more women return to the workforce or never leave it. All Australians would benefit from earning "a fair day's pay for a fair day's work".
Professor Michelle Brown and Leanne Griffin are researching pay secrecy at the University of Melbourne.
Melbourne ~ Tuesday March 8, 2016
ACT has second lowest gender pay gap but it's still unacceptable, advocates sayBy Clare Sibthorpe /Canberra Times reporter
Equality advocates are calling on less talk and more action to reduce the gender pay gap in the ACT and the Australian workforce.
International Women's Day on Tuesday reignited a national discussion over gender inequality. And when it comes to equal wages, Canberra is doing significantly better than the rest of the country – except for South Australia.
The latest Australian Bureau of Statistics figures showed full-time average earnings for ACT men were 11.5 per cent greater than those of full-time working women as of November. The national pay gap was at 17.3 per cent, which equates to a full-time average earning difference of $277.70 a week.
The ACT's gap remained stagnant from the previous year. But during the recent period of November 2014-15, SA overtook the ACT with the lowest gender pay gap, most recently 10.3 per cent.
The figures seem to reflect the large proportion of the city's workforce in the ACT public service, which revealed a gender pay gap of 2 per cent in its last State of the Service Report.
Australian of the Year David Morrison said the public service had paid close attention to pay equality, but said a gender imbalance in both the public and private sector was high.
"You would expect a gender pay gap to be illustrative of that bias towards men holding more positions than women," he said.
"It would seem that across various workplaces, there is a much more significant issue around women just simply being paid less for the same work their male peers are doing.
"And it's not just your fortnightly pay here, but with an average wage across an average lifetime, the difference between superannuation between a man and a woman can be as much as $700,000."
He said two urgent solutions were "relatively simply": Put measures in place that ensure all employees are paid equally for the same work, and improve financial security for women to ensure a manageable work/life balance.
This entrenched gender bias was highlighted by the Workplace Gender Equality Agency, which found that among top tier managers in Australian organisations, men are paid on average $100,000 more a year than women. It also found a $27,000 difference between what male and female employees earn in an average year.
The director of the Workplace Gender Equality Agency, Libby Lyons, is calling for a gender pay gap analysis in every organisation.
"Once they have determined what their gender pay gap is, then they need to really work on developing an action plan to systematically address that pay gap," she said.
Ms Lyons stressed that having biases "doesn't make you a bad person, it just means you're normal" and they can be minimised by consciously noting them when recruiting, promoting and giving bonuses.
Interestingly, research released this week by Australian Council of Trade Unions found that the gender pay gap begins early in life.
They claim that girls receive 11 per cent less pocket money than boys, and female graduates earn 5 per cent less than male graduates – despite females making up 60 per cent of graduates in Australia.
The gap widens with experience, as female post-graduate salaries are 82 per cent of male graduates.
While the ACT's gender wage gap is low when compared nationally, Canberra Business Chamber chief executive officer Robyn Hendry believes 11 per cent is still unacceptable.
"Our numbers have stagnated, so that suggests that we've picked some of the low hanging fruit and done the obvious things such as recruiting from a range of backgrounds, and females are a part of that," she said.
"But then we are so used to discounting – maybe completely subconsciously – that pay negotiation area."
Like Ms Lyons, Ms Hendry agreed tackling cultural attitudes and inbuilt language is crucial for change.