More money, flexibility draw women to workforce

Women are leading gains in employment, with the number of women employed full-time jumping in 2023 as the level of women’s workforce participation hits record-high levels.

That has pushed growth in wages for women above that for men, helping to narrow the gender wage gap across Australia and the gender superannuation gap.

Jobs data released by the Australian Bureau of Statistics (ABS) this month reveal more women than ever before are working, with the participation rate of women in the workforce reaching record highs in May at 62.7 per cent. The female unemployment rate sat at 3.5 per cent, slightly lower than the male unemployment rate of 3.6 per cent. Total female employment rose to 6,684,400 from 6,658,100 in April.

Notably, the number of women employed full-time has jumped over the past year, with many females transitioning from part-time to full-time jobs; around 228,500 more women held full-time jobs in May 2023 than one year ago, according to the ABS data. Female full-time employment stood at 3,865,200 in May, a record number, and up from 3,846,000 in April. This is putting more money than ever before in women’s pockets, increasing their spending and economic power.

Female total average earnings rose at a rate of 4.7 per cent to $1,144.30 over the year to November 2022, compared to 2.8 per cent for men, according to the latest data on average wages from ABS. In contrast, average weekly total earnings for males grew by a much more modest 2.8 per cent to $1,618.70. The most commonly cited gender pay gap measure, the gap in average weekly ordinary time earnings, fell to its lowest level on record, down to 13.3 per cent, 0.6 percentage points below its pre-pandemic level of 13.9 per cent in November 2019, according to the ABS data.

Several factors are contributing to the large gain in the number of women employed. Rising wages, after several years of no growth, is helping to attract women to the workforce. The emergence of more flexible working arrangements in Australia has also helped to boost female workforce participation. Most workplaces now provide access to carers’ leave and permanent part-time employment, which women often need or favour, and more workplaces are providing paid maternity leave beyond minimum legislative requirements.

The Australian government’s approach to gender equality in the workplace has also helped, including legislative reforms that prioritise gender pay equity and approving significant wage increases for aged-care employees. So, more women than ever are entering the workforce.

That is great news for women’s earning capacity and for their retirement savings too. The tightness in the jobs market for women has seen female wages grow at a much greater rate than males in recent months. If that trend continues, that should help to close the savings gap in superannuation. Women in Australia earn $1 million less on average over their lifetimes than men and retire with $136,000 less in superannuation, according to research from the Australia Institute’s Centre for Future Work.

The biggest driver of the gap in retirement savings is still the gender pay gap, which the average wage data shows is still wide. Despite the gender pay gap narrowing slowly, based on data from the past decade, it would only be eradicated by the year 2053, when more than 60 per cent of the current workforce will be retired, according to the Australia Institute’s Centre for Future Work. Men have higher average salaries than women in 95 per cent of all occupations, and across age groups, including those where women dominate the workforce.

That means women still have much lower superannuation balances than men across age groups. However, the good news is that the gender wage gap is narrowing, and stronger jobs growth for women will help as they enter the workforce in greater numbers. That will help to build healthier superannuation balances for their retirement, which often lasts longer than a male’s due to women’s greater longevity.

By Kris Grant, chief executive, ASPL Group.