The issue with the common gender pay gap rebuttal

Debates around the gender pay gap can get quite contentious, and it is a passion-filled topic. However, a common rebuttal from those who are sceptical may have been nullified.

Australia’s gender pay gap currently sits at 15 per cent. A conversation has been sparked after the Workplace Gender Equality Agency (WGEA) recently released the first batch of gender pay gap data for private sector employers with 100 or more employees, revealing scathing data.

The key finding from recent e61 research is that women working in lower-paying sectors than men cannot sufficiently explain the gender pay gap.

e61’s new analysis of tax data shows that while men and women are often segregated by occupation, this factor alone actually only accounts for 20 per cent of the gender pay gap. Instead, 80 per cent of the gender pay gap is due to women being paid less than men within the same occupation.

For example, among high-paying occupations such as doctors, dentists and investment managers, women are paid between 10 and 14 per cent less than men, which reinforces the gender pay gap theory.

The report finds that different characteristics and skills, such as job tenure, full-time status and education level, do not explain why women work in different occupations or why they are paid less when working in the same occupation than men. It does, however, highlight that marriage and parenthood have a greater effect on women’s wages than men’s within the same occupation.

Silvia Griselda, research manager at e61 Institute, said: “This research busts the outdated myth that the gender pay gap exists because more women are nurses, carers and administrators and while more men are lawyers, bankers, and pilots.”

“What the data shows is that most of the gender pay gap is because women are paid less than men within the same occupation. Policies and action, by companies and governments, to increase female representation in high-paying occupations are very important but unlikely to significantly narrow the gender wage gap on their own.”

From this research, Griselda pushes back on those claims, showing the insignificant aspect that those very claims bear on the gender pay gap.

“Australians frequently hear claims that the gender pay gap is driven by women not working full-time or not staying with employers for the same periods of time. Our analysis of the data shows these factors are actually quite insignificant,” she said.

“When we compare men and women with similar age, employment and marital status, number of children and academic ability, working in the same occupation, women have an hourly wage that is 15 per cent less than men’s.”

Elyse Dwyer, research economist at e61, believes that the analysis provides an indication of how companies can counteract this gender pay gap phenomenon that is rampant across Australian businesses. As the WGEA gender pay gap will continue to be released, companies, more than ever, will be held accountable; therefore, they need to seek ways to change it.

“One potential reason for the pay gap for men and women working in the same occupation is the type of firms that men and women are working for. Men may be more likely to work in high-paying firms, which require less flexibility and longer working hours. e61 Institute is currently undertaking research to understand this,” Dwyer said.

“Another potential reason is that women may be less able to pursue leadership opportunities or high-paying but demanding specialties within the same occupation. Our research suggests that the most effective way for companies to narrow the gender pay gap is to foster an inclusive environment where all employees, regardless of gender, are encouraged to take on domestic and parental responsibilities.”

Simplistic strategies won’t be enough to turn it around. Businesses must commit to legitimate plans of action that will see the reduction of that gap.

“Simply focusing on encouraging women into higher-paying occupations, such as pilots or lawyers, will not be enough to end the pay gap. The bulk of the gains will more likely come from improved workplace flexibility that allows more women to take on higher-paying positions,” Dwyer said.