Gender pay gap set to take 25 years to close

The gender pay gap in Australia is costing the economy an estimated $1.26 billion a week in lost earnings, according to a new KPMG report.

KPMG Australia has revealed the gender pay gap is killing the Australian economy with the exorbitant cost of $1.26 million in equivalent earnings per week.

The recent edition of the She’s Price(d)less report from the big four firm in association with the Diversity Council Australia (DCA) and the Workplace Gender Equality Agency (WGEA) found it could take up to 25 years to close the gender pay gap if current trends continued.

The report analysed HILDA data and identified the key drivers of the gender pay gap, such as unequal distribution of hours spent on care, family and workforce participation and workforce gender segregation.

According to the results, Australian women earned an average of $42.26 an hour, while men earned $45.57, representing an hourly pay gap of 7.3 per cent, which has increased from 6.5 per cent in 2020.

Dorothy Hisgrove, head of people at KPMG, said the report outlined that committed action was needed for Australia’s gender pay gap to close before 2054.

“KPMG’s report is unique because it looks beyond the numbers to identify underlying factors driving inequality between women and men at work,” she said.

“This information is crucial to accelerate change by enabling more meaningful decision making by employers and policymakers. The gender pay gap in this country remains persistent and persuasive, with the types of jobs women were employed in and the higher proportion of unpaid hours spent on household and caring responsibilities, the main contributing factors.”

It was noted that the report did not capture the impact of recent and welcome government reforms to put gender pay gaps for individual employers on the public record, yet insights on these changes were expected to be soon identifiable.

According to the report, as women’s level of responsibility in the workforce had increased, so did the gender pay gap at the lower income levels.

The analysis found that lower rates of pay in the occupations and industries where women were more likely to be employed accounted for 37 per cent of the gender pay gap, while gendered assumptions like parental leave were also a significant factor and accounted for 26 per cent.

DCA chief executive Catherine Hunter said the findings illustrated stark disparities in economic outcomes and paved the way towards understanding how closing the gender pay gap for all women would require recognition and response to inequality.

“For culturally and racially marginalised women in particular, the barriers they face in the workplace are not shaped by gender alone. They are compounded and layered in ways that traditional frameworks have often failed to capture,” she said.

“This necessary work is not just up to policymakers or advocacy groups – it’s a responsibility that belongs to every employer across every sector.”

In terms of discrimination, the report found this was part of the remaining 55 per cent of the gender pay gap, along with other additional gender influences that are hard to control statistically.

The HILDA data analysis also highlighted that Australian women were more likely to be employed on a casual basis or to be working reduced weekly hours.

Forty-eight per cent of all employed people nationally were women, who also represented 66.5 per cent of the part-time workforce and 39.8 per cent of the full-time workforce.

These findings sent a message about the need to accelerate progress to close the gender pay gap, WGEA CEO Mary Wooldridge said.

“Employers have an opportunity to drive productivity and meet employees’ expectations of a fair, safe and equal workplace by examining their own workforce data, finding areas of inequality, and taking evidence-informed action to address them,” Wooldridge said.

“We know what works to improve fairness at work. Taking action to make that a reality can unlock significant economic growth for our nation, foster innovation and ensure we value all people at work.”