Gender pay

Gender pay gap not so insidious

• Michael Stutchbury, Economics editor
• From: The Australian
• March 15, 2011 12:00AM

THE push for boardroom gender quotas is starting to look like a vested interest group seeking government favour.

Labor chose last week's 100th anniversary of International Women's Day to ramp up the threats against businesses that don't "actively pursue gender equality in the workplace". It even attracted political support from Governor-General Quentin Bryce for female quotas on corporate boards.

Minister for the Status of Women Kate Ellis blamed business for the "insidious structural and cultural barriers" facing women. She announced "regular spot checks" by a beefed-up Equal Opportunity for Women in the Workplace Agency to keep all businesses with more than 100 employees "honest".

Government would refuse to do business with companies that failed the gender equity test. "No more good intentions," Ellis said. "We want good outcomes."

Ellis started to lurch into heavy-handed regulation rather than just naming and shaming, paid parental leave, mentoring programs for female executives or even allowing them to import their own nannies. There was none of the rigorous scrutiny that Productivity Chairman Gary Banks has urged for Labor's re-regulation of the job market.

And Ellis ignored the likelihood that workforce gender gaps stemmed more from women and men's differing choices than from insidious structural and cultural barriers that business supposedly maintained.

She began with the "fundamentally unfair" 17 per cent gender pay gap: basically the extra wages earned by male full-time workers compared with female full-time workers. But Australia has the sixth lowest gender wage gap of 20 countries belonging to the Organisation for Economic Co-operation and Development. We're on par with Sweden, lower than the US and Germany, and much lower than Japan. And this gap partly reflects the four extra hours that Australian men working full-time clock up each week compared with full-time female workers. Take this out, and the gender pay gap narrows to 11 per cent an hour.

The gap has widened amid the surge in high-wage mining boom jobs that are overwhelmingly filled by men. But, even then, the gender pay gap reflects entrenched male and female "lifestyle choices" after they form families. Most women break or reduce their job patterns when they have children, which reduces their experience, career prospects and earning potential.

Hence, there is no gender wage gap for under-30 workers. For older workers, there is virtually no gap between men and childless women.

Yet a Productivity Commission paper released two months ago notes that the gender gap has not discouraged women aged over 45 from penetrating the workforce more rapidly than any other cohort in the past generation. Mature women earn a sizeable premium for their tertiary qualifications. When they work full time, they get promoted more rapidly than mature-age men. Yet mature-age women strikingly still prefer part-time and casual work more than mature-age men do. On average, they put in no more hours today than a generation ago. While all women fill 45 per cent of jobs, women working full time account for 28 per cent of hours worked.

Part-time and casual workers don't suffer a wage penalty. But they do wear a promotion penalty. It's hard to be promoted up the management ranks to the executive suite juggling part-time work while being the primary family carer.

The bad outcomes identified by Ellis fit more comfortably with the work of John Howard's favourite sociologist, Catherine Hakim. The London School of Economics senior research fellow suggests that 10 per cent to 30 per cent of women are "home-centred" and prefer not to work; 40 per cent to 80 per cent are "adaptive" and want to work without being totally career committed; and 10 per cent to 30 per cent are "work-centred" with their jobs being their main priority in life.

The Productivity Commission suggests that Hakim's breakdown is supported by the "broad stability over the past two decades" in the household division of labour. As in the early 1990s, women on average still spend nearly twice as many hours a day than men doing housework, shopping and looking after children "despite considerable social and demographic changes". This entrenched division is one of the main factors behind the gender work imbalance.

Yet the Productivity Commission notes that 68 per cent to 73 per cent of mature-age female workers are "very satisfied" with their remuneration. Three-quarters are very satisfied with their job flexibility. Although some want more work, part-time working women are most satisfied with their hours. And women in full-time jobs would rather work less. If the preferences of all mature-age female workers were met, they would spend 10 per cent less time on the job.

If all this is unsatisfactory on equity grounds, boardroom gender quotas for some of society's most highly paid workers are not an obvious place for a Labor government to focus. If it's about efficiency, then Labor should convince the shareholders' association and superannuation funds that investors would generate more profit by voting well-qualified women on to boards. Rather than unleashing the workplace gender cops, Ellis should make equal opportunity part of a genuine push to raise the productivity and flexibility of Australia's over-regulated and sometimes blokey workplace culture.

Any serious policy response needs to recognise that many women make their own choices about balancing family preferences with the prospect of being a company executive on call 24 hours a day well into their 50s. Yet senior business executives are the main pool from which board members are rightly drawn.

The danger in trying to resolve this tension through quotas was revealed in the round table of directors reported in The Weekend Australian on Saturday. Reflecting the unease, Medibank and IOOF board member Jane Harvey said the female directors got approached all the time by young women who wanted board positions. Harvey said: "Some of these young women . . . haven't actually achieved and made a name for themselves in their first career." They saw directorships "as a part-time job or something that fits in with the children and that sort of thing."