Key Takeaways:
- Gender pay gap persists, despite progress.
- Hourly earnings vary greatly by occupation and gender.
- Diverse methods of pay setting exist, with gender differences.
Recent data from the Australian Bureau of Statistics (ABS) shows that, on average, men earn more per hour than women.
Men earn around $46.10 per hour, while women earn $42.00 per hour. This reflects a narrowed gap of 8.9 percent from the 9.7 percent reported in May 2021. The trend of men earning more per hour than women remains consistent across all major occupation groups, highlighting the ongoing challenge of addressing and reducing gender-based pay disparities in the workforce.
Median weekly earnings were $1,300, with men earning $1,509 and women $1,130.
Australia implemented a law last year requiring companies with over 100 employees to disclose their gender pay gap, aiming to encourage action and bridge the divide. Despite seeming like an exception, the gender pay gap—where women earn less than men for the same role—is a global norm, with women globally earning about 20% less than men, according to a 2018 International Labour Organization (ILO) study.
In 2022, the World Economic Forum projected it would take 132 more years to close the global gender pay gap. Australia, ranking 43rd on the Global Gender Gap Index 2022, lags behind leaders Iceland, Finland, and Norway, while India is positioned at 135 among 148 countries.
While reporting these numbers is a crucial step, addressing the gender pay gap requires more than disclosure. Companies must revamp policies on working hours and flexibility, offering support for caregiving responsibilities, especially for those in junior positions. Despite progress, discrimination and stereotypes persist in the corporate world, emphasizing the need for proactive measures to narrow the gap.
Bjorn Jarvis, ABS head of labour statistics, said: “Analysing the difference between male and female earnings is complex and there is no single measure that can provide a complete picture. Hourly earnings comparisons are particularly useful in understanding gender pay differences beyond weekly earnings measures, given women are more likely to work part-time than men.
Managers lead hourly earnings
Meanwhile, managers topped the charts for hourly earnings in May 2023. Managers boasted the highest average hourly earnings at $67.20, closely followed by Professionals at $60.60. On the other end of the spectrum, Sales workers and Labourers reported the lowest hourly earnings among all occupations, coming in at $30.90 and $32.20, respectively, in contrast to the overall hourly average of $44.00.
“In dollar terms, the difference between average hourly earnings for men and women was greatest for Managers ($14.10 per hour) and Technicians and trades workers ($8.20). It was lowest for Sales workers ($2.30),” Mr Jarvis said.
“In percentage terms, the difference was greatest for Managers (19 per cent), and lowest for Sales workers (7 per cent) and Professionals (10 per cent).”
“The majority of full-time employees are men (61 per cent) with higher average earnings ($2,074 a week) than full-time women ($1,815 a week),” Mr Jarvis said.
“The majority of all part-time employees are women (69 per cent) with higher average weekly earnings than part-time men ($817 compared to $759). This reflects the greater use of part-time working arrangements by women in higher paying jobs, compared to men.”
Diverse methods of pay setting in May 2023
In May 2023, the predominant method of determining pay was through individual arrangements, accounting for 39 percent of cases, marking a slight increase from 38 percent in 2021. Following closely, collective agreements constituted 34 percent, slightly down from the 35 percent reported in 2021. Less than a quarter of employees had their pay determined by an award, standing at 23 percent. A smaller proportion, 4 percent, consisted of owner managers of incorporated enterprises who had the autonomy to set their own pay. Both of these percentages mirrored those reported in 2021.
Individual employment agreements are personalized negotiations between an individual and their employer. These agreements exclusively bind the parties involved, impacting only the individuals who are part of the agreement In contrast, collective agreements are the result of negotiations between a registered union and an employer. The scope of a collective agreement’s influence is limited to employees who are both members of the union and fall under the coverage clause specified within the collective agreement.
Notably, a discernible gender difference emerged in the methods of pay setting. Men were more likely to have their pay established through individual arrangements, representing 45 percent. On the other hand, collective agreements were the predominant method for women, comprising 38 percent of cases.
Charles Ferguson, General Manager at G-P said: “Today’s Employee Earnings and Hours data demonstrates employees are taking the lead when it comes to negotiating their take-home income. The figures illustrate a clear trend towards individual arrangements and away from collective agreements, with six of Australia’s eight states and territories favouring bespoke arrangements with their employers. Despite recent moves from some to provide transparency around salary bands, individually negotiated salaries make up an average of 38.7% of contracts Australia-wide. Amid an extremely tight labour market, this aligns with G-P’s recent research which revealed 28% of Australians rank salary and benefits as the most important factor when considering a job opportunity at a global company.
In an increasingly competitive landscape for recruiting and retaining talent, businesses must prioritise cultivating an attractive compensation strategy to differentiate themselves from competitors, even if this means making concessions elsewhere in the business. Perks such as flexible benefits, bonuses and company culture offerings, in addition to a base salary, can help facilitate the negotiation process and retain more workers in Australia and around the globe, ultimately paying dividends in the long term.”
The Survey of Employee Earnings and Hours is usually conducted every two years with a May reference period.
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