What is Equal Pay Day?
This year in Australia, Equal Pay Day will be held on 25 August. It’s organised annually by the Workplace Gender Equality Agency (WGEA) and represents the additional 56 days that women need to work from 1 July (the first day of the new financial year in Australia) to earn the same amount of money as men.
In New Zealand, there’s been a push for a similar gender wage inequality initiative called No Pay Day. Last year, it was held on 28 November to signify the fact that New Zealand women are effectively working the rest of the year for free due to the gender pay gap.
Around the world, the United Nations’ International Equal Pay Day is observed on 18 September. The purpose of International Equal Pay Day is the same as Equal Pay Day in Australia – to raise awareness about the gender pay gap around the world and the ongoing challenges women must face.
This year, the theme of Equal Pay Day in Australia is ‘What’s Missing Matters’.
What’s Missing Matters
“For some people, the gender pay gap is hard to understand or does not seem relevant to their everyday lives,” says Ms Woolridge. “But for women in Australia, the gender pay gap matters. The dollars and cents represent the value placed on their skills, labour and time. It represents missing money that could be spent to meet everyday costs of living.”
The gender pay gap can be difficult to comprehend if someone hasn’t experienced pay inequality directly. This is why the theme of this year’s Equal Pay Day is so important – it seeks to raise awareness around an issue that affects half of our society but is overlooked by many.
“Sometimes you don’t notice something until it’s not there,” Mary Woolridge, the CEO of WGEA announced in an Equal Pay Day press release. “That’s why we are asking employers to take action to reduce their gender pay gap and demonstrate that what’s missing matters.”
Based on data from the Australian Bureau of Statistics, the average weekly pay for men working full-time is $1,907.10. In comparison, women earn $1,653.60 per week on average. This creates a gender pay gap of $13,183 per year. Based on these average earnings, it takes women an additional 56 days of paid work (or eight weeks) to earn the same amount as men.
How the gender pay gap negatively affects women
In Australia, the national gender pay gap is 22.8% according to the WGEA. While progress is being made, we still have a long way to go.
“It doesn’t matter how you cut the data, the outcome is still the same: there’s a gender pay gap in every industry and every occupation that means women earn less than their male colleagues,” Ms Wooldridge says.
Because of the persistence of the gender pay gap, women are more likely to be financially disadvantaged than men. As well as impacting take-home pay, women generally retire with less superannuation than men due to a lifetime of reduced earnings. This can put women in an uncertain and insecure position in their later years.
The impact of the gender pay gap on the economy
“The gender pay gap costs the Australian economy $51.8 billion every year,” says Ms Woolridge. “What’s missing matters. It matters for individuals, it matters for families and it matters for Australia.”
This alarming figure comes from the fourth edition of the ‘She’s Price(d)less: The economics of the gender pay gap’ report, an analysis compiled by KPMG in collaboration with the Diversity Council of Australia and WGEA that examines the driving forces behind the gender pay gap.
On a worldwide scale, Moody’s Analytics reports that the gender pay gap is estimated to cost the global economy $7 trillion.
The Moody’s report also found that, on average, women make a higher upfront investment in education but tend to land in lower-level and lower-paid positions which they’re ultimately overqualified for. Measures of labour underutilisation systematically show that the underutilisation rates of women exceed those of men across a broad spectrum of advanced, emerging and developing economies.
Underutilising women in the workforce, in terms of time and skills, contributes to economic loss on all levels. The report states that, “Bridging the gender gap in management positions and raising women in the workforce to their potential would raise productivity and economic output across the globe.”
How companies can close their gender pay gap
If your company has a gender pay gap, it may seem like a daunting task to try and close that gap. But if you break the process down, you can tackle it in incremental steps and enact positive change that ultimately benefits all employees as well as the organisation’s bottom line.
Conducting a gender pay gap audit is a great starting point. A gender pay gap audit is a comprehensive analysis of your organisation’s pay practices to determine the disparities in pay between female and male employees. By analysing your organisation’s data and closely examining the causes behind the company’s gender pay gap, you can begin to discover the story behind the numbers. From there, you can begin to take meaningful action towards closing your organisation’s gender pay gap.
Want to keep up-to-date with ELMO’s content? Subscribe to our newsletter for first-look access to our free research, blogs, and resources.