Australia is Undergoing Massive Economic Stress, but it may Usher in an Unexpected Opportunity to Shift our Entrenched Gender Pay Gap.

The Gender Pay Gap in Australia is underpinned by three key pillars - female-dominated industries have persistent lower wages, women are still crazily underrepresented in leadership roles (83% of our CEO's are males in 2020) and the third and the most impactful is that women take on primary caring roles at home. The Australian economy has been geared around the idea that a woman who has children will take on the majority of unpaid work at home – a typical woman with pre-teenage children undertakes paid work for only 2.5 days per week. And it costs her dearly, The Grattan Institute published data yesterday that showed women with children currently earn about $2m less over their lifetimes than men with children. We cannot close the Gender Pay Gap until we address the way we structure care for our children.

Australia is undergoing the greatest economic stress any of us have seen in our lifetimes. As the government invests in economy building it will quite literally be engineering the shape of our future workforce – with this comes a great opportunity to address systemic issues to build an economy that is more reflective of our values. The Grattan Institute’s economic modeling shows that increasing the economic participation of women could increase GDP by $11 billion a year – on par with cutting the company tax rate by 25%.

The good news is there is no mystery as to how to close the gender gap - there is a clear road-map. Australia lags behind many of our peers on this matter – that sounds bad, but it means we do not need to reinvent the wheel. There are sound, evidence-based learnings we can invest in now. The two levers that the government can pull now are around the provision of childcare (ideally making it universal free, in line with public education) and giving men more equal access to parental leave.  

When it comes to parental leave, the private sector in Australia is really leading the way. What we see is when we give new dads equal access to parental leave when their children are born, they take on more equal responsibility for unpaid work at home in the longer term (see graph below). Now imagine if we could make this economy-wide. Not only would the pay gap shift, but we would also see men living fuller lives, women staying in the leadership pipeline, and the economy growing.

This is an unprecedented time we are living in and it provides unprecedented opportunities to re-gear our economy to make it more in line with our values – with greater gender equality, where women are significantly working, earning, and leading in line with their male counterparts.

Amelia Horrigan-Dixon
Founder and CEO, Think Partnership

Opinions first appeared in The Australian Financial Review:
https://www.afr.com/politics/federal/pandemic-could-reverse-gender-pay-gap-gains-20200813-p55l9o