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The real truth about the gender pay gap and how you can take the right steps to conquer it.

We’ve all heard the term ‘gender pay gap’.  It’s a phrase thrown around by journalists, politicians, and academics on a regular basis. But what does it actually mean? Is it a legitimate thing? And what impact does the gender pay gap have on women in real life?

In simple terms, the gender pay gap refers to the difference between the average earnings of women and men in the workforce. It is an internationally established measure of women’s position in the economy in comparison to men.

It’s not just about equal pay for equal work. The gender pay gap helps to reveal the bigger picture of the economic and social factors that combine to reduce women’s earning capacity over their lifetime.

So how are we doing in Australia?

Information is regularly collected and analysed by the Australian Bureau of Statistics (ABS) and the Workplace Gender Equality Agency (WGEA) to assess how Australia is performing in this area.

And the statistics are a little confronting:

  • The national gender pay gap currently sits at 14.2%. While we’ve seen higher figures in the past (in 2014 it was 18.5%!) the gap persists, and women continue to be behind the eight ball.
  • At present, women working full-time earn an average of $1,575.50 per week, while men working full-time earn $1,837.00.
  • This equates to a difference of $261.50 in the full-time average weekly earnings of women and men. 

The pay gap also varies between states and territories, industries, and occupational categories. Sadly, EVERY industry in Australia has a pay gap favouring full-time working men – even female-dominated industries like health care and social assistance.

In some instances, men and women performing work of equal or comparable value are not paid equally. This is actually unlawful in Australia, but it still happens every day.

Why is this?

While most organisations do not set out to create gender pay gaps, they continue to exist. According to WGEA, the gender pay gap is influenced by a number of factors, including:

•        discrimination and bias in hiring and pay decisions

•        women and men working in different industries and different jobs, with female-dominated industries and jobs attracting lower wages

•        women’s disproportionate share of unpaid caring and domestic work

•        lack of workplace flexibility to accommodate caring and other responsibilities, especially in senior roles

•        women’s greater time out of the workforce impacting career progression and opportunities.

And the real-life impacts can be disastrous. Research shows that men aged between 30 and 60 have retirement savings worth 42% more than for women of the same age.

According to the ATO, only 27% of female retirees reported having super as a source of income in the 2018 to 2019 financial year compared with 49% of male retirees. And median superannuation balances for women at retirement (aged 60-64) were 23.4% lower than those for men in 2018-19.

This means that women are more likely than men to retire in poverty. Older women are the fastest-growing group of homeless people in Australia, with a 31% increase between 2011 and 2016.

It’s easy to see how marriage break-ups tend to have a greater impact on women’s superannuation compared to their male counterparts.

Why should we care?

Well, because creating a more even playing field for women in the workforce is fair and right, and it benefits everyone.

And because the flow-on effects for women are real and substantial.

‘The gender pay gap does not just impact a woman once in her life. It has a compounding effect that results in a woman’s reduced earning capacity over her lifetime.’ (Source:WGEA)

What can I do to protect myself? 

Governments and businesses are working together to improve this situation, although there is still much to be done.

Until the gender pay gap becomes a thing of the past, there are some simple things you as an individual can do to counter its effects:

1)     Know your value. Have confidence in your ability and advocate for yourself. Before any pay negotiation, research salary expectations and be ready to talk about your experience and what you can offer.

2)     Check your organisation’s commitment. Before joining an organisation, check its commitment to gender equality or (where appropriate) lobby your existing employer for improvements.

3)     Take advantage of paid parental leave and flexible work arrangements. Use them wisely and in combination. Where possible, share caring and domestic duties with your partner.

4)     Protect your super. Check if you have any lost super and consider consolidating to save money on fees. 

5)     Build your super with extra contributions. Contributing even a small amount from your pay makes an enormous difference in the long run and may also offer you tax concessions and even extra contributions from the government.

6)     Understand your risk profile. Make sure the superannuation fund you choose is invested to match your personal risk profile.

7)      Keep the faith! If we work together, a world where there is no gender pay gap is possible. And in that world, everyone wins.

As a woman in today’s society, it is so important to be able to protect yourself from the effects of the gender pay gap and to have financial independence.

The evidence is clear that women are more financially disadvantaged and vulnerable than men, but that doesn’t mean there’s nothing we can do to change that.

We believe everybody deserves financial freedom – regardless of gender – and we’re here to help women achieve more with their finances.

If you’re looking to make better moves with your money, sign up for our online 12-week Financial Masterclass – designed specifically for Australian women so they can achieve financial empowerment.