Australian women make 83¢ for every $1 a man earns: report

March 24, 20161:00 pm1733 views
Australian women make 83¢ for every $1 a man earns: report
It's not just Australia that have big pay gaps based on gender. Illustration: Andrew Dyson Read more: Follow us: @theage on Twitter | theageAustralia on Facebook

Australian women earn about 83¢ cents for every $1 a man earns, according to a new report analysing the gender pay gap.

The report by recruitment firm Glassdoor, titled Demystifying the Gender Pay Gap, is based on more than 534,000 salary reports held by the firm on the pay differences between men and women in countries including Australia, the United States, Britain, France and Germany.

The Australian results, based on information on more than 4000 local employee salaries, showed that when variables such as age, education, experience, occupation, industry, location, year, company and job title, are taken into account, the adjusted gender pay gap shrinks from 17.3 per cent to 3.9 per cent.

More than one-third (38 per cent) of the unadjusted pay gap is explained by differences in how men and women sort into different occupations and industries with varying earning potential.

Figures released last year by the Workplace Gender Equality Agency said men earn on average $27,000 more than women every year. It estimates that the Australian gender pay gap is roughly 17.9 per cent.

The Glassdoor report, which tracks more than 4000 salaries (1370 employers) reported from calendar years 2006 through to 2015, had similar findings.

The sample was 77 per cent male and 23 per cent female. The average age of those included was 35 years, with more than 6 years of work experience.

It said the average base pay was $99,940 per year for men and $84,218 for women. That amounts to a gender pay gap of $15,722 in base pay between men and women.

“The gender pay gap is real,” said report author and Glassdoor’s chief economist Andrew Chamberlain.

“Australian women are earning roughly 83¢ for every dollar earned by men on average.”

Glassdoor’s survey collects information on base salary as well as total compensation. Since employees can optionally report income from tips, bonuses, commissions and other forms of pay, the report said “they are subject to under-reporting by users” and that “for this reason, our primary focus is on base pay”.

Overall, there is a 17.3 per cent gap in base pay between males and females, and a 17.8 per cent gender pay gap in total compensation.

But several factors made a difference in the level of the gap. “Applying controls for age, education and years of experience, the gender pay gap shrinks to 12 per cent for base pay and 12.6 per cent for total compensation,” the report said.

“Finally adding in a rich set of controls for company and job title, we find an “adjusted” gender pay gap of 3.9 per cent for base pay and 5.4 per cent for total compensation.”

The report said 59 per cent of the Australian sample had bachelor’s degrees, 27 per cent had master’s degrees, and 8 per cent had a high school diploma.

Although about 61 per cent of the overall Australia gender pay gap in base pay was explained by unique worker characteristics, this still left 39 per cent unexplained and due to differences in the way the labor market rewards men and women with the same characteristics.

“Individual worker characteristics explain only about one-fourth of the Australia gender pay gap, nearly identical to our finding for the United Kingdom,” the report said.

Other countries also had big pay gaps based on gender. In the United States, the unadjusted pay gap was 24.1 per cent, in Britain it was 22.9 per cent and in France it was 14.3 per cent.

“While overt workplace bias may contribute to some of the gender pay gap, our research illustrates the importance of providing men and women equal opportunity in education and training,” Dr Chamberlain said.

He said gender norms such as women bearing disproportionate responsibility for child and elderly care, had also pressured women into more flexible jobs with lower pay.

“Policies ensuring women have more equal access to science, technology and health care training, targeted initiatives to encourage career development and pay negotiation, and programs that support care for children and the elderly can help address some of the root causes,” he said.
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