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Review of the Equal Opportunity for Women in the Workplace Act 1999 Consultation Report

2 Context of the review

This section provides a brief overview of the current status and characteristics of women in employment as well as how Australia fares internationally against key indicators for equal opportunity. It examines the framework for equal opportunity for women in Australia and the relationship of the EOWW Act to other key pieces if legislation, policies and institutions. It concludes with a brief review and comparison of the EOWW Act and the EOWA with alternative approaches in Australia and other relevant international jurisdictions, and options for alternate models of legislation.

2.1 A snapshot of the current trends and characteristics of women in the labour force

2.1.1 Participation in education and training

The significant advances in women's educational attainment obscure the strong gendered patterns in educational choices which influence future earning potential. Women continue to be over-represented in areas of study linked to lower earning industries, while men continue to be over-represented in areas of study linked to higher earning industries. For women, access to education and training over the lifecycle is also a key factor influencing paid workforce participation and lifetime earnings.3

2.1.2 Labour force participation

The labour force participation rate of women in Australia has increased significantly over the last 30 years. Between February 1978 and June 2009, the labour force participation rate of women increased from 43.5 percent to 58.7 percent.

Australian women's increased workforce participation has been a major factor in leading to better economic security for women. Paid work gives women the opportunity to ensure their own financial security, contribute to the family budget and secure their economic future into retirement.

While paid work improves women's choices and independence, it is also fundamental to workplace productivity and economic growth. Paid work is also widely recognised as key to addressing disadvantage and to contributing to social inclusion.

Despite the significant increases in women's workforce participation, women continue to spend less time in the paid workforce than men, and to fare less well than men on a number of key indicators while at work. The nature of women's work is also quite different to men's.

While the labour force participation rate of women was 58.7 percent in June 2009, for men it was considerably higher at 72.1 percent.4 Women are much less likely to work full-time than men (54.9 percent compared to 84.1 percent), and comprise over 70 percent of the part-time workforce.5

Workforce participation rates for women by age show a marked dip between the ages of 25 and 44 years, which is not evident for men. Australia also has a lower participation rate for mothers with young children than the Organisation for Economic Cooperation and Development (OECD) countries of Canada, Sweden, the United Kingdom and the United States.6

These key indicators suggest that having children significantly impacts on Australian women's workforce participation, as well as their experiences while in paid work and their capacity to save for a financially secure retirement.

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2.1.3 Women's position in the labour market

The Australian paid workforce is highly gender segregated, and female dominated industries have been historically undervalued. For example, industries such as aged care, child care, health and community services are all female dominated and generally lower paid compared to male dominated industries such as engineering, banking and finance.7 Occupational segregation between men and women continues to exist, and male-dominated occupations continue to attract higher remuneration than female-dominated occupations.

Women are more likely to be clerical, sales and community and personal service workers, while men are more likely to be technicians and trades workers, machinery operators and drivers and labourers. Women are still substantially under-represented in the manual trades in Australia, with the number of women in manual trades being less than two percent.8

Women are less likely to be in leadership positions within organisations. Only 10.7 percent of executive managers in the ASX200 are women. At the board director level, there are more than 10 men to every one woman and, at CEO level, there were 49 male CEOs for every female CEO in the ASX200.9

2.1.4 Women's earnings

Despite gains in participation rates over time, women's earnings remain persistently lower than men's.

The Australian Graduate Survey details average starting salaries for both female and male graduates and clearly shows that the gender pay gap begins as soon as women enter the workforce. In 2008, new male graduates earned median starting salaries of $47,000 compared to $45,000 for women.10

Chart 1 shows trends in the gender pay gap based on the average weekly ordinary time earnings of full-time employees from February 1984 to February 2009. It is clear that the gender pay gap has improved only slightly over the last 25 years, narrowing just 2.1 percentage points from 19.3 percent in February 1984 to 17.2 percent in February 2009.11

Chart 1: Gender pay gap based on the average weekly ordinary time earnings of full-time adults, February 1984 to February 2009.

Chart 1: Gender pay gap based on the average weekly ordinary time earnings of full-time adults, February 1984 to February 2009. The chart shows the gender pay gap based on the average weekly ordinary time earnings of full-time adults from February 1984 to February 2009. In February 1984, the gender pay gap was 19.4 per cent. It decreased to 17.4 per cent in February 1989. It fell again in February 1994 to 15.8 per cent and again in February 1999 to 15.5 per cent. The gender pay gap remained at 15.5 per cent in 2004 and increased to 17.2 per cent in February 2009.
Description

Source: ABS Average Weekly Earnings, February 2009, Cat No 6302.0, seasonally adjusted data

Over a lifetime, pay inequity places women at a considerable disadvantage compared with men. According to the AMP/NATSEM Income and Wealth Report, a 25-year old man is likely to earn a total of $2.4 million over the next 40 years, more than one-and-a-half times the $1.5 million prospective earnings of a woman.12 This means that young women can expect to earn just shy of $1 million less than men over their career lifetime, with the gap worsening for tertiary educated women (where the gap is $1.5 million)13. In their study, NATSEM has removed the incidence of children and the impact of reduced hours of work, meaning the differences are based on gender and employers' perceptions of capability.

Other studies into the causes of inequality in employment outcomes for women suggest there are a range of contributing factors to the pay gap, such as differences in labour force participation and access to training and development opportunities. However, generally, studies suggest that about 50 percent of the pay gap cannot be fully explained by differences in these factors and can be attributed to discrimination in the workplace.14

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2.1.5 Impacts of family responsibilities on employment outcomes

It is clear that a major obstacle to equal employment opportunity is the capacity for women and men to manage their work, life and family responsibilities. Long and inflexible working hours may preclude many workers with family responsibilities from pursuing particular career paths or job opportunities.

In terms of paid work, the proportion of female full-time workers working 50 or more hours a week ('very long working hours') almost doubled from nine percent in 1985 to 16 percent in 2005. Almost one-third of men now work very long hours.15 Australian full-time workers work amongst the longest hours of the OECD nations.16

When the combined impact of paid and unpaid work is considered, overall, women work longer hours than men. In 2006, the total hours of paid and unpaid (domestic) work for mothers whose youngest child was between 0 and four years of age was 85.9 hours per week, compared to 79.6 hours for fathers, 61.3 hours for men without children and 55.5 hours for women without children.17

Access to paid maternity leave or paid parental leave also has implications for future earnings and workforce participation. There are links between the availability of paid parental leave and the paid workforce participation of mothers. For example, retention rates for some companies with paid leave entitlements such as 'Employer of Choice for Women' companies are around 90 percent. Maintaining a connection to the paid workforce following the birth of a child is a determinant of future employment patterns and earnings.18

Men are also far less likely to access flexible work opportunities, and women continue to engage less in paid work. While families must be free to choose how they organise their lives, the impacts of women earning lower pay for comparable work and reduced access to promotional opportunities, as well as pressures on men to be the primary bread-winner and not take up flexible working arrangements, can unduly influence these decisions. A recent study suggested that men's requests for flexible working hours are more likely to be denied than women's.19 It is necessary, for the wellbeing of the economy and the community, that both women and men are able to enjoy the different benefits that family responsibilities and paid work can deliver.

2.1.6 Workplace discrimination and harassment

Experiences of sex discrimination and sexual harassment, fuelled by discriminatory stereotypes about gender roles, continue to pervade women's experiences of paid work. These can occur at any point in the lifecycle. The Australian Human Rights Commission conducted a national telephone survey in 2008 and found that 22 percent of women aged 18 to 64 years have experienced some form of sexual harassment in the workplace during their lifetime.20

Pregnancy is a time when women are commonly vulnerable to discrimination and inequality in the paid workforce. This can take the form of demotions, missing out on promotions, redundancies, denial of family friendly conditions and even bullying and harassment in some cases. The vulnerability of women's employment arising at the time of pregnancy or returning to work following pregnancy can have severe financial consequences. This includes a loss of income at the time of pregnancy and financial insecurity as women attempt to find new work that accommodates caring responsibilities. Nearly one in every five pregnant women experiences at least one difficulty in their workplace in relation to being pregnant.21

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2.2 How Australia's performance compares internationally

Australia performs well on a range of international indices, particularly in relation to health and educational outcomes. In leadership and economic indicators, Australia performs less well. These key indicators are characterised as follows:

While women's participation in the paid workforce has risen dramatically over the last three decades, Australia lags behind many other developed countries in terms of women's workforce participation rates.

When compared to other OECD countries with similar tertiary education levels, Australia has the fifth largest pay gap.22 Australia's ranking in the Global Gender Index of the World Economic Forum (a framework for capturing the magnitude and scope of gender-based disparities and tracking their progress) has slipped from 15th place in 2006 to 20th place in 2009. This ranking incorporates measures of workforce participation, remuneration and opportunity. On these measures, Australia is significantly behind New Zealand (5th place), South Africa (6th place) and United Kingdom (15th place).23 This ranking is also contrasted sharply to the Philippines which, as a developing country, is ranked within the top 10 countries in the Global Gender Index. Differences in achievement between Australia and the Philippines lie in the Philippines' effort in closing the education and health gap between women and men, and the role of women in the political environment.

As stated previously, only 58.7 percent of all women aged 15 years and over were in the labour force in Australia, making up 45.3 percent of Australia's total labour force. This may be contrasted with Norway, for example, with 69.7 percent of women in the labour force or New Zealand at 62.1 percent. The participation rates of mothers with young children are particularly low when considered alongside comparable OECD countries such as Canada, Sweden, the United Kingdom and the United States.24 The employment rate of mothers with a child under six years of age is 49.6 percent, compared with the OECD average of 59.2 percent25

Women's re-entry to the workforce after having children may be hindered by a number of factors, including: a lack of affordable and appropriate childcare, the absence of flexible working options and difficulties balancing work and personal commitments. These barriers may influence the overall participation rate of women with young children in Australia by reducing the number of women who return to work after having children.

Generally, those countries that have a stronger regulatory approach for equal opportunity in practice are better ranked in key international indicators than those countries that do not. However, legislation alone does not always predict better rankings - for example, the United States has legislation in place for equal opportunity for women, but is ranked lower in the OECD rankings than Australia (31st compared to Australia's 20th placing). It is likely that employment outcomes for women are influenced by a range of factors including regulatory effort, as well as economic participation and opportunity, educational attainment, health and survival and political empowerment.

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  1. Australian Human Rights Commission (September 2009). Accumulating poverty? Women's experiences of inequality over the lifecycle. An issues paper examining the gender gap in retirement savings.
  2. ABS (2009) Labour Force Survey, Australia, June 2009, Cat No 6202, seasonally adjusted data.
  3. Ibid
  4. Organisation for Economic Co-operation and Development. (2007) Babies and Bosses: Reconciling Work and Family Life (Vol.5): A Synthesis of Findings for OECD Countries.
  5. Australian Human Rights Commission (September 2009). Accumulating poverty? Women's experiences of inequality over the lifecycle. An issues paper examining the gender gap in retirement savings.
  6. Shewring, F. (2009) The female 'tradie': challenging employment perceptions in non-traditional trades for women. National Centre for Vocational Education Research (NCVER). Commonwealth of Australia.
  7. Equal Opportunity for Women in the Workplace Agency (2008), EOWA Australian Census of Women in Leadership.
  8. Graduate Careers Australia (December 2008). GradStats, No.13. Available from: <http://www.graduatecareers.com.au>, accessed November 2009.
  9. ABS (2009) Average Weekly Earnings, February 2009, Cat No 6302.0, Seasonally Adjusted Data.
  10. Cassells, R. Miranti, R. Nepal, B. and Tanton, R. (2009), 'She works hard for the money: Australian women and the gender divide', AMP.NATSEM Report No. 22.
  11. Ibid.
  12. Barron JD & and Cobb-Clark DA (2008) 'Occupational segregation and the gender wage gap in private and public-sector employment: A distributional analysis', IZA Discussion Paper No. 3562, Institute for the Study of Labor, Bonn. Kee HJ. (2005). 'Glass ceiling or sticky floor? Exploring the Australian gender pay gap using quantile regression and counterfactual decomposition methods', The Australian National University Centre for Economic Policy Research Discussion Paper No. 487, ANU, ACT. Daly, A, Kawaguchi, A, Meng X & and Mumford, K (2006) 'The gender wage gap in four countries' IZA Discussion Paper No. 1921, Institute for the Study of Labor, Bonn. Bray, R (2008) 'Gender earnings differentials in Australia: A statistical overview of women's earnings', Department of Families, Housing, Community Services and Indigenous Affairs, unpublished report. Booth, AL (2007) 'The glass ceiling in Europe and Australia: Why are women doing badly in the labour market?' Paper presented at the Australian Labour Market Research Workshop, University of Melbourne, 8-9 February.
  13. ABS (2006) Australian Social Trends, Trends in Hours Worked, cat 4102.0
  14. OECD (2007) Usual Working Hours by Gender
  15. Craig, L. and Mullan, K. The Impact of Gender and Parenthood on Men's and Women's total work in Australia 1992-2006. Australian Labour Market Research Workshop, 2008.
  16. Australian Human Rights Commission (September 2009). Accumulating poverty? Women's experiences of inequality over the lifecycle. An issues paper examining the gender gap in retirement savings.
  17. Pocock, B., Skinner, N and Ichii, R. (2009) Work, Life and Workplace Flexibility, Centre for Work and Life, University of South Australia.
  18. Australian Human Rights Commission (2008) Sexual Harassment National Telephone Survey, at www.humanrights.gov.au/sexualharassment/serious_business/index.html, viewed 16 November 2009.
  19. Cassells, R. Miranti, R. Nepal, B. and Tanton, R. (2009), 'She works hard for the money: Australian women and the gender divide', AMP.NATSEM Report No. 22., p. 18.
  20. Cassells, R. Miranti, R. Nepal, B and Tanton, R. (2009) She works hard for the money: Australian women and the gender divide. AMP.NATSEM Income and Wealth Report, Issue 22.
  21. Hausman, R., Tyson L.D., Zahidi, T. (2009) Global Gender Gap Report 2009, World Economic Forum, Geneva, Switzerland.
  22. Organisation for Economic Cooperation and Development (2007) Babies and Bosses: Reconciling Work and Family Life: A Synthesis of Findings for OECD Countries. Volume 5.
  23. Australian Human Rights Commission (September 2009). Accumulating poverty? Women's experiences of inequality over the lifecycle. An issues paper examining the gender gap in retirement savings.

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