The gender pay gap – the difference between average earnings for men and women – shows women tend to earn less than men on average.
Research suggests full-time working men earn more than full-time working women across industries and occupational categories. Yet, in addition to getting paid less, women are likely to be subject to a range of other factors that lead to further financial disadvantage.
Factors The Disadvantage Women Financially
These social and cultural trends may both drive the pay gap and work separately to negatively affect women’s earnings relative to men.
Women on average have less money saved by retirement age. 47.3% of seniors state there is a gender gap when it comes to superannuation balances at retirement. Men receive $12 billion more in superannuation guarantees than women each year, and on average women retire with 36% less in super than men.
At every stage of their working lives, women on average have less super than their male counterparts. Whilst the gap is slowly closing, equality is unlikely until 2122 at the current rate.
One factor behind this gap is the fact women are more likely to move in and out of paid work as they provide caregiving for children and parents. Women are also more likely to be working in casual and part-time roles.
Family And Caregiving
If you’re female, you’re probably doing more family and caregiving work than the males in your household.
A factor that could partly be driving the pay gap could be family responsibilities that negatively impact women’s earning power. Women spend 64.4% of their average weekly working time on unpaid care work, compared to 36.1% for men. This means that for every hour men commit to unpaid care and domestic work, women commit one hour and 48 minutes.
This is also a financial disadvantage in itself, as this cultural and social trend can lead to interruptions to a person’s work history. The fact that women tend to be responsible for caring, child rearing, and other unpaid domestic activities means they have less time to dedicate to a full-time and/or high-earning job. They also have more challenges when it comes to dedicating the longer hours needed for given occupations, due to these historically gendered responsibilities.
Disadvantage In Divorce
Another potential financial disadvantage is the impact of a marriage breakdown, which can hit women harder than men when it comes to money. As many as 40% to 50% of marriages end in divorce. Frequently, women aren’t in charge of household finances and may not have a clear understanding of assets they own either jointly or separately. Poor financial literacy could impact how fair a share women get in the event of a marriage breakdown.
As women are more likely to take time out of the workforce to help raise the family children and care for elderly parents, it’s even more important they’re compensated for any time they gave for caregiving activities if the marriage results in divorce.
Undervaluing Of ‘Female’ Jobs
Yet another source of financial disadvantage for women is the undervaluation of jobs traditionally seen as ‘female’. Female-dominated occupations in healthcare, social services, and retail come with lower pay than those in ‘male’ industries like construction and mining.
In addition, these so-called male industries tend to provide more discretionary payments like bonuses, commissions, profit-sharing, and shift allowances, unlike female-dominated industries.
What’s more, if you’re a woman seeking to enter these male-dominated occupations, you could be facing strong barriers ranging from gender stereotyping during educational years, social expectations, and bias from employers.
Bias In Hiring And Pay
If you’re a woman, you are likely to be discriminated against in hiring, pay, and promotion decisions. Whether the bias is conscious or unconscious, it puts women at a clear financial advantage because they’re less likely to get the job, get promoted, or receive a pay raise or a fair salary.
Behind this might be cultural biases and gender stereotypes about the type of work a woman is capable of doing. There could be negative preconceptions about how women might fit in a male-dominated industry, workplace, or occupation.
Lack Of Female Role Models And Mentors
Finally, a lack of women in leadership as role models and mentors could also lead to concrete financial disadvantages for females. As little as 17.1% of CEOs are women, and women occupy just 25.8% of board members and 30% of crucial management positions.
Since women are more likely to suffer the burden of historically gendered responsibilities that need flexible approaches to work, decision makers could be acting from the belief that women aren’t as suitable for senior roles. As such, fewer females in leadership and mentoring roles could be making it harder to normalise women in senior roles and for women early in their careers to aspire to higher-paying jobs.
Women Are Financially Disadvantaged
Women tend to end up more financially disadvantaged relative to their male counterparts in just about every area of life: retirement nest eggs, earning potential, unpaid work for family, and divorce.
Behind all these outcomes are likely social, cultural, and economic factors that undervalue women’s contributions and promote bias in hiring and pay decisions. Correcting the imbalance will likely take a lot of time and effort, and both the private sector and government should play leadership roles in bringing about change, so women can enjoy a fairer share of the positive social and economic outcomes they undeniably contribute to bringing about.
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