Despite more women than ever in the workforce, the gender pay gap stubbornly remains, with far-reaching implications. Empowering women with financial literacy skills is key to bridging this gap – now and for good.
As of May 2023, the gender pay gap in Australia sat at 13 per cent, according to the Workplace Gender Equality Agency (WGEA).
Indeed, latest ABS figures show average full-time ordinary earnings for men of $1,982.80 per week, compared to $1,744.80 for women. That’s $238 less per week for women – or $12,376 per year – for the same number of working hours.
Add in all, employees’ average total weekly earnings, which includes casual and part-time roles (dominated by women), and the difference is even more pronounced – $1,672.70 for men versus $1,204.40 for women. That equates to $468.30 less per week for women or a whopping $24,351.60 per year.
This difference is despite more women in the workforce than ever before, with the participation rate for women sitting at a near record high of 62.6 per cent (compared to 71.1 per cent for men).
Why highlighting the gender pay gap matters
The gender pay gap has numerous implications for Aussie women:
- Lower incomes from paid work means less money going into superannuation. KPMG estimates the gender super gap to be as high as 35 per cent.
- Lower incomes become ingrained long-term, restricting the ability to pay for additional training and qualifications with which to generate promotions, pay rises and career changes into higher-earning professions.
- The gender pay gap is present in all major occupation groups. It is not isolated to particular industries or male-dominated roles.
- The gender pay gap is highest among managers, busting the stereotype that only lower income earners, casual employees or non-professionals are affected.
- Lack of financial independence can lead women to stay in unhealthy relationships, with financial abuse a form of domestic violence.
- Women statistically outlive men by 4.1 years – meaning they are paying for more years of life with less money.
- Women – especially those over 50 – are the new face of homelessness, accounting for 81.7 per cent of the total increase in homelessness recorded within the most recent Census.
Financial literacy is key
With the gender pay gap so ingrained and pervasive, what can we do about it?
As individuals, we can’t solve the problem. What is within the control of each and every woman, however, is how she responds to protect herself and her own wellbeing. Collectively, this approach can deliver meaningful change.
This is why financial literacy is key to closing the gender pay gap.
Financial literacy, the Reserve Bank explains, refers to “a set of skills that allow people to manage their money wisely”.
Like all skills though, financial literacy skills aren’t inherited or automatic. They are learned.
Among the most crucial are:
- Career choices: choosing careers where skills shortages and future growth opportunities present the greatest earning potential. Avoiding tertiary studies with large student debts and limited employment/income prospects. Hybrid working post-pandemic presents greater flexibility for women with caregiving responsibilities.
- Budgeting: how to devise and update a savings and investment plan – tracking earnings, outgoings and wealth accrual; maintain visibility over progress towards long-term financial goals.
- Equal decision-making: many women leave financial decisions to their partner, exposing them to losses from poor oversight (e.g. gambling addiction), unwise investments, or weak negotiating power during a relationship breakdown.
- Professional self-awareness: knowing what skills and qualifications are really worth and pushing to be paid accordingly.
- Developing safeguards: an emergency fund, adequate insurances, investment protections, contingency plans.
- Investing: how to deliver optimal returns, balance risk, growth wealth.
- Debt management: the difference between good and bad debts, cash flow management strategies,
- Seeking proper advice: you don’t know what you don’t know, so advice is crucial. Yet the wrong advice can lead to lost earnings, bigger liabilities and greater risk. Well-meaning family and friends speak from their own unique circumstances; social media ‘finfluencers’ and self-styled ‘experts’ peddle misinformation or ideas that benefit themselves first. Qualified, independent tax, legal and financial advice is worth its weight in gold.
Problems can’t be addressed if they aren’t known about in the first place, or the available mitigation strategies remain elusive.
Given the long-term impacts of the gender pay gap, women can’t afford not to understand its role in her own life and learn how best to address it.
