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Monday, December 04, 2017

By award. 'Fair work' gives women less than men

The Fair Work Commission is itself responsible for much of the gap between male and female wages, a landmark study has found.

The typical wage gap is 18 per cent, much of it due to decisions by employers paying men and women above the minimum wage. But a substantial gap – up to 10 per cent – is due to the minimum wage itself, which varies for different occupations and years of experience.

"At first glance, one might expect the gender pay gap to be zero among minimum-wage workers, since by definition they are all being paid the minimum wage," said Barbara Broadway, one of the authors of the Melbourne Institute study, to be released on Monday.

"However, there are in fact many different minimum wages in Australia. There are currently 122 federal awards, covering a variety of industries and occupations, and with each specifying numerous different minimums depending on things like the tasks and duties of the job and the qualifications and experience of the employee.

"This, combined with the fact that men and women differ considerably in the types of jobs they do, means that it is still possible for a gender pay gap to exist among minimum-wage workers."

The examination of 37,000 records from the Household, Income and Labour Dynamics survey finds that men hold 91 and 95 per cent of Australia's construction and road transport jobs respectively. Those paid the minimum typically get $22.58 and $20.43 an hour.

In contrast, women hold 79, 82 and 84 per cent of the retailing, accommodation and social services jobs. Those paid the minimum get between $15.67 and 18.27 an hour.

"Unlike market wages, the gap among minimum-wage workers cannot stem from employer discrimination, superior negotiating skills of men, or higher productivity of men, since everyone is being paid the minimum permissible rate of pay," Dr Broadway said.

"But is not immediately clear whether this job-femaleness penalty can be interpreted as discrimination.

"In principle, the job-femaleness penalty could result from the commission taking into account factors other than the required skill level, such as 'dirtiness' and 'danger'.

"However, this argument seems less compelling in a comparison of, for example, the average wage for truck drivers ($21.65) with that of hospitality workers ($15.97), where the latter group of employees would often perform physically demanding work in hot and/or loud environments."

The study concludes that the most likely explanation for the apparent discrimination is that the commission has been indirectly influenced by historical perceptions of what is "appropriate".

"Male-dominated fields might have benefited from a long history of strong unionisation that led to higher average wages – a history not shared by service jobs," the study says.

Nevertheless, it finds that the Fair Work Commission's decisions are far fairer than those made outside the commission. For jobs that require university education, the commission appears not to discriminate at all.

Some of the discrimination against women subject to Fair Work awards isn't the result of the awards themselves.

Men are more likely to be paid above the award – 87.6 per cent compared with 81.5 per cent – and the women forced to rely on it are likely to have had better education and more work experience than the men who rely on it.

"Women might be 'pushed' on to award wages, whereas comparable men are more likely to receive an individually or collectively negotiated (and higher) wage," the study says.

Awards are also structured so that wages increase faster for each year of experience in male-dominated jobs than in female-dominated jobs.

Virginia Haussegger, director of the gender equality initiative 50/50 by 2030 Foundation at Canberra University, said the figures confirmed what many women already knew.

"It shows the gender pay gap is entrenched, multi-factorial, and is not easily bridged," she said. "Fixing it involves looking beyond the numbers in awards to the weightings given to work itself."

The female penalty

Accommodation (82 per cent female): Average award wage $15.67 per hour

Retailing (79 per cent female): Average award wage $16.61 per hour

Social assistance (84 per cent female): Average award wage $18.23 per hour

Residential care (90 per cent female): Average award wage $19.82 per hour

Road transport (5 per cent female): Average award wage $20.43 per hour

Construction (9 per cent female): Average award wage $22.58 per hour

Source: Probing the Effects of the Australian System of Minimum Wages on the Gender Wage Gap, Barbara Broadway and Roger Wilkins, Melbourne Institute Working Paper, December 2017

In The Age and Sydney Morning Herald