The mainstream media and even governments often talk about a gender pay gap or gender wage gap and imply that this exists as a result of systematic discrimination against women. The reality though is that we have a gender earnings gap and the reasons are well established. Studies by governments and private researchers have shown time and time again that men and women make a variety of different choices when choosing what to study, in what field to work, and various factors concerning how they work. These choices lead to differences in earnings. The largest such study is probably the CONSAD report commissioned by the US Department of Labor. The CONSAD Report naturally pertains only to the US labour market but its results are broadly applicable outside of the US and also agree with research from other countries. In particular the CONSAD report noted:
There are observable differences in the attributes of men and women that account for most of the wage gap. Statistical analysis that includes those variables has produced results that collectively account for between 65.1 and 76.4 percent of a raw gender wage gap of 20.4 percent, and thereby leave an adjusted gender wage gap that is between 4.8 and 7.1 percent.
This simply means that after adjusting for known factors a small gender earnings gap remains. The fact that such an earnings gap exists does not imply discrimination on the basis of gender. It merely shows that not all factors that impact earnings have so far been quantified. Future research may be able to further reduce this apparent earnings gap.
There have been quite a few high profile cases of companies initiating pay scale audits only to find little difference in earnings between men and women at the same level. For example, The Deloitte UK 2018 Gender Pay Gap Report in which Deloitte assessed its own gender pay gap states that:
Our analysis shows that the average mean gender pay gap within grade pools is around 2.2%
Despite this, when reporting on Deloitte’s results, mainstream news sources focus on the 43% difference found when comparing all men and all women at Deloitte.
Some recent research suggests that gender differences in personality traits may explain some of this remaining difference, making any possible difference due to discrimination smaller still.
Proponents of the gender pay gap also often ignore research which shows that young childless women in large US cities are out-earning men.
An ongoing problem when discussing the gender earnings gap is the propensity for those arguing for a gender pay gap to conflate different alleged problems. We often see different problems discussed together, while they are actually entirely distinct. These problems often include:
- Claims of gender discrimination in a like-for-like comparison.
- Claims that women are shepherded in to lower paying roles.
- Claims that traditionally female roles are paid less.
The latter two claims, while initially appearing to be similar, are quite distinct. If proponents of a gender pay gap believe the latter two are genuine concerns they need to make it clear that there is no evidence of widespread gender discrimination in earnings in a like-for-like comparison.
A few months ago I wrote an email to the Workplace Gender Equality Agency (WGEA) in my role as the president of the Australian Men’s Rights Association Inc (AMRA). The WGEA is a a federal Australian government statutory agency that is charged with promoting and improving gender equality in Australian workplaces.
Email to the WGEA
Hi (Redacted). I’d like to ask a question about media releases made by the WGEA.
The November 2016 media release includes the following statement:
“Note: A gender pay gap is the difference between the average male full-time
earnings and average female full-time earnings expressed as a percentage of
male earnings. We calculate gender pay gaps across the data set by industry
and by manager and occupational categories, excluding CEO salaries. The
Agencys gender pay gap data does not reflect comparisons of women and men in
the same roles (that is, like-for-like gaps).”
This statement or anything like it is missing from the November 2017 scorecard.
Could you please confirm whether or not it is still the position of the WGEA
that the agency’s gender pay gap data does not reflect comparisons of women
and men in the same roles (that is, like-for-like gaps)?
I’d like to have permission to publish your response online.
Australian Men’s Rights Association Inc.
(Contact details redacted)
A few days later I received the following response from the WGEA. The response arrived as a Microsoft Word file attached to a reply email. The original is held on the AMRA Inc. website and is quoted here. Comments are interspersed.
Response from the WGEA
Response to Robert Brockway, President, Australian Men’s Rights Association Inc
The national gender pay gap figure calculated by the Agency is the difference between women’s and men’s average full-time base salary earning, expressed as a percentage of men’s earnings. It is a measure of women’s overall position in the paid workforce and does not compare like-for-like roles.
Well, there you have it. WGEA clearly states that the often-quoted national gender pay gap does not compare like-for-like roles.
As of February 2019 the WGEA is reporting the national gender pay gap as 14.1%.
This should not be confused with the gender pay gap (full-time total remuneration) which is the difference between men’s and women’s total remuneration, expressed as a percentage of men’s total remuneration.
The Gender Equality Score Card for November 2017 puts the gender pay gap (full-time total remuneration) at 22.4%.
This explanation was included on page 8 of the Agency’s 2016-17 gender equality scorecard released in November 2017 and in the accompanying media release.
However, the Agency’s work with employers shows that when they conduct a gender pay gap analysis, they can uncover like-for-like pay gaps between women and men working in the same or comparable roles.
This has never been at issue. Such as in the case of Deloitte mentioned earlier most audits find a small difference in gender earnings in a like-for-like comparison. Actual like-for-like differences still don’t indicate the presence of gender discrimination.
These analyses can also reveal an organisation-wide pay gap. This is the difference between the average remuneration of women and the average remuneration of men across an entire organisation or department. This gap usually reflects the lack of women in senior management and high-paying roles in an organisation, especially leadership, technical and specialist roles, and the over-representation of women in lower-paid roles.
Although Australian women have had the legal right of equal pay for work of equal value since 1969, evidence suggests that women are sometimes not paid the same amount as men for doing the same or comparable jobs.
When the beer brewer Lion undertook a gender pay gap analysis, for example, their leadership team was surprised when it revealed their company was paying men on average 3.2% more than women working in the same or similar roles. They moved quickly to close the gap for like-for-like roles by giving more than 1600 employees (950 women as well as 700 men, who had been paid slightly less than their female counterparts) a pay rise worth $6 million.
The example provided by the WGEA here shows a 3.2% gender earnings gap in a like-for-like comparison – very different to the gender pay gap of 14.1% or the gender pay gap (full-time total remuneration) of 22.4%. In addition, in this example, nearly as many men received pay raises as women.
What the WGEA has written here, of a small gender earnings gap, is not what they, the mainstream media or even government officials talk about when they make public statements concerning a gender pay gap. Rather the main talking point concerns earnings differences between men and women as a whole. This leads to a very distorted view of the gender earnings gap among the general population. By focussing on the national gender pay gap and the gender pay gap (full-time total remuneration) rather than like-for-like comparisons the WGEA is contributing to this widespread confusion among the populace.
You can read more about Lion’s pay gap analysis at:
Another company that closed its like-for-like gender pay gap was Energy Australia. In March this year, the company announced that it would spend $1.2 million so that women and men with equivalent skills and experience would receive the same pay for doing the same job. Around 350 women had their pay increased through a salary review and, in some cases, a one-off adjustment. About 80 men also had their pay adjusted following a review of Energy Australia’s employees who were not on enterprise bargaining agreements.
You can read more about Energy Australia closing its like-for-like gender pay gap at:
In a similar case the British Broadcasting Corporation (BBC) engaged an external agency to assess pay equity. The results of this independent audit of pay rates resulted in more men than women receiving pay raises.
I call on the WGEA, the mainstream media in Australia, and the Australian government to make it clear, in plain language, that:
- There is no evidence of widespread gender discrimination in earnings in Australia.
- The reasons for the gender earnings gap are well understood today as a result of research conducted in Australia and elsewhere.
- The gender earnings gap is largely a result of choices that men and women make.
My email to the WGEA and their response letter were produced in full here, with the exception of some personal details that were redacted.