Gender pay gap costing Australia $1.26 billion a week

Australia's gender pay gap is costing an estimated $1.26 billion per week, according to a new joint report examining the factors behind this persistent issue.

The report, titled She's Price(d)less, was released by KPMG Australia in partnership with Diversity Council Australia (DCA) and the Workplace Gender Equality Agency (WGEA).

It found that in 2023, men earned an estimated $45.57 per hour, which is $3.31 more than the $42.26 earned by women.

This difference translates to a 7.3% hourly gender pay gap, an increase of $0.26 from the gap between men's and women's earnings in 2020, according to the report.

"Analysis... shows that the pay gap between men and women is equivalent to $1.26 billion a week, or $65.8 billion per annum," the report stated.

Drivers of gender pay gap

The report identified the major drivers of the gender pay gap as:

• Care, family, and workforce participation (26%)
• Gender segregation in job type (37%)
• Gender-related influences (55%)

"The gender pay gap in this country remains persistent and pervasive, with the types of jobs women were employed in and the higher proportion of unpaid hours spent on household and caring responsibilities, the main contributing factors," said Dorothy Hisgrove, Head of People and Inclusion at KPMG, in a statement.

According to the report, care, family, and workforce participation costs the economy $331 million per week. This factor covers part-time work, unpaid work, as well as years not working due to interruptions.

When it comes to gender segregation, the report found that the lower rates of pay in occupations and industries where women were more likely to be employed costs the economy $460 million a week.

Gender-related influences, such as discrimination and recruitment biases, are costing the economy an estimated $688 million per week, the report added.

"These findings illustrate stark disparities in economic outcomes, and pave the way toward understanding how closing the gender pay gap for all women will require us to recognise and respond to the intersecting drivers of inequality," said Catherine Hunter, chief executive of the DCA, in a statement.

What can employers do?

Eliminating Australia's gender pay gap can take until 2054 to close based on average income growth between 2015 and 2024, according to the report.

But closing the pay gap will require the active participation of employers.

"Employers have an opportunity to drive productivity and meet employees' expectations of a fair, safe, and equal workplace by examining their own workforce data, finding areas of inequality, and taking evidence-informed action to address them," said WGEA CEO Mary Wooldridge in a statement.

"We know what works to improve fairness at work. Taking action to make that a reality can unlock significant economic growth for our nation, foster innovation and ensure we value all people at work."

The government has been introducing measures to close the country's gender pay gap, including making private sector employers to publish their pay gaps.

It is also requiring large employers to set and make progress on three targets to improve gender equality in the workplace.