Achieving economic equality is not just about numbers, it’s about thinking big and painting a picture of what equality actually looks like and the value it will bring to Australian women, men and the nation.
The latest Financy Women’s Index (FWX), which measures the economic progress of women on a quarterly basis, has set an aspirational target for economic equality - an Australian first for economic index benchmarking.
"If the current pace of economic progress of Australian women continues, equality could be achieved in about 10 years’ time.”
But defining equality is not simple.
In thinking about full-time versus part-time employment, it’s critical to consider the importance of choice for both men and women. Even then, some might say the choice to work is heavily influenced by an assumed responsibility placed upon women more so than men.
As a tentative estimate, the new FWX Progress Target is based on no existing gender pay gap or superannuation wealth gap, balanced board gender diversity for the ASX200, equal workforce participation rates between men and women, higher full-time female employment and maintained tertiary education enrolments at current relative growth rates.
The Progress Target will undergo fine-tuning as Financy, along with members of the Women’s Index Advisory Committee, attempt to reflect deeper structural and cultural issues as well as predict future workforce and family trends.
It’s a big task but an exciting development.
The FWX will be able to be used to measure not just the progress that has been made in the past but also work yet to be done.
This is valuable for shaping future debate and helping maintain momentum on the range of issues measured by the Index.
As it stands, the latest FWX shows the Progress Target is about 37.5 per cent below being achieved.
If the current pace of economic progress of Australian women continues, equality could be achieved in about 10 years’ time. The annual pace of progress in terms of numbers reflects an average 4.3 point year-on-year gain.
In the September quarter, the FWX improved by 1.4 points to 126 points, from a revised 124.6 points in the three months to June 2018.
Some of the September progress highlights include record full-time employment of women at 3.16 million, a 20-year low in the gender pay gap at 14.6 per cent in May, from 15.5 per cent in November, and an increase in the number of women represented on ASX Top 200 boards.
Progress is, of course, encouraging.
However it’s somewhat meaningless unless we look at the end-goal as measured through the FWX Progress Target.
It is integral to maintain progress and that will take a whole lot of measures and actions which may or may not already be in place.
When looking at the gains in terms of improved female full-time employment growth, it’s clear attempts to get more women into the workforce are working.
The benefits of increasingly reducing the gender gap in workforce participation are significant.
Over the past decade, the male participation rate has fallen by 1.6 percentage points from 72.7 per cent in August 2008, while female participation has increased by 1.8 percentage points from 58.6 per cent.
A report by KPMG said if the participation gap were halved, gross domestic product (GDP) would be $A60 billion greater in 20 years’ time.
Continued focus on policy decisions which support women in the workplace, as well as improving the availability and affordability of quality childcare would greatly help with closing this gap.
There are also positives in the level of gender diversity on boards although there is more work to be done.
As it stands 28.5 per cent of ASX 200 board positions are occupied by women, up from 27.7 per cent in June, according to the latest Gender Diversity Progress Report by the Australian Institute of Company Directors (AICD).
There are 424 women holding positions on top 200 boards. Men hold 1063 board positions.
OneVue Managing Director Connie McKeage says discussions about important issues like inclusion and gender balance around board room tables and management need to continue, however the activity around these matters must also increase.
There are also signs that the superannuation gap between men and women may be closing, although in absolute terms the gap is still very substantial.
The country’s biggest super fund, AustralianSuper, reported the gap between the life-time retirement savings of men and women fell to 28 per cent at the end of the 2018 financial year, from 30 per cent in 2017.
AMP Financial Planning adviser Di Charman says the recent legislative change allowing people to “carry forward” their unused concessional contribution caps for up to five years was a positive measure for women.
“It will give women the opportunity to top up their super in years where they have more income and will help bridge the retirement gap,” she says.
Education data suggests wages and graduate salaries could be having an impact on the types of courses women study beyond high school.
Female engineering graduates are earning about $A1,500 more than male graduates on completion of their studies, and are enrolling in this field at more than three-times the pace of more traditional female-dominated courses like education.
Despite this, the average female graduate is still paid less than male graduates across all course areas.
Meanwhile mining and information media and telecommunications, which are among the highest paying sectors, stood out as having links to the fastest growing education pathways for women.
Health care and social assistance recorded the biggest gender pay gap increase of any sector, up 9.6 per cent to 25 per cent in May compared to 22.8 per cent in November.
The FWX has an important role to play in maintaining the momentum.
It can help to frame a discussion of the issues, provide facts, highlight the importance of ongoing progress and shape policy.
The Women’s Index will empower more women to become fearless in life by giving them timely information on the opportunities and benefits of enhancing their financial wellbeing.
Jo Masters is Senior Economist at ANZ and Bianca Hartge-Hazelman is the founder of the Financy Women’s Index.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
06 Jul 2018
08 Mar 2018