The Carer Pay gap
In Julia Lessing’s recent post, she analysed the likely reasons for the gender pay gap between men and women, and concluded that based on available evidence, at least some of it is due to discrimination. But what else is behind it? This week’s post looks at the Carer Pay gap – a gap in pay that currently disproportionately impacts women.
What (non discrimination) factors contribute to the gender pay gap?
Last week, we looked at the KPMG report on the gender pay gap.
After sex discrimination, the other factors (such as part-time work and employment gaps) contribute to the remaining gender pay gap. Last week’s article prompted comments and observations from several male actuaries who noted that if sex discrimination is a contributor to the actuarial gender pay gap, they believe this is not a result of conscious discrimination. Suggestions for the underlying causes of the observed pay gap include men being prepared to work harder, or longer hours, as well as men having a higher propensity than women to negotiate higher remuneration or bonuses.
This insight, combined with the KPMG analysis, makes me wonder whether some of the gender pay gap could also be classified as the “carer pay gap”. Are men, on average, more willing and able to work longer or harder because they see their role in the family as the breadwinner? Is this possible because they have a partner (probably a woman?) at home managing the caring responsibilities? Are men more willing to negotiate for better remuneration because they see that as part of their role as the family breadwinner? If these hypotheses are true, is it possible that some of these factors may even be acceptable to Australian men and women? Let’s consider some current statistics about Australian families.
While we are observing increasing rates of workforce participation amongst Australian mothers, Australian culture still currently favours a domestic arrangement where mums stay at home and dads work. A 2013 study shows that the 83% of mothers with children aged 0 – 11 who are not working cite reasons related to family or preference for not working. Only 11% of these mothers suggested their decision not to work related to finances (either their partner earning enough, or the financial implications of childcare).
Jobless mothers’ and fathers’ reasons for not working, by age of youngest child, couple families with children aged 0-11 years, 2006-10
Note: Parents could nominate more than one reason for working. Data are reported for parents who are unemployed or not in the labour force.
Of those families where both parents are employed, the most common configuration is one parent working full-time and the other working part-time (see below). This information, combined with the WGEA statistics quoted above, suggests that women are more likely to be employed part-time than men.
Note: Excludes parents with labour force status or hours not stated. Parents who are “away from work” are employed, by definition (see Table 2). “Jobless” includes unemployed and not in the labour force. Percentages may not total exactly 100.0% due to rounding.
Source: Australian Population Census, ABS, various years (custom data reports)
In fact, fellow Actuary Nicolette Rubinsztein, in her recent book Not Guilty, extolls the virtues of women working part-time while raising a family, suggesting that this is the ideal way for mothers to manage their careers.
So while the KPMG analysis shows that commonly held beliefs such as part-time work and interruptions to working years do contribute to the gender pay gap, these may be related to preferences of Australian families. If this is the case, we may not see gender pay parity at an aggregate level until we have equality of caring responsibilities at home and equal numbers of men and women in similar roles in all industries. To properly understand the gender pay gap, we need a measure that allows for this. Perhaps average salaries in each industry, based on similar roles and adjusted for tenure, would show a more useful comparison than a single aggregate measure.
What about non-financial benefits of work?
The figures above give us an indication of the typical family arrangements in Australia. Personally, I have worked full-time as the primary breadwinner for most of my 17 years of motherhood. The importance and focus I have placed on the financial benefits of work have been far greater than most other mothers in my circles who are not the family breadwinners. While the financial benefits are important to those women, they often place higher value on the non-financial benefits of their employment, such as having part-time work that fits around their kids or having a job that doesn’t expect significant overtime or taking work home. Often they are reluctant to ask for a pay rise, or decline promotion opportunities as they don’t feel they could take on additional responsibilities at work. Others are resigned to the fact that the pay scale in their female dominated industry (e.g. teachers, nurses) is based on tenure rather than performance, and therefore their remuneration is not up for negotiation anyway.
This concept is not restricted to women alone. Recent employee research, including the 2012 HR Beat survey suggests that employees, particularly “millennials”, want more than just financial remuneration in return for their time at work. Today’s employees want flexible working hours, training and mentoring from their jobs. We must consider the full range of factors, beyond financial benefits, that people value at work.
Is a “carers pay gap” reasonable?
So how do we reasonably reward people who are taking on carers roles? Mandatory pay scales? Tenure based pay rises in all industries? I suspect this would not be palatable to many workers. If some of the drivers of the gender pay gap relate to the preferences of Australian families, we may never observe perfect gender pay parity by the definition currently used. At best, we will need to allow for some of the differences such as time out of the workforce.
Some aspects of our workplace culture, such as rewarding workers who are willing and able to work very long hours, combined with our typical family structure where fathers work full-time as main breadwinners and mothers work part-time while balancing caring responsibilities, may also contribute to an observed gender pay gap.
Consideration should also be given to non-financial benefits of work, such as flexibility and industry preference, if these are considered by individuals as a fair trade-off for lower financial remuneration.
In my last article, I found substantial evidence for a gender pay gap that cannot be explained by preferences or caring roles. This article shows that women are much more likely to take on caring roles, and hence be in parts of the workforce (part-time, gaps in employment etc) with reduced pay.
However, on a like-for-like basis, people should be paid fairly for their work performed, irrespective of their gender. It appears that the direct and indirect sex discrimination in Australian workplaces means we still have a way to go before we achieve gender pay parity in Australia.
See the original article on Actuarial Eye here.
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