Research shows gender pay gap among minimum award wage workers
Women paid the minimum award wage earn 10 per cent less than their male counterparts, new research from the University of Melbourne has found.
In their working paper, Dr Barbara Broadway and Professor Roger Wilkins from the Melbourne Institute, Applied Economic and Social Research, used HILDA Survey data from 2008 to 2014.
While recent headlines have been dominated by workplace equality issues among our top earners, Dr Broadway said she and Professor Wilkins looked at the gender gap at the other end of the pay spectrum.
“Unlike market wages, the gap among minimum-wage workers cannot stem from employer discrimination, since everyone is being paid the minimum permissible rate of pay,” Dr Broadway said.
In 2016, almost a quarter of Australian jobs were paid award wages –most of which are set federally by the Fair Work Commission. At present, there are 122 federal awards, covering a variety of industries and occupations.
“We found award wages are systemically lower in jobs more commonly held by women. The higher the proportion of men within an occupation or industry, the higher the wages,” Dr Broadway said.
“For example, whether male or female, award-wage workers in the health care sector earn substantially less than similarly-skilled award-wage workers in road transport.”
Professor Wilkins said the gender pay gap could be reduced if minimum wages were neutral with respect to the gender composition of jobs, but it is not clear why they are not.
Sound economic reasoning could be behind the phenomenon, as could simple prejudice.
“It is possible that minimum wages take into account employers’ capacity to pay higher wages, or that wages compensate for unfavourable characteristics of jobs such as their dangerousness or dirtiness. If these play a bigger role for jobs typically held by men, that could justify some of the gap we see,” Professor Wilkins said.
“But these explanations are only partially convincing. For example, carers on award wages, who are disproportionately female, perform physically demanding jobs, but earn 13 per cent less than mostly-male truck drivers on award wages.”
Professor Wilkins said greater transparency about how minimum wages are set could improve the public’s confidence in the award wage system.
“It is currently unclear what is driving the differences in the Fair Work Commission’s award rates across industries and occupations,” Professor Wilkins said.
“This leaves room for the possibility that there is an unfair undervaluation of ‘women’s work’ grounded in prejudice rather than sound economics.”