Income Distribution: Differences in men's and women's earnings
Much of the difference between men's and women's earnings can be explained by the different hours that they work and the sorts of jobs that they do.
In 1969, the Commonwealth Conciliation and Arbitration Commission ruled that by 1972 Australian women should receive equal pay to men for equal work. In the 1980s, two acts, the Sex Discrimination Act 1984 and the Affirmative Action (Equal Employment Opportunity for Women) Act 1986, designed to improve women's situation in the labour market, were passed.
Despite considerable gains since the early 1970s, women in Australia still earn significantly less overall than men. In 1994, the ratio of the average weekly earnings of females and males was 0.67 for all employees and 0.81 for full-time employees. This means that among full-time employees, women earned on average 19% less than men. However, when considering the ordinary time earnings of adult men and women in full-time non-managerial occupations the difference decreases. Women earned 8% less on average than men in 1994 and 13% less on average than men in 1983 (female/male (F/M) earnings ratios of 0.92 and 0.87 respectively).
Many factors contribute to the difference in full-time earnings. These include rates of pay (including overtime payments), occupational and educational differences, age, and employment continuity.
FEMALE/MALE AVERAGE WEEKLY EARNINGS RATIO(a)
(a) Ratio of female to male earnings.
Source: Survey of Distribution and Composition of Employee Earnings and Hours
| Employees and earnings Adult employees are employees aged 21 or over or those aged under 21 who are paid at the full adult rate. Ordinary time earnings are an employee's payment for award, standard or agreed hours of work. They include over-award or over-agreement payments. Overtime earnings are payment for hours in excess of award, standard or agreed hours of work. Total earnings comprise ordinary time and overtime earnings. Female/male earnings ratio A common way of comparing the earnings of men and women is to simply divide female earnings by male earnings. The resultant ratio is 1 when the earnings are equal, less than 1 when men earn more than women and greater than 1 when women earn more than men. This ratio can easily be converted to a percentage difference. |
Rates of pay
Earnings can include base pay, over-award pay, commissions and bonuses, and overtime. In 1994, female full-time adult non-managerial employees earned on average less per week than their male counterparts from all these components of earnings. The base rate of pay for women was on average 6% less than that of men (F/M earnings ratio of 0.94). Average over-award pay was $4.80 for women and $8.70 for men. Average pay by measured results, piecework, bonuses and commission, was $3.00 a week for women and $10.50 for men.
Over-award pay and pay by measured result are added to the base rate of pay to make total ordinary time pay. Women earned 8% less total ordinary time pay than men and 6% less base pay than men. Women's lower ordinary time earnings were due to earning less over-award pay and less pay by measured results than men.
On average, in 1994 women earned $14.10 a week from overtime while men earned $64.40. Overtime adds to ordinary time earnings to make total earnings. Among full-time adult non-managerial employees women earned 15% less total average earnings than men (F/M earnings ratio of 0.85).
AVERAGE WEEKLY EARNINGS OF FULL-TIME ADULT NON-MANAGERIAL EMPLOYEES, 1994p
 | Women | Men | Earnings ratio(a) |
| Type of pay | $ | $ | ratio |
| Base pay | 535.90 | 569.40 | 0.94 |
| Pay by measured result | 3.00 | 10.50 | 0.29 |
| Over-award pay | 4.80 | 8.70 | 0.55 |
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| Total ordinary time | 543.80 | 588.60 | 0.92 |
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| Overtime | 14.10 | 64.40 | 0.22 |
| Total earnings | 557.90 | 653.10 | 0.85 |
Source: Survey of Distribution and Composition of Employee Earnings and Hours
Occupational segregation
Women tend to concentrate in different occupation groups from men. In 1994, 39% of female full-time employees were clerks, compared to 9% of male full-time employees, 16% were salespersons or personal service workers compared to 9% of men. On the other hand, women were under-represented among managers and administrators (6% compared to 13% of men) and trade occupations (3% compared to 20% of men).
Occupation is often dependent on educational qualifications. In general, better qualified people earn more. Currently, women represent about half of all tertiary graduates and students although there are still considerable differences in the fields of study that men and women choose (see Australian Social Trends 1994, Gender differences in higher education). These differences can contribute to the occupational segregation of the labour force.
In 1994, in all major occupational groups, men employed full-time had higher average weekly ordinary time earnings than women employed full-time. The least difference between men's and women's earnings was among para-professionals (this group includes registered nurses). Female para-professionals earned on average 7% less than their male counterparts (F/M earnings ratio of 0.93). The greatest difference between female and male earnings was among plant and machinery operators, and drivers. In this group women earned on average 23% less than men (F/M earnings ratio of 0.77).
In 1993, among full-time adult non-managerial employees there were only a few occupations in which women's ordinary time average weekly earnings were at least 5% more than men's. These included counsellors, librarians, home companions and aides, and automobile drivers (all 6%), and fork-lift and related drivers (10%).
The F/M earnings ratio can be adjusted (standardised) to compensate for the different distribution of men and women across occupation groups. When standardised, the F/M earnings ratio changes little, from 0.86 to 0.85. The overall effect of occupational differences on earnings differences is therefore small. While men are more likely than women to work in higher paying management occupations, they are also more likely than women to work in lower paying occupations (tradespersons; plant and machine operators, and drivers; and labourers and related workers).
In 1994, the average amount of over-award pay and overtime pay that women and men received varied considerably by occupation. Except for clerks and plant and machine operators and drivers, men earned more on average than women from over-award payments. Female plant and machine operators and drivers received 40% more over-award pay and female clerks 8% more than their male counterparts. Women earned less than men from overtime regardless of occupation. This is mainly because men worked more hours overtime than women. Only among salespersons and personal service workers were overtime earnings similar for men and women (a F/M earnings ratio of 0.97). For other occupation groups women's overtime earnings were considerably less then men's.
AVERAGE WEEKLY EARNINGS OF FULL-TIME ADULT EMPLOYEES, 1994p
| Full-time average weekly ordinary time earnings | | ||
| | | ||
| Women in occupation group | Women | Men | Earnings ratio(a) |
| Major occupation group | % | $ | $ | ratio |
| Managers and administrators | 22.3 | 719 | 912 | 0.79 |
| Professionals | 40.8 | 729 | 854 | 0.85 |
| Para-professionals | 35.3 | 659 | 708 | 0.93 |
| Tradespersons | 6.5 | 445 | 542 | 0.82 |
| Clerks | 71.2 | 512 | 574 | 0.89 |
| Sales and personal service workers | 50.7 | 486 | 594 | 0.82 |
| Plant and machinery operators, and drivers | 9.4 | 435 | 565 | 0.77 |
| Labourers and related workers | 23.9 | 417 | 478 | 0.87 |
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| All occupations | 36.0 | 562 | 652 | 0.86 |
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| Standardised for occupation(b) | . . | 551 | 652 | 0.85 |
(b) This is the overall full-time average weekly ordinary time earnings men and women would receive if there were equal proportions of men and women in all occupations.
Source: Survey of Distribution and Composition of Employee Earnings and Hours
AVERAGE WEEKLY EARNINGS OF FULL-TIME ADULT EMPLOYEES, 1994p
| Over-award payments | | | Overtime | ||
| ||||||
| Women | Men | Earnings ratio(a) | Women | Men | Earnings ratio(a) |
| Occupation group | $ | $ | ratio | $ | $ | ratio |
| Managers and administrators | 4.80 | 9.80 | 0.49 | 2.10 | 5.40 | 0.39 |
| Professionals | 3.00 | 5.10 | 0.59 | 8.40 | 17.80 | 0.47 |
| Para-professionals | 0.60 | 3.60 | 0.17 | 12.50 | 49.00 | 0.26 |
| Tradespersons | 3.60 | 15.50 | 0.23 | 19.10 | 78.00 | 0.24 |
| Clerks | 6.80 | 6.30 | 1.08 | 9.70 | 29.20 | 0.33 |
| Salespersons and personal service workers | 3.10 | 10.20 | 0.30 | 16.80 | 17.30 | 0.97 |
| Plant and machine operators, and drivers | 12.50 | 8.90 | 1.40 | 40.00 | 122.00 | 0.33 |
| Labourers and related workers | 4.30 | 7.00 | 0.61 | 26.40 | 69.90 | 0.38 |
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| All occupations | 4.70 | 8.80 | 0.53 | 12.60 | 51.60 | 0.24 |
Source: Survey of Distribution and Composition of Employee Earnings and Hours
Age differences
Some of the difference between women's and men's earnings may be due to the younger age structure of female workers. Women are under-represented in the older, higher paid age groups and over-represented in the younger, lower paid age groups. This is because there were fewer women in the labour force in the past and women have traditionally left the labour force earlier than men.
In 1994, for adult full-time employees, average earnings in their main job increased until about the age of 50 and then declined. However, at all ages, men's average earnings were greater than women's. The smallest difference in average earnings was among those aged 15-19 (F/M earnings ratio of 0.94) and greatest difference among those aged 45-54 (F/M earnings ratio of 0.74).
Educational differences may partly explain the greater difference in earnings between older men and women. In the past, the number of men with tertiary qualifications far exceeded that of women.
The earnings ratio can be standardised to the age structure of all employees. When standardised, the F/M earnings ratio increases from 0.80 to 0.82. This implies that only a small proportion of the overall difference in the main job earnings of full-time adult men and women employees can be attributed to differences in the age structure of male and female workers.
FULL-TIME EMPLOYEES(a), 1994
| Average weekly earnings | | Age distribution | |
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| Age group (years) | Women | Men | Women | Men |
| $ | $ | % | % |
| 15-19 | 286 | 305 | 5.0 | 3.9 |
| 20-24 | 452 | 485 | 19.4 | 12.3 |
| 25-34 | 567 | 640 | 30.0 | 28.6 |
| 35-44 | 570 | 744 | 23.1 | 27.2 |
| 45-54 | 542 | 734 | 18.2 | 20.0 |
| 55-59 | 507 | 652 | 3.3 | 5.1 |
| 60-64 | 519 | 617 | 0.9 | 2.5 |
| 65+ | 441* | 607 | 0.2* | 0.4 |
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| Total | 524 | 655 | 100.0 | 100.0 |
Source: Survey of Weekly Earnings of Employees (Distribution)
Continuity of employment
Women must often fit their careers around family responsibilities. This makes them more likely to work part-time than men. They may also have lengthy career breaks which affect their employment continuity and advancement prospects and hence the level they will attain within a particular occupation.
The Survey of Women's Employment Patterns, conducted in Adelaide in 1992, found that 55% of women who had been employed (in Australia) at some time since 1982 had had a break of 3 months or more from employment. 41% of women who said that their most recent change in employment had been a break of 3 months or more had taken the break either for the birth of a child or to care for children or others1.
Endnotes
1 Women's Employment Patterns Adelaide Statistical Division, November 1992 (6215.4).
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