Gender wage gap in Australia 'costs $93b' per year

15 March 2010

The National Centre of Social Economic Modelling (NATSEM) has recently released its report – The impact of a sustained gender wage gap on the Australian economy – highlighting wage discrimination in Australia.

The report shows that the gender wage gap costs the Australian economy $93 billion annually in productivity and most of this wage disparity is attributed to simply being a woman.

The NATSEM report, based on two decades of wage data from the Australian Bureau of Statistics, reveals a 17% gap between men and women’s pay which is equal to 8.5% of gross domestic product (GDP).

Micro-economic modelling was used by the report’s authors in determining that 60 per cent of the wage gap between men and women was attributed to the gender factor with industry segregation being the second largest factor, attributing to 25 per cent of the gender wage gap. Segregation demonstrates that some industries mainly employ males whilst some other industries mainly employ females.

The report found that the wage gap resulted in less incentive for women to work costing the country $93 billion annually equating to 8.5% of GDP per year.

The Australian Services Union has recently launched a gender pay gap test case with Fair Work Australia, which focuses on the low pay rates endemic in the female dominated community services sector, arguing that pay rates for women in this sector should be aligned with pay rates in similar male dominated industries.

Julia Gillard, the Australian Federal Workplace Relations Minister said “it was in the long-term interests of this nation to sort this issue out and for us to have a community and social services sector with an appropriately dealt with, highly professional workforce".