‘Choice’ may be seen as the key word when it comes to women and work, but there are other factors that play a stronger role in determining the financial status of women according to a new report.
The research by The Australia Institute found that women retire with substantially less savings than men, even if they don’t have children or care for elderly parents and stay in full time work.
“Despite more women participating in the paid workforce than ever before, on average, women have little more than half the superannuation of men at retirement age,” says the report’s author, Prue Cameron.
This does not take account of the significant proportion of women with little or no superannuation.
Using hypothetical case studies of four women in different occupations – a nurse, a lawyer, a finance analyst and a retail worker – the analysis shows that even for a woman with no children or no elderly parents to care for, women are at a disadvantage in their superannuation savings due to the gender disparity in pay rates.
“For almost two decades, the gender pay gap in Australia has remained around 17.5% - that is, for every dollar earned by a man, a woman earns 82.5 cents.”
Ms Cameron said that compared with men of the same age earning the same wage, the superannuation balances of the four case studies ranges between 44% and 88% less.
“There’s been a lot of discussion from prominent women like Julia Gillard and Julie Bishop about how women make choices which impact on other areas of their lives,” Ms Cameron said.
“The reality is that most often choice doesn't come into it. The fact that women continue to earn on average 17.5% less than men is not a result of their choices. Nor is the fact that many women continue to be the primary carers simply a matter of individual preference, but the consequence is that women end up poorer,” she said.
The report shows that inequality and income gaps tend to increase over time and become even more pronounced in older age groups. Across every educational level, women are worse off than men. For example, a woman aged 25 years with a postgraduate qualification can expect to earn two-thirds of that of a man with the same qualifications and may also earn less than a male with only Year 12 qualifications.
Once there are children, the disparity in lifetime earnings is even greater.
On the assumption that women are more likely to have children than not, and also tend to be the primary voluntary carer within a family, the financial disadvantage arising from the gender pay gap is entrenched further.
"The uncomfortable facts are that women earn less than men and spend more time out of the workforce caring for children and elderly parents.”
“All of these facts ensure that women will retire with less money than men and, bizarrely, receive far fewer taxpayer contributions to their superannuation than men."
The Australian Institute is of the view that various policy options to address the gender gap in wages and superannuation should be implemented.
“Closing this gap has everything to do with political will, financial investment in a range of policies and societal commitment to address this inequality and nothing to do with a woman’s ‘choice’.”
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