Women are at least 12 years from financial equality

ECONOMIC equality is unlikely to be achieved until at least 2031 despite women making record progress in the March quarter, according to the latest Financy Women’s Index.

The Women’s Index, which measures the economic progress of Australian women on a quarterly basis, rose 1.9 points to 122.7 points in the March quarter, up from a revised 120.8 points in December 2018.

The result reflects the fastest pace of women’s quarterly progress in two years, helped by record female full-time employment, workforce participation, improved educational enrolments and earnings growth relative to men as reflected in a record low of the gender pay gap.

Key results Financy Women’s Index March Quarter

• · The March Financy Women’s Index rose 1.9 points to 122.7 points.
• · The result was helped by record full-time employment, participation, tertiary enrolments and a record low gender pay gap.
• · Little improvement in women on ASX 200 boards and a lagging gender gap in superannuation weighed on the results.
• · Australian women are 34 percent short or on current trends, 12 years away – at the current rate of improvement - from achieving financial equality.

But when the March result is compared against the aspirational guide on economic equality, the FWX Progress Target of 161.6 points, it shows that women are 34 percent short or 12 years away from achieving financial equality. 

“We still have too many Australian women unable to realise their economic potential,” said the founder of the Financy Women’s Index, Bianca Hartge-Hazelman.

“Surprisingly, in a time of rising employment, there are women who are still underpaid and the female underemployment rate is worse than a decade ago.”

More women than men are enrolling in tertiary studies to better their qualifications but the overall gender gap in undergraduate salaries widened in 4.8 percent in 2018, from 1.8 percent in 2017.

Technical course areas, such as Information Technology, Mining and Engineering, which remain male dominated and generally higher paying, are becoming increasingly sought after by women.

“Its great to see that the latest issue of the Financy Women’s Index shows that women are continuing to make ongoing progress towards achieving financial equality with men," said AMP Capital head of investment strategy and chief economist Shane Oliver.

“Progress in educational attainment is a particularly good sign for the future but there is still a long way to go notably in terms of the pay and superannuation gaps to men and in underemployment,” he said.

The number of women in full-time employment hit a new high of 3.23 million in the March quarter, just as the female underemployment rate declined by 0.2 percent to 10.5 percent in January (versus 6.3% for males), from 10.7 percent in January 2018.

However the level of underemployment is worse today than it was in 2009 when the underemployment rate for women stood at 8.8 percent compared with 5.2 percent for men.

The number of women occupying ASX 200 board positions rose to 29.7 percent in February after a dip to 29.6 percent in January. However a disappointing end to 2018 appears to have affected the momentum seen earlier in support of gender board diversity.

Connie McKeage, CEO of Australian listed fintech company OneVue, said more needs to be done to support women who want to work, particularly those with children or caring for loved ones.

“I would encourage all employed persons considering starting a family, or who have started a family to stay engaged in the workforce.  Even if this means you are only available to work a few hours one day a week.

“As an employer for those employees unable to continue working for a period of time, particularly during maternity or paternity leave there is no reason these employees cannot be invited to log into staff updates, key presentations etc so that they continue to feel like a valuable team member.”

The sectors that recorded the biggest drop in their gender pay gaps in the March quarter are male-dominated and include Construction and Transport, Postal and Warehousing with respective declines of 2.6 percentage points to 12.5 percent and 2.1 percentage points to 15.7 percent.

Financial and Insurance Services and Health Care and Social Assistance, which is the most female dominated, continue to be the worst performing industries for the gender pay gap, which rose by 0.2 percentage points to 26.9 and 0.8 percentage points to 25.8 percent respectively in November.

“The financial sector holds the unenviable title of the least equitable for its mean pay gap of 26.9 percent,” said AFA Inspire national chair Kate McCallum.

“This is not a woman’s problem. This is a system problem. There are inherited systems and structures in financial organisations that simply don’t support women to thrive. 

"Most companies acknowledge this and are already doing some great stuff. The challenge is, we’ve been trying to eliminate the pay gap for years and it’s not budging. It’s time for bold moves.”

A lagging lifetime superannuation gender gap also held back the progress score. The average account balance for women is 34 percent less than that of the average man.

AMP Financial Planning adviser Dianne Charman said the Financy Women’s Index was an excellent tool to remind women of how important taking a proactive stance with their superannuation was for their retirement.

“Whether your retirement is close or quite a few decades ahead of you, everything you do today to be proactive about improving your financial position will mean you’ll forever thank your younger self,” she said.

Ms Charman said key super issues women should be thinking about were: salary sacrificing and after-tax contributions, exploiting the new rules around catch-up contributions and understanding the impact of different investment options within super.

About the Financy Women’s Index:

The Financy Women’s Index powered by Data Digger is an initiative designed to encourage women to live fearlessly by empowering them with insights to help them realise their economic potential. The Index is based on monthly, quarterly, biannually, and two-yearly data and methodology from the Australian Bureau of Statistics (ABS), the Australian Securities Exchange (ASX), the Australian Tax Office (ATO), the Australian Government Department of Education and Training and the Australian Institute of Company Directors.

The Financy Women’s Index differs from other economic measures, such as official wages and jobs data, because it focuses on women, whereas most of the headline data reported in the mainstream press reflects an average for the Australian population, but these figures are often skewed towards male outcomes as a result of a male dominated workforce. The Index is designed to highlight trends among working women; from the courses they study once they leave high school, to what industries they work in, whether they want to work more hours but cannot, their earnings and savings in superannuation, through to those occupying top company board positions. The Financy Women’s Index is an independent report, which is sponsored by Australian listed fintech company OneVue, AMP Financial Planning, the Association of Financial Advisers (AFA). It is also a partner of the Economic Security 4 Women.

https://financy.com.au

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