Gender (in)Equality and COVID-19

Gender Pay Gap is an area where significant challenges remain in achieving Gender Equality. According to WGEA’s latest gender equality scorecard released today, Australia’s full-time base salary gender pay gap is 15% with women earning on average $15,144 per year less than men⁴. When total remuneration is considered, the gender pay gap is even greater at 20.1%. Gender pay gap is influenced by a number of factors including discrimination and bias, under-representation of women in senior roles, and women spending a greater amount of time doing unpaid caring and domestic work. Unlike the UK, where gender pay gap reporting was made compulsory in 2017 for companies with more than 250 employees, disclosure is not mandatory in Australia and the majority of ASX300 companies do not disclose pay gap. A Harvard Business Review⁵ study published in 2019 found that in companies with mandatory disclosure the gender wage gap shrank.  In the UK, the pay gap has fallen from 18.4% in 2017 to 15.5% in 2020⁶. Consequently, as one of our 2030 absolute targets, we are advocating for all companies to publish a pay gap for all employees of less than +/- 5% by 2030.

Source: WGEA

The availability of reliable and consistent data poses a major challenge to achieving these gender goals. A number of organisations report gender-related data across ASX200 companies. However, ASX300 data around both gender representation and pay gap is not readily accessible. In response to this, Melior built a Proprietary ASX300 Gender benchmark which enables us to track progress towards the gender representation target by reporting on the percentage of women in executive leadership⁷ and board positions. We now plan to extend our gender benchmark to also include pay gap data.

In terms of gender representation, our FY2020 benchmark shows year-on-year improvement. The benchmark found that the percentage of female employees across the ASX300 remained relatively stable at ~40%. However, female representation on executive teams improved from 23% in FY2019 to 25% in FY2020. The percentage of female directors on boards also increased from 23% to 27%.

Source: Melior Research, WGEA data, company websites

This improvement is encouraging although female executive and director measures still fall short of Melior’s 2030 and Chief Executive Women’s (CEW’s) 40:40:20 target. Concerningly, CEW’s 2020 Annual Census of ASX200 companies found that the number of female CEOs fell to 10 (or 5%), down from 12 in 2019 and at the lowest level since the CEW Census began four years ago.

The impacts of COVID-19 have been and continue to be extensive affecting all sections of society, the economy, families and people’s ability to work.

The UN Department of Economic and Social Affairs describes how the COVID-19 global crisis is disproportionately affecting women and girls around the world:

• Women account for 70% of frontline health and social workers and are therefore highly exposed to the disease,
• Lockdowns implemented to curb the spread of the virus have increased instances of physical, sexual and psychological violence against women and girls, and have curbed access to essential sexual and reproductive health services, and
• Women who already spend around three times as many hours in unpaid domestic work as men, are bearing additional household burdens, such as caring and home schooling, during the pandemic⁸. We note that this figure is lower in Australia at around twice the number of hours, however this still demonstrates a clear unpaid work burden on women.⁹

A recent study from the Melbourne Institute¹⁰ found that women aged 18-24 are more likely than men to report losing their job due to COVID-19. This reflects women’s greater representation in industries most affected by the pandemic, such as hospitality, leisure and retail, and in insecure, casualised and low paid work, plus their increased caring responsibilities during the pandemic. Recent vaccine developments provide hope that there will soon be a recovery from the pandemic’s impact on female workforce participation but until there is a widely available vaccine, challenges and ongoing uncertainty will continue.

Source: The Melbourne Institute

SDG Subgoal 5.5 specifically targets representation of women in decision making roles. The SDG Report 2020¹¹ found that as of 1 January 2020, female representation in national parliaments globally is 25% and in Australia is 31%, which translates into under-representation of women in pandemic-related leadership roles. This is concerning as it is important that investments in gender equality are included in response and recovery legislation, economic packages and budgets during and after the pandemic.

On a more positive note, this year has seen the announcement of three important firsts for women being appointed into high-profile senior leadership positions which have the potential to influence pandemic responses. In September, Citi announced that Jane Fraser would become CEO in February 2021 marking the first female CEO of a Wall-Street Bank. And earlier this month, were the announcements of Nanaia Mahuta as the first female and Maori New Zealand foreign minister, and Kamala Harris as the first female, black and South East Asian US Vice-President.

It remains unclear what the longer-term impact(s) of COVID-19 will be on female workplace participation in Australia and around the world. The job losses and departures from the workforce due to increased caring responsibilities are deeply concerning. However, the requirements of employers to provide greater flexibility to their staff during the crisis may have positive effects by potentially encouraging more inclusive workplace policies and practices impacting all employees.

^{1https://www.mckinsey.com/mgi/overview/in-the-news/the-economic-benefits-of-gender-parity# https://www.imf.org/en/Publications/Policy-Papers/Issues/2018/05/31/pp053118pursuing-womens-economic-empowerment
2https://www.un.org/sustainabledevelopment/gender-equality/
3 In line with Chief Executive Women’s 40:40:20 target
4https://www.wgea.gov.au/data/wgea-research/australias-gender-equality-scorecard
5 https://hbr.org/2019/01/research-gender-pay-gaps-shrink-when-companies-are-required-to-disclose-them
6https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/genderpaygapintheuk/2020
7 Defined by Melior as CEO-1 positions
8https://wiw-report.s3.amazonaws.com/Women_in_the_Workplace_2020.pdf
9https://www.wgea.gov.au/sites/default/files/documents/australian-unpaid-care-work-and-the-labour-market.pdf
10https://melbourneinstitute.unimelb.edu.au/__data/assets/pdf_file/0004/3504613/ri2020n26.pdf
11https://www.sdgindex.org/reports/sustainable-development-report-2020/}

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