Progress towards financial gender equality has faltered for the second quarter in a row as the gender gap in the underemployment rate widened, the Financy Women’s Index (FWX) for the March quarter 2023 shows.
The FWX fell to 76.1 points in March, down from 76.2 points out of 100 in December as an increasing female underemployment rate, relative to male, took the shine off quarterly improvements in female monthly hours worked and greater gender diversity on ASX 200 Boards.
Bianca Hartge-Hazelman, founder of Financy, says that as interest rates have been climbing, so too has the female underemployment rate.
“The growing underemployment comes despite an all-time high in the number of monthly hours worked by women, helped by growth in female-dominated services industries such as Retail Trade, Education and Training and Other Services,” she says.
“We appear to be seeing a growing desire, or perhaps financial need, among women to work more hours but they are not able to fully achieve their employment requirements.
“Given that the gender gap in underemployment rate has widened in an environment of higher interest rates for the past two quarters, the risk is that this is not an aberration and that this may continue, resulting in higher female unemployment and a greater financial strain on women, particularly those on low incomes or single parent families.
“This would be a blow to the financial progress of Australian women and cement the view that they are the shock absorbers of high cost of living pressures, more than men. This could weigh on the annual pace of progress towards gender equality beyond the next June quarter,” said Hartge-Hazelman.
Will the May Budget help gender financial equality?
Dr Shane Oliver, chief economist AMP Capital, said he would have liked to have seen more in the Federal Budget to improve gender equality in a fundamental way.
“Paying super on paid parental leave or – even better – measures to encourage more women into courses that lead to higher pay, would be considered fundamental,” he said.
Natalie Previtera, Acting CEO, NGS Super noted that while Australia has made some big strides on the journey towards financial equity for women, there is a long way to go.
“Super on paid parental leave, access to affordable childcare, more flexible working arrangements for all genders, a greater emphasis on workplace cultures that supports both parents taking on caring responsibilities as well as greater transparency in wages, are some of the barriers we still need to crack,” said Ms Previtera.
Professor Roger Wilkins, Deputy Director of the HILDA Survey, said: “Overall I think Labor is doing quite a bit and has flagged further measures going forward, such as improving the child support system and working to reduce domestic violence.
“That said, I’m not convinced the announced changes to Parental Leave Payment (and removal of Dad and Partner Pay) are positive for women. I think they will end up (unintentionally) reinforcing the notion that parenting is women’s work. To break the cycle, we probably need parenting benefits that only fathers can access – which superficially seems counterintuitive,” he said.
The outlook for gender equality timeframes in Australia
Progress is slowly happening, with the biggest challenges in those areas affected by persistent gender norms such as Education and Unpaid work.
Chart: Changes in years to financial gender equality
Source: Financy Women’s Index March 2023
Ms Hartge-Hazelman says that Education (and Expected Earnings) has a worrying time frame to equality, of 139 years.
“Why? The fields of study selected by women are less linked to higher potential earnings and the pace of change in this area is extremely slow moving,” she says.
“139 years to achieve timeframe to equality in the education fields women chose is alarming,” said Annick Donat, CEO of Clime Investment Management.
“Many of these qualifications shape the future of human lives for generations such as nursing, teaching, childcare, and yet they hold less financial ‘value’. How we measure value needs a new perspective,” said Ms Donat.
Looking at the other areas measured by the Index, the median timeframe to equality is represented by the Gender Pay Gap, at 24 years.
This is a slightly worse result than the 22 years in the December 2021 quarter. However, the recent improvement in the gender pay gap to 13.3 per cent from 14.1 per cent in the December quarter provides hope that this should start to come down if that change continues.
Unpaid Work has a time frame to equality of 44 years in 2021, as reported in 2022, down from 59 years in 2020. The improvement is due to men increasing their unpaid work hours, but for women there’s been no change.
The time to equality in Underemployment also worsened in the March quarter as the underlying gender gap widened. It rose to 20 years, up from 18.5 in December 2022.
Superannuation experienced a reduced time frame in the gender gap of median lifetime balance, down to 19 years, from 33 years based on the latest reportable data which captures the 2019 financial year.
Employment improved the time to equality, helped by those improved monthly hours worked by women. Time to equality fell to 27.5 years in March, from 28 years last quarter.
Board Leadership is the best performing area and equality is expected on ASX 200 boards by 2030. The number of women appointed to ASX 200 directorships rose to 36 per cent in the March period compared to 35.5 per cent in December 2022.
Key Facts:
· 76.1 points – The Financy Women’s Index (FWX) slipped 0.1 point in the March quarter 2023 amid cost of living pressures and marking yet another setback in progress to gender financial equality.
· 5.8-year wait for equality in Board leadership – Improvement in the March quarter, with women now accounting for 36 per cent of ASX 200 board directors.
· 20-year wait for equality in underemployment – Timeframes increased with fewer Australian women working to their desired potential in March quarter 2023.
· 24-year wait for the gender pay gap to close – Unchanged since December 2022 quarter.
About us:
The Financy Women’s Index TM (FWX) is a quarterly measurement of the economic progress of women and timeframes to gender equality in Australia. The FWX is produced by Financy, which is a media company covering gender equality, DEI and ESG issues and a provider of purpose-driven tech such as the Impacter. The Index is supported by an Advisory Committee which includes Dr Shane Oliver, Simone Cheung, Roger Wilkins, Leonora Risse, Bruce Hockman, Rhiannon Yetsenga and Nicki Hutley. The Index is proudly sponsored by Clime Asset Management, NGS Super, the Ecstra Foundation, Aspire Planning, Seven Consulting, Bespoke Co and PritchittBland Communications. Financy initiatives are also made possible with the partnership support of Tech For Good Group Pty Ltd and the University of South Australia’s Centre for Workplace Excellence.
