Slow progress on salary, super for Aussie women
The workforce participation, rates of pay and board representation of Australian women slipped back slightly in the first half of 2018, a study has shown.
Australian women are progressing – though it's slow going, and the improvement is only visible if you view the data in isolation. Really, we're taking one step forwards, and two steps back.
After leaping ahead in the three months to December 2017, women suffered a disappointing setback from March 2018, when the index dropped sharply.
The numbers failed to fully recover by June 2018, increasing just 3 basis points (0.3 per cent) to 111 points, but remaining 2 percentage points lower than the December quarter, according to the latest Financy Women's Index.
Source: Financy, June 2018
Now in its second year of reporting, the study tracks and benchmarks the economic progress of Australian women. It draws on data from the annual reports of more than 700 companies and various organisations including the Australian Bureau of Statistics (ABS), Australian Tax Office, Australian Securities Exchange and Australian Institute of Company Directors.
What caused the drop?
A decline in workforce participation and women on top boards, according to Financy, with blame being placed on the mining sector. Although mining is the best paying sector for women, over the past six months it has employed 6,000 less women and added 17,000 men, the report said.
A slight increase in the number of women represented on ASX boards – top 20 by market capitalisation – and employment growth in full-time jobs helped the index rebound somewhat between March and June 2018.
The number of women represented on boards increased slightly in the six months to June 2018, but still lags the December quarter.
Despite the fall in the first half of 2018, the Index is up 1.4 per cent on this financial year.
“While it’s pleasing to see that the Financy Women’s Index recovered a bit in the June quarter and remains in a rising trend, it's disappointing that it remains down from its December high, not helped by a setback in women in board positions,” says AMP Capital chief economist, Shane Oliver.
Oliver believes improving the position of women in the economy is critical from a social and ethical point of view and to support economic growth. "Greater female participation in our economy can help soften the impact of the aging population. And perhaps even more importantly a more gender diverse economy will be a more productive economy."
Women on top boards
Women now make up 30.2 per cent of board positions in Australia's top 20 companies (by market capitalisation), 1.9 percentage points less than in December quarter.
Multinational insurance company Insurance Australia Group (ASX: IAG) and Commonwealth Bank (ASX: CBA) both added more women to their company boards this quarter.
Mining and metals company South 32 Limited (ASX: S32), whose board comprises of 30 per cent women, was added to the top 20 list, ousting QBE Insurance Group (ASX: QBE).
The three high profile board loses at AMP Limited in the wake of the Banking Royal Commission were not recorded in the index as it too lost its place in the top 20.
Of the top 20 companies included in the index, 16 companies including Woolworths (ASX: WOW) and CBA have met or are exceeding the 30 per cent board member target set by the Australian Institute of Company Directors. Westpac (ASX: WBC) and Rio Tinto (ASX: RIO) are currently below the target. In fact, Westpac currently has more men named Peter on their board than women.
Super savings gap narrows
On the upside, female superannuation savings are finally starting to catch up – albeit slowly.
According to AustralianSuper, Australia's largest superannuation fund, the average female member has about 30 per cent less in superannuation at retirement than the avergae male member. This represents a steady decrease in the last four years, from 32 per cent in 2014.
Analysis of AustralianSuper’s members shows the average woman retires with $87,486, compared $125,534 for men. This figure does not include the balances of women with self-managed super funds.
"Further work is still needed in the areas of equal pay, equality of opportunity and more equal sharing of family responsibilities to close the gap, which results in too many women having insufficient savings to fund a comfortable retirement Commenting on the gap," says Rose Kerlin, AustralianSuper group executive.
Women at work
A rising level of workforce participation for women is a key reason for the narrowing of the superannuation gap. The number of women working full time bounced back to a record high in the second quarter of this year, after faltering in the first quarter.
ABS data shows 3.14 million women are in full-time work, up from 3.12 million in the March quarter. The female participation rate is now 60.5 per cent, edging closer to the total male participation rate, which stands at 70.9 per cent.
The healthcare and social assistance sectors remain the biggest employers of women. Five industries, including construction, manufacturing and electricity, gas, water and waste services all saw more women joining the sector.
However, women are still earning on average $255 less than men across all sectors, though the national gender pay gap has improved slightly. The gap between male and female salaries reduced to 15.27 per cent in November 2017, from 15.31 per cent in May 2017.
The industry with the highest pay disparity is financial and insurance services, with a gap of just over 26 per cent. On average, women working in this sector earn $1,572 per week, compared to $2,126 for equivalent male salaries.
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Emma Rapaport is a reporter for Morningstar Australia
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