Could gender pay gap regulations hurt women more than help them?

Welcome to Finance & Fury, the Furious Friday edition.

Today’s episode is all about the drive to equality.

A recent proposal by the Labour Government is to force equality through gender, and forcing companies to publicly disclose pay gaps between men and women.

Reporting differences in pay between genders Personally, I don’t like it as it further drives division between people I think it will actually hurt women more than help them

The Proposal

Companies with more than 1,000 employees will be forced to publicly disclose how much they pay woman compared to men. Companies that fail to comply will be excluded from competing for government work - this seems like blackmail for compliance! Companies already disclose pay gaps to the Workplace Gender Equality Agency as it is already illegal to discriminate and pay people less based on gender

Why is this happening?

The Wage Gap currently sits at about 15% or so, but this depends on how you interpret the numbers

Stats – What is an average? In 2016 the average female wage was 89% of the average male wage The median (middle number of average) female wage was 92% of the median male wage. This gap has remained relatively steady over the past decade (see Table 2.1).

The practicality of it

Will the analysis be multi-variant? Age and experience? – this will impact annual earnings Hours worked and time in the office What position and role in the company? The government doesn’t care about free market forces – it comes back to votes and control

Outcomes

Prime Minister Scott Morrison is concerned workplace conflict would be sparked if pay details were disclosed. Cost of regulations –
New government agency will need funding – from tax payers’ money More staff required for big companies which means higher salary expenses without increasing output – this destroys the free market What if a company has a wage gap?
SJW boycotts will cause trouble for companies, decrease of demand for their products, they may have to lay off workers to survive, and therefore go out of business Everyone loses their job – women and men alike. No winners.

Will it actually change anything? Will it help close the wage gap?

The most critical thing governments can do to boost women’s pay is to ensure the economy remains strong, and not divisive. The only thing any government can do is to create the right economic circumstances to be able to grow jobs

 

Why does the gap exist?

Let’s look at Industry Sectors and earnings

Breakdown - Occupation and industry have different averages

Mining is one of the highest for men
Western Australia has highest pay gap – 22.4% (Thanks to mining) This is due to dangerous work – 90-95% of deaths in workforce are men Get paid ‘risk premium’ – do women REALLY want to equalise that? Social work is one of the lowest for men
Lower incomes compared to Mining If it was only based on gender wouldn’t companies then only hire woman?
Companies are meant to be greedy – if this is true why don’t companies only hire woman?

 

This is an example of playing politics rather than being about actioning meaningful change.

The issue with politics today – politicians go for the easy vote – it’s a game

Why are politicians playing this divisive game?
This is dangerous – Telling 50% of the population that there is no chance for them is bad If you constantly hear that you are doomed to earn less, would you try as hard? Be wary of Government Agency claims – They need the gender pay gap to exist
Again, it’s a race to the bottom and unfortunately this is more likely to reduce everyone’s wage

Sweden is one of the most ‘equal’ countries and you see more woman going into non-tech related fields because it comes back to individual choices.

I encourage you, especially if you’re a female, don’t focus on the so-called “Gender Pay Gap”, “there’s no hope” etc. etc. …and instead focus on trying to improve yourself, increase your demand and try to get the best for yourself without buying into social engineering. We all have equal opportunity (there’s actually more women than men at university now)

Regardless of your gender – make sure you tune in to Monday’s episode 😊