Drinking ‘daughter water’ won't be enough to deliver pay equity

The Workforce Gender Equality Agency (WGEA) has launched a campaign to send “daughter water” to the CEOs of approximately 3,000 companies who have reported to the Agency that they haven’t done a gender pay gap analysis. The aim is to raise awareness of the problem of pay inequity and make taking action a priority.

In the campaign, “daughter water” is a fictional fertility aid to help the CEOs have daughters, as there is evidence companies in which CEOs have daughters have lower gender pay gaps – presumably because they begin to understand the injustices their own daughters will face in the workforce.

The campaign is timely as the pay gap in Australia has begun to increase again, with data from May 2014 showing it had widened to 18.2%, a larger gap than we have seen since before 1995. Although it has been suggested that gender pay equality could be achieved in 75 years, the recent rise in the pay disparity suggests gender pay equity may never be achieved unless stronger steps are taken.

As the number of women who are the main breadwinner of their families increases, the pay gap relegates their families to lower incomes and resources for the same effort. The gender pay gap also means,for example, that women pay disproportionately for their education, as they derive less benefit from it than men with comparable qualifications.

Seeking new ways to address the problem

Voluntary attempts to deal with the causes of pay inequity have been in operation for many years, with little progress. Australia has had equal employment opportunity laws since the mid 1980s, and yet the problem has persisted and is now growing again.

Because the WGEA has no enforcement powers, its only power is to encourage companies to act on the issue voluntarily. The Workforce Gender Equality Act was recently changed to allow the setting of minimum standards against which employers (of more than 100 people) could be assessed, but the standards set by the Minister for Employment Eric Abetz earlier this year are so minimal that they require no change at all from most companies. Any organisation that has a policy relating to discrimination and harassment at work, a basic protection against liability for discrimination and harassment, already meets the minimum standard.

The “daughter water” campaign is intended to encourage companies to undertake their own pay equity audits so they can make their own adjustments. Unfortunately encouragement alone is a weak tool for bringing about change in such a challenging area. Pay inequity advantages employers, who get cheaper employees, and men, who may get pay entitlements above those of women co-workers. Understandably, they may be reluctant to change this situation, and exhortations to do the right thing may not fall on receptive ears. However this injustice to working women cannot be ignored and requires much more effective steps to be taken.

The case for change and pay transparency

One reason employer action is needed is because of the way gender role stereotypes hinder women and help men. Among the components of women’s disadvantage at work are gender norms that identify leadership and ambition, and valuing pay as a measure of worth, as male characteristics. A woman who shows interest in these is acting contrary to the gender norm and is likely to be regarded as unfeminine and unlikable, which itself can impede her ability to advance at work.

Women are penalised for acting in their own interests rather than being altruistic and caring about others; this de-legitimises competition and negotiation for women. A man who does this is acting consistently with masculinity stereotypes and regarded as having valuable traits of ambition and confidence. Individual women cannot overcome the pressure these gender roles exert, changes are needed from employers.

A case has been made for pay transparency as an important factor in redressing the undervaluation of women at work. Pay transparency is one of the main reasons the pay gap is lower in the public sector, where pay rates tend to be more public and standardised. In the private sector employers may actively discourage pay transparency, for example by including pay confidentiality terms in employment contracts.

Where pay is secret, women may not realise for years that they are being paid substantially less than men doing the same job, or even men they were supervising. Pay secrecy facilitates employers and male co-workers benefiting from the underpayment of women. Not surprisingly, employers are highly resistant to the idea of publicity for pay data. Publicity can be a powerful weapon, although on its own it may not be sufficient.

There are moves towards pay transparency in several countries including the UK and New Zealand. Pay equity was a founding principle of the European Union, and is included in a Directive that requires all member countries to have effective legal protection.

The Equality Act 2010 (UK) contained a provision that would make unenforceable a contractual term that prevented a person from asking a colleague about their pay for the purposes of checking pay equity, but it has not been brought into effect. However, the UK Employment Tribunal has recently been given power to order an employer to conduct a pay equity audit and publish the results if it is found liable in a claim under the UK’s Equal Pay Act.

In the US, President Obama supports the Paycheck Fairness Bill, which includes several measures requiring employers to address gender pay differentials, including reporting any required pay data to the Equal Employment Opportunities Commission to enable it to detect breaches of the Equal Pay Act. The US Senate has rejected the Bill on several occasions this year, and instead, the President has issued an Executive Order requiring all federal contractors to publish wage data by gender and race to ensure compliance with equal pay laws, and prohibiting retaliation by contractors against employees who share pay information.

Australia has undertaken obligations under international conventions to take action to ensure women are paid equally for work of equal value. It is time for these obligations to be taken seriously.

I hope the “daughter water” campaign brings about the needed change, but in an environment where the pay gap is increasing, it’s likely that stronger measures will be needed to make an impact on the problem. Otherwise this injustice will continue to affect future generations of women workers, the daughters perhaps of CEOs, but of the rest of us as well.

Beth Gaze receives funding from the Australian Research Council