So much for all that

Meg Smith

Firstly I would like to thank Rae Cooper and the Evatt Foundation and its supporters for the opportunity to bring to light the threat that the proposed legislative changes pose to current equal pay rights, and with it gender pay equity.

This evening I would like to focus on the mechanisms for equal pay as well as the phenomenon of equal pay itself. Despite opinion to the contrary, equal remuneration between women and men has not been won. The evidence of this is stark enough - the clear difference in full-time hourly earnings between women and men - and such a measure of course excludes more complex assessments that stem from women's greater concentration in part-time work, the limited career opportunities in part-time work and the evidence of the falling value of part-time work, relative to full-time work.

So what of our existing equal remuneration measures and why are they under threat?

Federal equal pay measures emerged from strong feminist and union campaigns in 1969 and 1972 and were to have immediate effect. The gender pay equity ratio increased from 60.6 per cent in 1970 to 74.6 per cent in 1981 - an increase of 14 percentage points over an eleven year period (full-time adult non-managerial employees in the private sector).

One of the strengths of the measures lay in the mechanism through which equal pay measures flowed. The mechanism was one of wage increases by way of collective industry awards, where a single application to vary meant that wage increases flowed automatically and immediately to women employed within the scope and incidence of a particular award. Thus Australia's comparable and relatively superior pay equity performance at this time arose from changes in legislation and wage determinations of industrial tribunals, rather than sudden and differential improvements in the human capital among men and women in a short period of time (Gregory, 1999).

Since that time, particularly from the early 1990s, the available federal measures have altered somewhat - as has the context in which they operate. The focus of institutional measures at the federal level has moved to the workplace. This has weakened the operation of the 1972 equal pay for work of equal value principle (which remains available to parties). Its operation as a means to reform awards is constrained by the operation of wage fixing principles, and the difficulties that confront unions in using a federal award as the basis of an equal pay claim.

At this juncture it should be remembered that awards remain significant for women - whereas 15.7 per cent of men have their wages set by awards, just under a quarter of women do (24.4 per cent). This figure rises to 34 per cent if we confine our gaze to women and men employed on a part-time basis (ABS, 6306.0).

Moreover, reform for women in paid work is immediately weakened if the available measures can only be accessed through claims at the individual workplace level.

It is the case, however, that since 1993 there has existed a federal legislative right to equal remuneration - the fate of which remains unclear. These provisions have been under-utilised and their central requirement - that applicants demonstrate that earnings differences have a discriminatory cause - has weakened the capacity of unions and industrial tribunals to address the undervaluation of women's work and to realise aggregate reform.

In addition to this weakness, access to the provisions to realise pay equity increases at the level of an industry award is highly constrained by the negative policy prescriptions that now attend the development and maintenance of federal awards.

"the pitfalls of the new proposals are numerous and highly prejudicial to gender pay equity. Any potential promise lies not with the package (other than its promise of low pay for women), but in the potential for mobilisation of feminists both within and outside the union movement"

Against this backdrop, the anticipated legislative changes pose three particular difficulties for the pay equity aspirations of women:

- Firstly, cutting back the powers of the AIRC and the further weakening of the award system - and with it minimum award wages and a system of open hearings - will disadvantage more women than it does men, because the award system protects the wages of proportionally more women. This is not to mention the weakening of the current albeit limited standards that apply to part-time and particularly casual work. Already 71 per cent of part-time jobs are filled by women and two thirds of casual work is part-time causal work (ABS, 6105.0; Campbell, 2004).

- Secondly the proposed changes will weaken the opportunity to improve the existing equal remuneration measures, and to use those measures to exert reform at an industry or award level;

Both of these weaknesses reside in the fracturing of the measures that are key to the setting of equitable wages and conditions and which underpin any progress towards gender pay equity.

- Thirdly the proposed changes, through their threat to state industrial systems, will remove the stronger equal remuneration measures that are now in place in the state systems of New South Wales, Queensland and Tasmania (and which are planned in Western Australia).

The danger in this last measure lies in the threat to the advances in equal pay measures made in state industrial tribunals in the last five years. The initiatives for these reforms rested with the plateau in Australia's gender pay equity performance - between 1981-2004 the gender pay equity ratio increased from 74.6 per cent to 82 per cent, an increase of only 7.4 percentage points over a twenty three years period (full-time adult non-managerial employees in the private sector).

This plateau is striking, even allowing for the aggregate nature of gender pay equity ratios. Domestic and international research highlights the potential for women's relative pay to improve due to falling pay among low-paid men (as they enter feminised industries) and for ratios to mask growing income dispersion for both women and men. Additionally, some part of this increase in women's earnings post-1981 is a reflection of women's increased participation in higher education and an acceleration of credentials.

The measures in New South Wales and Queensland in particular provide a clear step forward in redressing the undervaluation of feminised work. Undervaluation of work within awards has become the litmus test in these jurisdictions, and for the first time we have had tribunal assessment of the contribution to undervaluation provided by the characterisation of work as women's work, occupational segregation and features concerning the organisation of women's labour. Within NSW at the Inquiry level we have had consideration of the undervaluation of child care workers, librarians, clothing industry outworkers, process workers in the seafood industry and hairdressers. These state measures should be the starting point for the reform of the existing federal measures - the irony is that without activism and intervention they will become a casualty.

What is at stake is the institutional measures that are required to guarantee women's economic independence. Unchecked, low wages and the undervaluation of feminised work means successive waves of lost earnings, lower levels of savings and lower levels of superannuation.

It would not be surprising if the yet to be introduced legislative package retains a broad commitment to the prevention of discrimination and to the objective of equal remuneration. Yet such commitments, absent of any purchase on the dynamics of power and gender and indeed that of wage setting, ring hollow. Not surprisingly, they rest comfortably with the worst of liberal and neo-liberal theorising on the labour market.

Open-ended commitments have little impact on some of the key determinants of pay inequity - the large number of women that work in low-paid, casual and part-time jobs and in a limited number of industries - the lower levels of bargaining power that arises from employment in small, non-unionised workplaces with historically lower levels of overaward payments or enterprise agreements - the barriers to the proper valuation of feminised work such that women receive a lower rate of pay than men, even where they have commensurate skill and experience but are employed in different industries and occupations.


Meg Smith lectures in the School of Management at the University of Western Sydney. This is the text of her address to the Evatt Foundation's Sunset Seminar on "The Promises and Pitfalls of Howard's New Industrial Relations Regime for Working Women", held on 5 July 2005 at the Sydney Mechanics' School of Arts.

References referred to in this article

Australian Bureau of Statistics (ABS) Employee Earnings and Hours, Australia, Cat. no. 6306.0. Australian Bureau of Statistics (ABS) Australian Labour Market Statistics, Cat. no. 6105.0.

Campbell, I. (2004) "Casual work and casualisation: how does Australia compare?" Labour and Industry, vol. 15, no. 2, pp. 85-113.

Gregory, R. (1999) "Labour market institutions and the gender pay ratio", Australian Economic Review, vol. 32, no. 3, pp. 273-278.