Women comprise less than a quarter of the top 10% of income earners in Australia, new research shows, and their lifetime earnings are less than two-thirds of those of men.
Academic research in a book edited by the Australian National University professor Miranda Stewart, who heads the university’s tax and transfer policy unit, uncovers problems with superannuation and childcare policy, which entrench income inequality for women in Australia.
The research, to be unveiled on Thursday, also points to a culture in Australia where women with children work part time, lowering their earning potential. It says workforce participation drops dramatically once a women has a child and it never fully recovers.
While women’s workforce participation has increased significantly since the 1970s, it says, Australia has “entered an equilibrium in which women who have children work part time, producing a family model of 1.5 earners”.
“The data shows that the increase in women’s workforce participation in Australia since the 1970s has been almost entirely in part-time work.”
Women with university education have higher earnings, although they do not get the same earnings boost as men. The research suggests the low lifetime earnings of women means many never pay off their higher education debts because they never reach the required repayment threshold.
Stewart says Australia is a long way from achieving gender equity, and part of the reason for that is structural gender bias in the system.
“Although there has been some progress in the last decade with the introduction of broader childcare and paid parental leave policy, we still have settings in place that embed gender bias in the system,” she says.
“Successive governments have abolished universal child payments that used to be a feature of Australia’s welfare system. If we keep pushing that care burden to be borne more by woman than men, and are also pushing them back into the workforce, at some point it becomes unsustainable.”
Stewart says Australian policymakers could learn from programs like one in France, which has formalised early childcare education for three- to four-year-olds. “Our research found that the quality of care is a priority when mothers are deciding whether to return to work.
“A more formalised early education program frees up women to return to work earlier knowing that there is quality care. This is an important investment in Australia’s future.”
One of the other problems entrenching inequality is the inadequate superannuation accumulated by women, because many women have career breaks to care for children or elderly relatives. Women also earn comparatively less than men, which impacts their capacity to increase their super balances.
Stewart warns policymakers will also need to look more broadly than superannuation when considering the adequacy of retirement income. “The reality is that private savings are not going to deliver adequate retirement income for a majority of the population – we can’t just rely on super.”
