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Tracking the gap toward gender parity

Last week, the Financy Women's Index (FWX), an Index tracking women’s financial progress in Australia, and supported by Deloitte, released its September quarter results.

Overall, the Index improved 2% to 73.6 points (out of 100), reflecting its highest quarterly score since September 2020. The score covers a range of indicators, including employment, underemployment, unpaid work, fields of education, earnings, superannuation, and gender diversity on corporate boards.

While the overall result is promising, there is a risk of a cyclical element through the COVID-19 recovery.

The rise in the FWX was predominantly driven by an improvement in the relative underemployment index, up 10% quarter-on-quarter.

In absolute terms, female underemployment weakened in the September quarter, rising to 10.2%, however the deterioration in underemployment was worse still for men, meaning women’s position improved slightly in relative terms.

This isn’t the first time the underemployment index has spiked. In fact, there is a pattern of underemployment for men increasing relatively more than women during lockdowns. One possible explanation is that women deliberately opt to reduce their work hours during times of crisis to accommodate additional household or caring responsibilities (and so show up as leaving the labour force, or satisfied with their hours, rather than underemployed).

With the easing of restrictions now well underway, that relative progress in female underemployment may quickly evaporate once again, mimicking the trends seen late last year between COVID’s second and third waves (see Chart).

Chart: Underemployment throughout COVID-19

Source: Financy (2021), ABS (2021) and Deloitte Access Economics.

Of course, underemployment is just one measure of women’s financial progress. More optimistically, there are signs of longer term improvement in other areas. The FWX reported modest improvements in female employment and gender diversity on boards, with women now representing 34% of ASX200 board positions. Data on superannuation, unpaid work, the gender pay gap and education will be updated next quarter.

Another report, released by the Financial Services Institute of Australia in October, highlights the perception gap between men and women on issues associated with gender parity. In the study, 77% of male respondents were neutral, agreed or strongly agreed the gender pay gap was grossly exaggerated, compared to just 40% of female respondents. This is despite the Workplace Gender Equality Agency estimating that the sector has one of the highest gender pay gaps in Australia (at just under 28%).

Only time will tell what happens next. But gains on gender parity are harder to achieve when there are still so many who are unconvinced a problem exists at all.