This post traces the gender wage share and women’s increasing share of the total wage pool in Australia since the mid-1980s. Women as a whole currently earn just 38% of all wage earnings in Australia. This is a product of the aggregate of the gender wage gap and the difference in labour force participation, and by my calculation amounts to a difference of around $200bn a year.

In a previous post I argued that the magnitude of the difference constituted a significant macroeconomic flow with an important role in the reproduction of society – and of gender relations in particular.

The rationale for the use of gender wage share data and the conclusions drawn are set out in that previous post. Here I want to consider the changes over time in those gender economic aggregates, and the implications of those changes for our understanding of inequality.

Time Series

The graph below shows the female share of “total earnings” in the ABS Average Weekly Earnings data from 1984 to the present. This is a simple calculation based on average employment earnings multiplied by the number of workers.

It is important to note that “earnings” here refers only to employment income. In the ABS data it is called “total earnings” because it includes overtime – as opposed to ordinary time earnings (which is also in the data set). However, that should not be confused with a total of all earnings, which could include social security payments, investment income or other mixed income. The World Economic Database now has this all-earnings data for Australia, but the time series is more limited and contains a bold assumption that mixed income is shared in the same proportion as other income. In any case, the results are similar with the data for 2019 showing a female share of 36.6% of total earnings, while my data has the female share at 38%.

The graph shows three phases in a history of an overall increase in women’s share of the total wage pool over the last 36 years. From the mid-1980s through to 1992, there was a significant increase in women’s share going from 28.6% of wages to 33% of the total wage pool. This was based on a small narrowing (2 percentage points) of the full-time gender wage gap, but a more significant increase in women’s share of jobs – going from 37.9% of employment in 1984 to 42.6% in November 1992.

After 1992, women’s share of the wage pool continued to increase, but at a slower rate until 2012. There is a change in ABS data series here so some data discontinuity, but women’s share of total wages has grown significantly since then from 34.9% of all wage earnings in 2012 to 38.5% in May 2021. This has largely been on the back of a decrease in the full-time gender wage gap (4.5 percentage points) and a more modest (1.9 percentage point) increase in the share of jobs.

These drivers are shown in the following graph which creates indexes showing changes in the gender wage share alongside the proportion of the workforce who are women (participation) and the changes in proportionate remuneration (that is, average female full-time earnings as a proportion of male full-time earnings). This last index is just a different presentation of the commonly-cited gender wage gap.

As can be seen, the increased gender wage share tracks most closely with increased participation. However, between through the 1990s and early 2000s the wage share is dragged down below the participation rate increase by a stagnation of the remuneration gap (evident in the F-T wage proportion) from 1992 to 2007, followed by a widening of this gap after the onset of the global financial crisis in 2007. From 2014 this dynamic largely reversed with the decreasing remuneration gap accelerating the female wage share faster than the increase in participation.

The overall trend of an increase in women’s share of the earnings is not unique to Australia. The World Inequality Report 2022 data shows that women’s share increased between 1990 and 2020 in most regions of the world (with China being the notable exception).

Implications

This gender wage share data has implications for how we understand and speak about inequality. With the female share of the total Australian wage pool growing significantly and (relatively) steadily since the 1980s we have seen a move towards greater gender equality (at least in terms of labour market incomes). Yet, particularly following Piketty’s work, it is now a fairly standard claim on the left that inequality has increased since the early 1980s.

This claim of increased inequality is certainly true based on the usual measures of household income (the data is well summarised by ACOSS/UNSW), but given the data on the female wage share we need to recognise that claims about increasing inequality are gendered, or at least gender-blind, statements. They are not wrong, but they are privileging particular data and the gender-blind category of the household over other standpoints and data which focus on women’s income.

Or to put it another way, such measurements of increasing inequality are based on (and promote) views of society as households stratified along a continuum, rather than as structured by gender (and other) inequalities.

Further, the gender wage share data puts a different light on the left critique of neoliberal or right-wing labour market policies. The standard argument is that the removal of labour protections, penalty rates and working conditions, and the increasing precariousness of work are likely to impact disproportionately on women who are in the most marginal and disempowered jobs. (See for instance Alison Pennington’s excellent critique of last year’s Industrial Relations Bill).

There is no argument from me with these critiques of the neoliberal reforms of the last 30 years. But what the gender wage data shows is that these neoliberal advances have been counterbalanced and ultimately outweighed by the movement of women into the labour market in greater numbers and some closing of the gender wage gap.

This is not an argument for complacency, but rather to argue for a more nuanced and multi-level analysis of our analysis of inequality. There are other forces beyond neoliberalism which are also shaping economic outcomes.

Caveats and Conclusion

While greater gender equality would (and should) normally be seen as a good thing, the increased female wage share is not unproblematic. Firstly, it should be recognised that this is an increasing share of a proportionately decreasing pie as the labour share of total income has been decreasing over much of the period. (See the Journal of Political Economy’s Special Issue on the Declining Labour Share).

Further, it must also be recognised that, in an era of stagnating wages and increasing cost of living (in particular, rapidly rising housing costs), one of the drivers of increasing female workforce participation is the need for households to have two incomes to stay afloat.

Ultimately though, regardless of these caveats on the increasing gender equality story, what the gender wage share data shows is the importance of standpoint and the questions we ask about inequality (and much else). Asking questions about structural inequality (such as gender, class, race, geography) provides different perspectives and different conclusions than the traditional focus on household income – a theme I will return to in future posts about other structural inequalities.

And of course, there is also the sheer size of the $200bn gap in the gender wage share, which is important in its own right (and not visible in the mainstream statistics).