Tag Archives: neoliberalism

The Gender Wage Share: History and Implications

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%.

Line graph of Female Share of Total Earning 1984 - 28.6% 2020 - 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.

Index of Gender Wage Share, Gender Wage Gap (F/T Ordinary) and Participation (female proportion of jobs).

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.

Unequal symbol with words "inequality - not what you think"

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).

Talking about Public Housing: Political Economy, Neoliberalism or Welfare?

This article is a background to political economy, and why it matters in policy advocacy – in this case, in an approach to public housing. But it is also about political messaging, channelling Henry Lawson into a 2-minute housing video, and calling out neoliberalism.

This piece began as a background to the making of a short SACOSS video on why public housing matters, but ended up trying to explain what political economy is and what it offers to (and challenges in) social change advocacy.

Public housing matters. South Australia needs more of it.
A link to the video is in the text below

Political Economy

The doyen of Australian political economy, Frank Stilwell describes the political economy approach as having four key features (in contrast to mainstream neoclassical economics). Political economy has:

  • A central focus on inequality
  • A pluralist method engaging different economic traditions
  • An interdisciplinary inclination
  • An ethical orientation in explicitly putting values, as well as facts, at the heart of analysis.

I plead guilty to all of the above. I would also note that the focus on inequality is a systemic one, not one based on individual differences, and that in a pluralist and interdisciplinary inclination, people’s stories matter. People are not simply economic actors or statistical units. They have unique stories and their representation matters.

This latter perspective is standard fare for advocacy in the charitable sector, but often at the expense of systemic analysis. This approach is encouraged by the demands of media and communications for powerful images and personal stories, but can end in disempowering “poverty porn” rather than social change.

But how do we do and communicate political economy, foregrounding the systemic nature of inequality, people’s experience and values?

Public Housing

This was the challenge for me at work earlier this year in developing a campaign call for a significant investment in public housing.

South Australia once had a national (and even international) leading public housing system, but over the last twenty plus years it has been diminished by aging stock and the sell-off of houses and land. Where public housing tenants made up 44% of renters in 1994, and 12% of the total housing market, in 2020 those numbers had reduced to 17% of renters and less than 5% of the total housing market (ABS data).

Unfortunately, the need for public housing had not diminished in that time. At 30 June 2020, the public housing waiting list was over 17,000 applicants – equivalent to 53% of total public housing stock (Productivity Commission data).

This decline and deficit was not an accident. It was driven by government policy and a significant ideological change in seeing public housing as a last-resort welfare measure (at best), or at worst simply overly expensive and counter-productive. This contrasts with the earlier vision of public housing as a market intervention at scale which reduces housing costs for all by increasing supply – a piece of public capital conditioning the private rental market.

In an era of neoliberal dominance where economists and governments had already decided that public housing is old-fashioned and a burden on the taxpayer, we were told it was best to highlight the waiting list and identify people/groups in need that were missing out. To appeal to sympathy in telling those personal/representational stories of stress and homelessness.

This approach ticks the box of a values-based policy, and it is a much easier policy and communication ask. With it, perhaps we could eek out some investment to house some more vulnerable people. But it would takes us back to the neoliberal frame of public housing as a welfare measure – the very approach which is part of the problem.

Economic Approaches to Public Housing

To develop this argument more, I again borrow from Frank Stilwell, in particular his categorisation of modern economic thought into conservative, liberal and radical schools.

In this framework, a conservative economic view sees a housing stress and homeless as an individual issue and government intervention in the housing market as counter-productive. Such intervention competes with productive capital and stops the market’s efficient allocation of housing. I know the theory, but personally, I just can’t see that the problem with Australia’s insane housing market is too much public housing!

A liberal approach might see homelessness as a market failure requiring intervention – for instance, subsidies or supports for individuals. While such interventions may be useful, by the nature of the underlying analysis, they are narrow in their focus and constrained within a market framework.

A more radical political economic approach would see housing stress and homelessness as systemic and relating to more than market supply and demand – a problem that also encompasses income, geography and infrastructure, cultural expectations, competing property rights, and entrenched and reinforcing patterns of inequality.

If this political economy analysis is correct, then it is easy to see how the provision of public housing at scale will help address the problem. Beyond just the provision of housing to those in need, it puts supply into the market creating downward pressure on all rents. It also provides for a different property regime (public rather than private ownership) where tenants have more rights through rent capping and tenancy protections. In contrast to fixed term private leases, public housing also provides a security of tenure and a permanency that challenges a cultural perception that renting is simply a pathway to the preferred status of home-ownership.

That is why public housing is important – and why ideology matters. The different ideological assumptions and analyses drive policy. And in this case, arguably the dominant schools of thought simply don’t have the breath of focus or the scale to address problems of housing stress and homelessness.

Henry Lawson and the video

And so, we arrived at the point of how to sell a political economy perspective on public housing. A short video would be nice!

Enter Henry Lawson. From my childhood I remember the great Australian poet’s “Faces in the Street”:

They lie, those who tell us in a loud decisive tone
That want is here a stranger, and that misery’s unknown;
For where the nearest suburb and the city proper meet
My window-sill is level with the faces in the street —
Drifting past, drifting past,
To the beat of weary feet —
While I sorrow for the owners of those faces in the street.

I wanted to channel that anger, the personalness of it, into a systemic ask that was not about poverty pornography or a charitable helping of the unfortunate. But I also knew that Lawson’s Red Revolution’s marching feet was probably not a winning argument!

So, I drafted words, and my colleague put music and images to create a short video. Thanks to her, it turned out to be much more than I anticipated.

It remains an amateur production with basic technology and limited resources. And it is a short piece which can’t do the full political economic analysis. But as a prototype, from my point of view it does a few things of particular interest/importance:

  • It uses the sympathy-inducing images and music of a charitable fundraising video to go in a different direction
  • The emotional sadness is not just about the plight of individuals, but about a loss of common wealth (named as such) and the implications of that
  • At the point where the “you can help” fundraising ask would normally come, it instead names and shames government strategies and calls out politicians, think-tanks and the ideology that is to blame
  • The warm inner glow of hope at the end is for government/community action, not an individual gift or act of charity.

You can view the video here.

It is for others to judge whether the video is successful in making its point, or ticks all the boxes of a political economic analysis, or is useful as a communications tool. But regardless of the video, I remain convinced that the key issues around housing and homelessness (and much more) are ideological and political-economic, not ones of charity or welfare provision.

With apologies to Mr Lawson:

And so ’twill be while e’er the world goes rolling round its course,
The warning pen shall write in vain, the warning voice grow hoarse,
But not until a city feels political economy’s beat
Shall its sad people miss awhile the terrors of the street —
The dreadful everlasting strife
For scarcely clothes and meat
In that pent track of living death — the city’s cruel street.