Men earn more when outnumbered: study

A 10 per cent or more increase in the proportion of female senior executives can lower the gender pay gap.

But if women make up more than 80 per cent of managers, the gap widens again, research out this month from Australia’s Bankwest Curtin Economics Centre and the Workplace Gender Equality Agency has found.

Report author and Bankwest Curtin Economics Centre principal research fellow Rebecca Cassells said the report findings starkly show the different ways women and men engaged with the workforce, and how their contributions are valued.

‘‘Not only do female-dominated organisations tend to be lower paid, but this analysis shows that in workplaces with heavily female-dominated management teams there are large gender pay gaps in favour of men,’’ Associate Professor Cassells said.

‘‘It seems that where the men are few, they are more highly valued. It is often thought that men are put on a pedestal in environments where they are outnumbered by women.’’

The report speculated an explanation for this was likely to be driven by unconscious bias and stereotypical views of men as figures of authority.

It found that within organisations where management was dominated by women – beyond 80 per cent – the gender pay gap among managers increased from 8 per cent to 17 per cent.

The report’s co-author, Professor Alan Duncan, said the findings provide some of the ‘‘strongest empirical evidence to date that improved gender pay outcomes are driven by companies promoting greater gender equity in senior leadership roles’’.

‘‘Organisations that increased the share of women in executive leadership roles by more than 10 per cent between 2015 and 2016 recorded a reduction in the organisation-wide gender pay gap of 3 percentage points over the course of a single year,’’ he said.

Overall, the report shows the gender pay gap in Australia for female executives is starting to narrow because women’s wages at top levels have grown faster than wage increases for men.

Women appear to be more protected from economic downturns because of the types of industries they tend to work in.

‘‘Both men’s and women’s salaries have grown over the same period, but men’s at a slower rate,

"It seems that where the men are few, they are more highly valued. It is often thought that men are put on a pedestal in environments where they are outnumbered by women." Rebecca Cassells, report author

particularly among management,’’ Cassells said.

‘‘This reflects the economic downturn and the greater exposure men typically have to the economic cycle due to the types of industries they work in – mining, construction changes in the gender pay gap will often reflect the economic cycle.

‘‘When the economy is doing well the pay gap expands; when it’s not doing as well it contracts.

‘‘When we see the gender pay gap fall outside of these cyclical movements, that’s when there is a real structural change afoot and a real improvement in pay equity.’’

The report found gender pay gaps for those participating in a graduate programme are minimal, but men are more likely to receive top graduate trainee salaries.

Overall, the median gender pay gaps for full-time graduate trainees are 2.9 per cent on base salary and 2.1 per cent on total remuneration.

However, the gender pay gap for graduate trainees progressively widened in the top tiers of salary earners.

‘‘The highest-paid 10 per cent of women in graduate trainee positions receive at least A$81,000 [NZ$87,000] in base salary, whereas the highest-paid 10 per cent of male graduate trainees took home at least A$88,000 – this equates to a pay gap of 8 per cent,’’ the report said.

‘‘Women are consistently under-represented in the highest graduate salary bands, with some 18 per cent fewer women paid over A$80,000 compared to their share of the graduate workforce.’’

Overall, the report shows gender pay grows with seniority and climbs to 26.5 per cent for toptier managers.

The annual difference between men and women is currently about A$93,000 at senior management levels.

The report, Gender Equity Insights 2017: Inside Australia’s Gender Pay Gap, looks at gender pay gaps across more than 12,000 organisations, representing more than 4 million employees.

It found that gender pay gaps for organisations with a balanced representation of women in senior leadership roles are half the size of those with a much lower proportion of women in leadership positions.

Workplace Gender Equality Agency director Libby Lyons said the report shows gender-balanced workplaces and gender-balanced leadership teams lower the gender pay gap.

‘‘We must address the stereotypes dictating the work women and men ‘should’ do, if Australia is to meet the social and economic challenges in the decades ahead,’’ Lyons said. –Sydney Morning Herald