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Women’s pay and a stagnant economy.

This article is longer than usual because of the interaction of the 2 main themes and the new information that became available in the last 2 weeks. Here is a summary with each part linked so that you can jump straight to any part of the story.


Introduction

Just before International Women’s Day, 3 new slabs of information were released that update what we know about inequality and the standard of living in Australia.

These were the Productivity Commission’s (PC) Closing the Gap Report, the Workplace Gender Equality Agency’s (WGEA) first deeper-dive report on the gender pay gap, and the Australian Bureau of Statistics (ABS) quarterly national accounts.

Each report received much mainstream media commentary. The PC’s Closing the Gap report is mainly about the social wage and needs to be treated separately for serious consideration.

The Fair Work Commission (FWC) has commissioned extra research on women and wages dues in April.

All will be in the mix as the Annual Wage Review (AWR) unfolds in the FWC, now underway. The deadline for first submissions is 28 March.

And the Treasurer is busy now preparing the population to accept the next Budget as, at best, a minimal step forward for living standards, for just some segments of the working class. There is no sign at this stage of a working-class mobilization to redirect his false logic.


Wage-earning women, a stagnant economy and exploitation

Last week’s quarterly national accounts showed persistent stagnation is the main feature of the Australian economy. The first items in the data set are about wages and profits. These show a steady rise in the general rate of exploitation (profits taken relative to wages paid):

 

The rate of exploitation is the starting point for inequality and connects to the most serious (but least discussed) indicator of the health of any capitalist society, i.e. the state of profit-taking.

We can be sure from old and new gender gap data the overall rate of exploitation of women in waged work is worse.

Rising exploitation is associated with general economic stagnation in place before the COVID-19 pandemic, as shown in the next graph. Quite possibly, we are on the edge of a general recession, knowing that some parts of the working class are already living recession-like lives, especially working women and their dependents.

(This and similar graphs to follow come from Trading Economics.)

So, persistent stagnation (maybe worse) is the context for all working-class struggles, including closing the gender pay gap, improvements to the social wage, and reversing climate heating. Normally, but not always, economic stagnation or recession dampens the desire and capacity to struggle, as unemployment and job insecurity rise.


Gender Wage Equality and the Annual Wage Review

That’s why the achievement of the Health Services Union and Australian Nursing Federation in the women-dominated aged care industry in winning an increase between 18.2% and 28.5%, inclusive of the 15% already ordered, depending on their skill and qualification level, is so important.

The general recent trend has been marginal, slow closing of the gender pay gap,  currently between 12% and 21.7%.

We have been learning about the gender wage gap for many years. Now we have the extra information released last week by the WGEA. Again, that new information is because of a new law created by the Labor government, and probably will be a part of the submissions to the AWR due on March 28, the day before Easter.

The new report focuses on the median gender pay gap performance for private sector employers in Australia with 100 or more employees. The results selected by the Minister show:

  • 30% of employers have a median gender pay gap between the target range of -5% and +5%.

  • 62% of median employer gender pay gaps are over 5% and in favour of men.

  • The rest (8%) are less than -5% and in favour of women.

  • Across all employers, 50% have a gender pay gap of over 9.1%.

A deeper dive shows the gender pay gap slowly closing, ranging between 14.5% and 21.7%, depending on the measure used.

When it comes to total pay, women are the majority in the 3 lowest pay quartiles - 75% of the working population. Executive-level women are included.


Working women v executive women

CEO’s and other executive level women do not, with some exceptions, produce any new value, that is useful goods and services for profit taking that are essential, discretionary, or luxuries.

Rather, in some way, they monitor, manage or supervise the exploitation of all workers who do, including of course other wage-earning women. Much of that is directed at deflecting, or preventing low-income women from union struggles to win a better deal on wages and other working conditions. Winning a battle against discrimination at the executive level stiil maintains the exploitation of real wage earners, especially women.


The gender pay gap and the Annual Wage Review

These days, it’s always worth remembering just how important the AWR is because it’s wages decision is about 1) the national minimum wage and 2) the minimum rates for all occupations within all of the 120 odd industry awards. The United Workers Union (UWU) does a good job of explaining the continuing significance of award rates and AWR decisions for both individual contracts and enterprise agreements.

This year will be the second that the FWC is required in its AWR “to take gender equality into account when reviewing and setting new minimum wages.” This law, introduced by the Labor government in December 2022, requires that gender equality is applied by the FWC to the AWR so that it covers the national minimum wage and all award rates. (Check here for more details.)

Last year’s AWR raised the minimum wage and award rates so that some nearly kept up to the real cost of living. Also, the FWC discussed what the new gender equality objectives might mean. Their long and slippery discussion slows down closing the gender pay gap.

Lisa Heap, Centre for Future Work, recently provided a good summary of how the FWC could hasten the closing of the gender pay gap. (The links included in her commentary are useful for any union activist.) Although she does not identify the AWR specifically as one of the “tools” the FWC could use, it is in the first of 3 “bold ideas” for the FWC to act on.

That is to grant a minimum interim 12% increase (one estimate of Australia’s national gender pay gap) across the board for female-dominated awards in this year’s annual wage review

The employers will vigorously oppose this and it’s unclear at this stage what the Australian Council of Trade Unions thinks.

In the AWR process so far, the ACTU pointed out, on December 21 last year, to the FWC that their deadline dates in the Review process present problems for complete and proper consideration of gender wage equality at the AWR:

“… we are concerned to ensure that the gender equity issues are adequately explored. The draft research program indicates that the “Stage 2” report of the Gender Pay Equity Research will not be available until after initial submissions are due. …  we are concerned that the issues of gender-based undervaluation cannot be comprehensively addressed to finality within the context of the tight timeframe imposed by the annual wage review.”

On February 2, the FWC President replied:

I do not anticipate that all issues of gender-based undervaluation will be dealt with ‘comprehensively … to finality’ in the 2023–24 Review.  However, the decision in the Annual Wage Review 2022–23 identified two potential gender equity issues requiring further consideration, and I anticipate that at least these issues will receive further attention in the 2023–24 Review. …. I anticipate that the Stage 2 report: Gender Pay Equity Research will be published in early April 2024. Parties will be afforded an opportunity to comment on the research in their reply submissions which are due on Monday 29 April 2024.

The hearing that follows this second deadline has been pushed from the 20th to the 22nd of May.


Working women having their say

You will see in the language and methods that this wages struggle – the AWR - is not legally permitted to be an industrial struggle. It’s a consultation with lawyers and economists at ten paces.

Low-income and award-paid working women have little say in forming what the demand should be and what industrial pressure might show their determination for it. It’s something that is done for and to them, for which they should be truly grateful. This is quite normal for the modern FWC, the previous Conciliation and Arbitration Commission, and right wing of the union movement. However, only in recent years has the union left gone along with this approach.

There is no sense of industrial protest that wage-earning women are exploited more intensely than men, closing the gap is snail's pace, and the employers in general and the FWC want that to continue.  Subserviently, the rules imposed are obeyed across the board. The “problems” with the law, now defined as “challenges” (one of the “great” new weasel words of our times), will be fixed by the ALP in government.


Back to the stagnant economy

The rate at which the gender pay gap is closed will be influenced by the general state of the Australian and global economy. Because it’s a mess, the employers will argue against any significant increases. And we know the Reserve Bank is determined to use higher interest rates to increase unemployment and thus bring down wages.

The state of the global capitalist economy can only be described as “stagnation”. Some big countries in the system are in recession. Australia will be affected by that.  

Governments can respond to stagnation in different ways. They can make the situation even worse for the majority while protecting most of the minority, especially by maintaining the regime of profit-seeking as the pathway to “recovery”. Or, they can make the situation worse for the capitalist minority while softening the impact for at least a part of the working-class majority.

The first has been the usual solution, including for labor governments in various countries, although Labor’s rescue of profit-taking is not usually as extreme as that sought by LNP governments and the like. The Labor government's response to the economic crisis of 2008-10 was not as bad for wage earners and their dependents as what would have been delivered by the LNP.

As above, last week’s national accounts for Australia show persistent stagnation. (Putting aside for now that the GDP measure is a problem in other ways.)

The USA, Japan and China are 3 of Australia’s most important trading relationships. (All charts are from Trading Economics.)


The growth story for Japan is gruesome.

The USA is much the same.


China is different. As previously discussed, relative to the USA, China is in a stronger position.

China is the only major national economy whose citizens can reasonably expect continuing improvement to their material living standards and a better prospect of moving out of fossil fuel burning dependency.

That is because the Chinese system enables governments and the public to significantly control new investment decision-making so that it is more likely that investment meets social requirements.

The consequence of Australia not having such control is again shown in the national accounts. The Australian capitalist class is a failure, even on its terms.


Summing up

What we see is the worst possible story for anyone who thinks that Australian capitalists are seriously intent on tackling the urgent changes in production and distribution technologies and consumer goods that can help slow down and stall climate change. Unless.

Unless there are aggressive and urgent government controls that require stronger private sector investment that is socially useful and environmentally restorative. Unless there is stronger public sector investment with government and public-community control and ownership, not handouts to a class that is failing everyone else.

It is hard to see this Labor government moving in this direction. Sure, they can lower the people’s expectations to accept a Budget that won’t help very much. But they won’t prepare or lift the population for a shift in power and opportunity for the people to have more control in their workplaces and their communities.

It is true that would require a more direct confrontation with capitalists. We know that Labor is not capable of that.

Thus, we return to the critical idea of a movement behind a people’s democratic economic programme. The future of the majority and the nature that surrounds us depends on that.

 

 

 

 

 

 

 

 

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