SENATOR THE HON PENNY WONG

LEADER OF THE OPPOSITION IN THE SENATE

SHADOW MINISTER FOR TRADE AND INVESTMENT

LABOR SENATOR FOR SOUTH AUSTRALIA

SPEECH

10 April 2016

AUSTRALIAN WOMEN LAWYERS NATIONAL CONFERENCE

PERTH

TOPICS: DOMESTIC VIOLENCE, GENDER EQUALITY

*** check against delivery ***

[ACKNOWLEDGEMENTS OMITTED]

Thank you for inviting me to speak at this dinner.

Congratulations to Australian Women Lawyers for staging such an important conference – and for adopting the theme “Where do we want to be in five years’ time.”

It’s a theme that invites us to lift our horizons and to look to the future.

It invites us to focus on what matters over the longer haul and on goals and strategies for achieving change.

And that is a welcome invitation in busy lives, which often seem dominated by the challenges of the next few weeks rather than the next five years.

We all live in a world where the urgent tends to overshadow the important.

For politicians, the 24/7 media cycle all too often crowds out strategic and long-term thinking.

For lawyers, there are the pressing, 24/7 demands of clients, colleagues and courts.

And in our personal lives there are the daily challenges of juggling work and family.

Amidst these pressures it is important to conceptualise the next five years – and indeed the next 10 years, and beyond

Social reform is like Max Weber’s definition of politics: “The strong and slow boring of hard boards.”

It is driven by the immediate actions of individuals and groups – but it also unfolds over long time horizons.

As Weber said again: “It requires passion as well as perspective.”

I know there will be many issues you will discuss at this conference under your theme of where we need to be in five years’ time.

Tonight I want to give my perspective on priorities over the next five years – and beyond – on gender equality, especially gender pay equity.

 

While we have achieved formal equality for women, we still have not achieved real gender equality.

Changing laws and policies is hard enough.

Changing culture and attitudes, changing economic and social institutions, is even harder.

Women have secured the right to vote.

We have been elected to Parliaments.

We have been graduating in ever-greater numbers from universities across the full range of disciplines.

We have gained access to institutions once reserved for men – board rooms, Cabinet rooms, the upper echelons of the public service, the defence forces, the judiciary, and the professions.

We have entered the workforce, dismantling discriminatory practices that excluded us from many jobs or professions.

And we have campaigned for equal pay.

Equal pay may have something of a 1970s ring to it in some quarters.

Yet it remains an important piece of unfinished business if we are to achieve real gender equality.

 

Women now participate in the labour force at higher levels than ever before.

Over the last four decades, female workforce participation has increased by 16 percentage points to 59 per cent.

It still lags 12 points behind the male participation rate – but that is a lot narrower than the 36-point gap between male and female workforce participation four decades ago.

Women now go on to higher education in greater numbers than men – we have been a majority of commencing university students for more than a generation.

Women are now entering professional occupations in comparable numbers to men.

In your own profession, female solicitors have made up more than 60 per cent of all new solicitors admitted to practice in recent years.

Yet, despite all these long-term equalising trends, women are still paid less than men.

On average, women working full-time in Australia earned 17.4 per cent less than men, according to the latest Australian Bureau of Statistics data for November last year.

In professional, scientific and technical services, which includes legal services, the gender pay gap was higher, at 22.6 per cent last year.

Progress in closing the gender pay gap has been disappointing in recent years.

Back in the 1960s the pay gap was nearly 30 per cent.

Following the equal pay cases in the Arbitration Commission in 1969 and 1972, the gap narrowed sharply.

It fell to 20 per cent by the early 1980s and was down to 15 per cent by 2000.

Over the last decade, however, progress has not just stalled but gone into reverse.

The gender pay gap increased from 15 per cent in 2005 to 19 per cent in 2014 – its highest level since 1984 – before falling back slightly to 17.4 per cent last year.

So gender pay gap is proving more persistent and harder to eliminate than we would have expected a decade ago.

 

Economic analysis of gender pay differentials focuses on human capital – education, skills and experience, which are major determinants of individuals’ earnings.

However, even after economists control for human capital differences between men and women they find there remains a significant gender pay gap.

In Australia, between half and three-quarters of the absolute gender pay gap cannot be explained by differences in human capital and job and workplace characteristics.

That is bad news for achieving gender pay equity.

Until recently, pay equity seemed just a matter of time, waiting for new cohorts of women to work their way through the education system and into their careers.

The education system certainly acts as a pipeline towards equality – channelling more and more women into the workforce with higher and higher human capital endowments.

Yet now it looks as though the final stretch of the pipeline is blocked.

We may have closed the gap in human capital – in education, skills and experience.

But that has left us facing the more stubborn dimension behind gender pay gaps, namely discrimination.

 

Research by Harvard University economist Claudia Goldin has shown that gender pay gaps in many occupations in the United States have a lot to do with working hours.

Professor Goldin shows that in some occupations there is a non-linear relationship between how long people work and how much they are paid – those who work more hours not only get paid more, they get paid a lot more.

She also finds that in many occupations there are significant penalties or markdowns to employees’ earnings based on their attitudes towards hours of work.

Let’s call these the time-out markdown and the flexibility markdown.

The time-out markdown means employees who take breaks in their careers get paid less than those who do not take breaks.

So an employee with 10 years’ experience in a single stretch typically earns more than an otherwise identical worker with 10 years of experience that was interrupted by a break.

A study which tracked Harvard law graduates found that an 18-month hiatus in employment was associated with a 29 per cent decrease in earnings 15 years after graduation.

For MBA graduates, this time-out markdown was larger, 41 per cent, while for those with medical degrees it was smaller, at 15 per cent.

The second earnings markdown identified by Goldin involves flexibility of working hours.

This is not just a matter of the number of hours an employee wishes to work.

It also involves when they need to be in the office, how regular their working hours are, whether they can adopt flexible schedules, and when they need to interact with clients and colleagues.

Goldin finds that employees who want greater flexibility in their working hours typically earn less, on an hourly basis, than employees who do not require flexible schedules.

Given the roles of women in caring for children, it’s obvious that these markdowns will increase gender earnings inequality.

The good news is that Professor Goldin finds that not all jobs are characterised by these penalties.

Technology and science occupations do not display significant hours-related markdowns.

The bad news for this gathering is that the occupations which do feature these penalties are in business, finance and the law.

One study looked at more than 2,500 people graduating with MBAs from the University of Chicago over the period from 1990 to 2006.

At the start of their careers, the earnings of these graduates by gender were almost identical.

Five years after graduation, a gender gap had opened up.

By 10 to 16 years after graduation, the gender gap had grown to an incredible 45 per cent.

Nearly two-thirds of this pay gap could be explained by differences between the men and women in career breaks, job experience and working hours.

Goldin’s work is based on data from the United States.

But I think many people here would recognise the phenomena of the time-out and the working hours flexibility markdowns in the Australian legal profession.

 

The implications of this work are that to complete the long march towards gender pay equity in coming years, we will need to focus on discrimination against women with children.

As Claudia Goldin says: “The gender gap in pay would be considerably reduced and might even vanish if firms did not have an incentive to disproportionately reward individuals who worked long hours and who worked particular hours.”

What her research also shows is that women face structural barriers which require collective responses – they can’t be resolved by individual actions alone.

We need to change the way we organise work so we enhance rather than penalise flexibility when it comes to hours of work.

We need to examine why occupations in the corporate, legal and financial sectors impose the largest penalties on flexibility and on women taking maternity leave.

Is it really credible that women who take breaks after giving birth see their skills grow so rusty, or miss out on work experience to such an extent, that they should suffer lower earnings for years to come?

Can firms offer better policies to keep employees on parental leave in touch and to ensure hit the ground running when they return to work?

Dismantling the time-out and flexibility markdowns requires not only changing internal workplace attitudes and cultures.

It also requires understanding the economic incentives which cause firms to structure hours, remuneration and promotion decisions in ways that discriminate against women.

When we have a better understanding of these incentives we can consider alternative patterns of work organisation which are economically-viable for employers.

The other side of the coin when it comes to tackling the persistent gender pay gap involves responsibilities for children.

Improving access to childcare will make it easier for women to pursue both career aspirations and family responsibilities.

Given the growing body of evidence on the importance of early childhood education, improving access to quality childcare will reap a double dividend – improving fairness for women at work while improving the life prospects of the next generation.

We also need to encourage a more equal distribution of parental responsibilities between men and women.

Policies such as parental leave need to give couples as much flexibility as possible when it comes to who stays home.

Some countries create positive incentives for men to play a larger role by including periods in their paid parental leave schemes which can only be accessed by fathers.

In Belgium, paid parental leave arrangements include 19 weeks for fathers, in Portugal this entitlement is 21 weeks, in France 28 weeks, and in Japan and Korea it is a year.

In Sweden, couples have a paid parental leave entitlement of 480 days off work between them – 60 of these days are reserved for men and are lost if not used.

Sweden also has an “equality bonus” – additional payments to couples who evenly split their time off work on parental leave.

Policies like these can increase the take-up of parental leave by men which, in turn, can contribute to gender pay equity.

Labor’s Paid Parental Leave scheme, introduced in 2009, includes Dad and Partner Pay which provides two weeks of paid leave for dads and partners.

An evaluation of the scheme found that the introduction of Dad and Partner Pay has resulted in a small but statistically significant increase in the length of leave taken by fathers during the first two months after the birth of a child.

It has also had a significant effect on the attitudes of fathers and employers to fathers taking parental leave.

In the future we should look to improve support for fathers and partners, so that families can better balance caring and work responsibilities and so that workplace cultures continue to change.

 

Gender pay equity is not the only aspect of gender equality we need to tackle over the next five years.

One of the greatest challenges for our society is the scourge of domestic, family and sexual violence.

The statistics on violence against women are shocking.

  • A woman is killed by a current or former partner nearly once a week in Australia.
  • Based on reports to police, nearly 50 women are sexually assaulted every day – based on crime victimisation surveys, the number is more than 100 a day.
  • And an estimated 250 people a day are physically assaulted in incidents of domestic or family violence – the vast majority are women.

This is a fundamentally gendered form of violence, driven by inequalities of power and by deep-seated disrespectful attitudes towards women.

Domestic violence causes immense and unacceptable harm and suffering.

For too long, it did not receive the public attention or the policy focus it warrants.

This has begun to change thanks to brave women like Rosie Batty.

I also acknowledge others who work to tackle domestic violence – including those who work in community legal centres, the courts, NGOs and in law enforcement.

Governments and politicians need to move beyond words on domestic violence.

The Federal Government last year announced a package of measures to improve services for victims, to use new technologies to keep women safe and to boost educational resources aimed at changing community attitudes.

For its part, the Labor Opposition has announced funding for perpetrator mapping strategies to help prevent violence, Safe at Home grants to help those at risk to stay safe in their homes, and additional legal services for victims.

Yet the Federal Government has effectively given with one hand while taking away with the other by cutting funding for community legal services and Indigenous services.

In five years’ time I hope we will have stronger and better-coordinated policies to tackle domestic violence, including adequate funding for community legal centres.

And I hope we will have changed the culture in our society to one which renders violence unacceptable.

Because no matter how far women progress, they will never be equal when they are not safe on the streets and in their homes.

 

I have focussed on some aspects of gender equality tonight.

But it’s important to realise that gender equality is just one facet of a broader equity agenda.

Economic and social inequality has been on the rise in many developed economies over recent years.

In the United States, rising inequality is one of the factors behind the political backlash and bitterness playing out in the current presidential election campaign.

In Australia, the trend to greater inequality has not been as severe as it has in other countries.

We have maintained a decent social safety net, fair workplace relations laws, minimum wage regulation and a progressive taxation system.

And the former Labor Government kept our economy growing after the Global Financial Crisis, avoiding the mass unemployment that has driven up inequality and poverty in so many other countries.

But the risk of widening inequality remains a key challenge for the future.

One of the most important ways governments can tackle this challenge is by investing in education.

Providing children with a quality education will help them develop the abilities they need to realise their full potential.

Labor adopted the Gonski school funding reforms to ensure children from all backgrounds receive a quality education.

The reforms were motivated by a raft of indicators showing significant disparities in educational outcomes – the disparities in Australia are wider than in many OECD economies.

Let me point to just two of these indicators:

  • On reading literacy, the gap in 2009 between students from the lowest quartile in terms of socio-economic background and those from the highest quartile was equivalent to three years’ schooling.
  • And the gap in reading, mathematics and science literacy between students attending metropolitan schools versus those attending remote schools was 1.5 years’ schooling.

Statistics like this tell you why we must continue funding and implementing the Gonski reforms.

And they tell you why the Prime Minister’s plan for the Federal Government to withdraw altogether from funding public schools is so retrograde.

In five years’ time I hope to see every child, in every school funded on the basis of need.

Because a better education system will mean better opportunities for individuals, a more skilled and productive workforce and a stronger economy.

And a better education system will mean a more equal and more just society. Thank you.