A slowing economy halts women’s financial progress in 2022

A slowing Australian economy in the December quarter has put the brakes on women’s financial progress in 2022.

The Financy Women’s Index (FWX) headline score slipped by 0.1 points to 76.2 points out of 100 in the December quarter, to finish 2022, just shy of 76.3 points in December 2021.
Recent weakness in the jobs market under higher interest rates appears to have weighed on the FWX during the December quarter and in particular set back progress in closing the gender gaps in employment and underemployment.

The annual FWX score for the 2022 calendar year also fell -0.1 points, marking the first time in a decade that women’s financial progress finished a calendar year in negative territory.

“While the decline is marginal, even the smallest backward step on this journey is a large policy failure,” said independent economist Nicki Hutley.

“The fact that women didn’t benefit as much as men during 2022 from the economic stimulus from COVID, is an indictment of those specific policies as well as broader policies
aimed at gender equality, said Ms Hutley.

Annick Donat, CEO, Clime Investment Management agreed. “Equity and equality need to be symbiotic if we are serious about the advancement of women. We need equitable financial resources and outcomes to support economic equality for women. One without the other slows progress and diminishes the seriousness of the situation.”

The employment sub-index fell to 71.5 points compared to 71.9 points in the September quarter and 71.7 points in December 2021, as the gender gap in monthly hours worked widened on slower female employment growth (0.3 per cent) compared to that of males (0.9 per cent).

The FWX underemployment sub-index also fell to 67.1 points compared to 69.2 points in September and 70.3 points in December 2021, as male underemployment improved, while female underemployment worsened.

Despite the lack of progress in the jobs market during the December quarter, it’s important to note that 2022 did produce some good news in the long-term divers of gender equality. Notable mentions contained in the Financy Women’s Index full report include unpaid work (up 2.1 points), board leadership (2.4 points), the gender pay gap (0.5 points) and education and expected earnings (up 0.5 points).

“The good news is that progress towards gender financial equality continues to be made in areas like board representation, the gender pay gap and unpaid work,” said AMP Capital chief economist Dr Shane Oliver.

“The pandemic appears to have accelerated behavioural change on the part of men in terms of contributing to family and home related unpaid work, which is critical to freeing up women to pursue career related endeavours.

“The backsliding in the FWX Women’s Index through 2022 is disappointing particularly as it comes after years of a rising trend.

“Hopefully it’s just a temporary setback associated with economic dislocation.

“But it’s a frustrating development as it came in key areas around employment.

“It’s also clear that to achieve financial equality we have a long way to go in terms of study and career choices girls take early in life,” said Dr Oliver.

Timeframes to equality in Australia

The past twelve months has produced some significant reductions in the number of years it will take to achieving gender equality in parts of the index, but it has also seen some notable setbacks.

Source: Financy Women’s Index December quarter 2022

• Gender pay gap – at 24 years, up from 22 years in 2021
• Underemployment – at 18 years, up from 15 years in 2021
• Employment – at 28 years, down 30 years in 2021
• Board leadership – at 6 years, down from 6.5 years in 2021
• Unpaid work – at 44 years (2021 data), down from 59 years (2020)
• Superannuation – at 19 years (FY20 data), from 33 years (FY18)
• Education and expected earnings – at 139 years, relatively steady.

“Whilst we remain hopeful that the Federal Government’s Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023, will be effective at helping to further close lingering gender gaps in companies with over 100 employees, there is still more work to be done to challenge long-standing gender biases that act as barriers to economic gender equality,” said Financy CEO Bianca Hartge-Hazelman.

“Financy will launch a new software in May, called the Impacter, which will help small, medium and large organisations take greater action towards an equality effect by enabling measurement, tracking, actions and accountability on diversity, equity and inclusion,” said Ms Hartge-Hazelman.

At the same time Financy would also like to see the following actions considered in the upcoming May Federal Budget to improve financial outcomes for women and help to achieve gender equality in Australia.

1. A gender equality timeframe target as part of the Federal Government’s pledge to develop a National Strategy to Achieve Gender Equality.
   FWX Target area: Gender Equality Timeframes.
2. Superannuation payments to be included as part of Commonwealth Paid Parental Leave and unpaid leave portions.
   FWX Target area: Superannuation & Employment.
3. Investment in schools and university-led programs that educate students on the financial implications of gender stereotypes, and to ensure that women, have more choices that stereotypes often suggest.
   FWX Target area: Employment, Education and Gender Pay Gap.
4. Ongoing investment in media campaigns that seek to educate people on the benefits of breaking down gender stereotypes in unpaid work.
   FWX Target area: Unpaid work.
5. Mandatory gender-balanced targets of 40 per cent minimum for female board directors across all listed companies by 2030 or within 2 years of list date. Plus, government incentivised programs that build the actual number of board ready women in Australia.
   FWX Target area: Board Leadership and Gender Pay Gap.
6. Government introduction of a procurement target on businesses to engage with genuine and authenticated female owned and led businesses.
   FWX Target area: Employment.