The Financy Women’s Index (FWX) rose to 78.1 in the September quarter, reflecting further advancement towards economic equality in Australia.
The result is the best gain in two years and cements a correction in women’s financial progress following a decline associated with the Coronavirus pandemic.
The Index rose 2% to 78.1 points in the September quarter from 76.6 points out of 100 in the June quarter, helped by an improvement in female underemployment and a shift among women studying educational fields linked to higher expected career earnings.
Bianca Hartge-Hazelman, founder of Financy says the Women’s Index is now 1.9 points higher for 2023, which is good news despite the challenges of a slowing economic environment.
“During the peak of the pandemic, the underlying data captured in the Index was volatile and if we compare where we are today to September 2020, the Index is less than 1 point (0.84) higher – that’s a terrible result for economic equality.
“That said, if we look at economic equality prior to the pandemic in December 2019, the Index is nearly 5 points higher today than it was then. This suggests a correction in the Index to a more reliable pattern of progress, but the economic environment remains concerning for both female and male employment.”
A slowing economy is behind a switch from full-time to part-time employment growth by employers. This has been particularly noticeable in female underemployment.
The female underemployment rate improved (7.36%) in the September quarter as more women worked part-time. The male underemployment rate (5.59%) worsened – this helped to narrow the FWX Underemployment sub-index. The number of monthly hours worked by women in the September quarter dipped only just (-0. l%) compared to a bigger fall of -1.3% for men.
In Education, Information Technology remains the highest paying educational area with women aged 30-39 years expected to earn $2,124.37 v $2,109.81 for men. During the September quarter female enrolments rose to 21,006, about a third less than the 73,716 for male enrolments in this broad field of study. Still female enrolment growth continues to rise faster, up 4.8% for women compared to 1.8% for men over the 2021 period.
Management and Commerce experienced, ranked as the 3rd top paying area for women aged 30-39 years, who are expected to earn $1,901.42 v $1,951.17 for men. Female enrolments were significantly higher than male at 323,017 versus 255,212 for male, up by a growth rate of 2.8% v 2.5% respectively over this period.
“This quarter’s Financy Women’s Index calls out that men in the Education sector earn significantly more on average – $144.94 more per week – than women, despite nearly 72% of teachers being female,” says Natalie Previtera CEO of NGS Super.
“It’s important that we continue to think about gender financial equality beyond women’s years in the workforce.
“We know that women are more likely to experience poverty in retirement than men. An ASFA report found that the average superannuation balance for women aged 60-64 is $70,691 less than that of mem,” she says.
Overall, the combination of sustained gains across all FWX indicators comes at a time of increased focus on gender equity policy and research in the form of the Economic Equality Taskforce final report to the Australian government and, offshore, the awarding of the Nobel Prize in economics to Dr Claudia Goldin for her research that has raised the profile of the gender pay gap and what’s behind it.
What’s needed now is for the tide to turn from all this awareness raising on economic inequality to an environment of collective action by government, companies, and individuals to accelerate progress to equality.
“The Financy Women’s Index shows we clearly still have a long way to go to achieve gender financial equality,” said Dr Shane Oliver chief economist AMP.
“This is particularly so in areas like the expected earnings flowing from the education choices women make and in unpaid work.
“But the good news is that the index has improved significantly this year with strong progress in women’s board representation,” he says.
Dr Tracey West, Financial Education Manager at Ecstra Foundation says that critical to closing the financial knowledge deficit and empowering women to make informed financial decisions is boosting financial education in schools.
“The call to action from the Women’s Economic Equality Taskforce Final report, which was released in October, to recommend immediate action on financial literacy in the classroom recognises the important role schools play in developing this critical life skill,” she says.
Financy covers gender finance, diversity and inclusion issues. We advocate for gender equity change through the Women’s Index report and help businesses take action on DEI through tech solutions like IMPACTER.