Women’s financial progress has faltered for the second quarter in a row amid cost of living pressures, the Financy Women’s Index (FWX) for the March quarter 2023 shows.
The FWX, which measures gender financial equality, fell to 76.1 points in March, down from 76.2 points out of 100 in December as an increasing female underemployment rate, relative to male, took the shine off quarterly improvements in female monthly hours worked and greater gender diversity on ASX 200 Boards.
Bianca Hartge-Hazelman, founder of Financy, says that as interest rates and cost of living pressures climb, so too has the female underemployment rate.
“The growing underemployment comes despite an all-time high in the number of monthly hours worked by women, helped by growth in female-dominated services industries such as Retail Trade, Education and Training and Other Services,” she says.
“We appear to be seeing a growing desire, or perhaps financial need, among women to work more hours but they are not able to fully achieve their employment requirements.
“Given that the gender gap in underemployment rate has widened in an environment of higher interest rates for the past two quarters, the risk is that this is not an aberration and that this may continue, resulting in higher female unemployment and a greater financial strain on women, particularly those on low incomes or single parent families.
“This would be a blow to the financial progress of Australian women and cement the view that they are the shock absorbers of high cost of living pressures, more than men. This could weigh on the annual pace of progress towards gender equality beyond the next June quarter,” said Hartge-Hazelman.
The outlook for gender equality timeframes in Australia
Progress is slowly happening, with the biggest challenges in those areas affected by persistent gender norms such as Education and Unpaid work.
Ms Hartge-Hazelman says that Education (and Expected Earnings) has a worrying time frame to equality, of 139 years.
“Why? The fields of study selected by women are less linked to higher potential earnings and the pace of change in this area is extremely slow moving,” she says.
“139 years to achieve timeframe to equality in the education fields women chose is alarming,” said Annick Donat, CEO of Clime Investment Management.
“Many of these qualifications shape the future of human lives for generations such as nursing, teaching, childcare, and yet they hold less financial ‘value’. How we measure value needs a new perspective,” said Ms Donat.
Looking at the other areas measured by the Index, the median timeframe to equality is represented by the Gender Pay Gap, at 24 years.
This is a slightly worse result than the 22 years in the December 2021 quarter. However, the recent improvement in the gender pay gap to 13.3 per cent from 14.1 per cent in the December quarter provides hope that this should start to come down if that change continues.
Unpaid Work has a time frame to equality of 44 years in 2021, as reported in 2022, down from 59 years in 2020. The improvement is due to men increasing their unpaid work hours, but for women there’s been no change.
The time to equality in Underemployment also worsened in the March quarter as the underlying gender gap widened. It rose to 20 years, up from 18.5 in December 2022.
Superannuation experienced a reduced time frame in the gender gap of median lifetime balance, down to 19 years, from 33 years based on the latest reportable data which captures the 2019 financial year.
Employment improved the time to equality, helped by those improved monthly hours worked by women. Time to equality fell to 27.5 years in March, from 28 years last quarter.
Board Leadership is the best performing area and equality is expected on ASX 200 boards by 2030. The number of women appointed to ASX 200 directorships rose to 36 per cent in the March period compared to 35.5 per cent in December 2022.
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