Community sector workers say it’s time for equal pay

June 3, 2011
Pay equity rally, Melbourne. December 2010. Photo:

Forty years after the first equal pay test case, the gap between male and female wages continues to widen.

Australian Bureau of Statistics figures, released on May 20, 2010, put the pay gap (as of February 2010) at 18%. Women on average now earn $239.30 a week less than men. The pay gap increased 0.5% over the past quarter (from 17.5%) and 1.5% over the past year (from 16.5%).

The gap is now at its highest level since August 1994. This pay gap means, on average, Australian women have to work an extra 66 days to earn the same as men.

The gender pay gap is higher in the private sector: 21.7% compared with 12.1% in the public sector.

Industries with the highest pay gap are financial and insurance services (29.3%), health care and social assistance (29%), real estate (28.3%) and professional, scientific and technical services (27.6%).

Industries with the lowest gender pay gap are transport, postal and warehousing (6.5%), public administration and safety (8.6%) and education and training (9.8%).

The gap between men’s and women's pay remains at 17%, the National Centre of Social Economic Modelling (NATSEM)’s report of March 2010, The Impact of a Sustained Gender Wage Gap on the Australian Economy, said.

The report's authors used micro-economic modelling to determine that the gender factor accounted for 60% of the wage gap between men and women. Industry segregation was the second largest factor, accounting for 25% of the gap. A number of industries are populated primarily by men, others mainly by women.

Overall, the 17% wage gap results in less incentive for women to work and could be worth about $93 billion, or 8.5% of GDP each year, NATSEM found.

Despite this broader context of the widening pay gap in Australia, social and community service (SACS) workers can celebrate a victory for pay equity with the interim decision by Fair Work Australia (FWA) on May 16.

FWA concluded “that for employees in the SACS industry there is not equal remuneration for men and women workers for work of equal or comparable value by comparison with workers in state and local government employment.

“We consider gender has been important in creating the gap between pay in the SACS industry and pay in comparable state and local government employment.”

The FWA decision is a historic step in the long struggle for pay equity. However, the struggle is not over. The unions mounting the case in FWA, led by the Australian Services Union, are seeking pay rates of the order of those achieved two years ago by the ASU in Queensland — up to almost 40%.

A final decision is not expected until after hearings set for August. The next stage of the campaign, being launched at the ASU national day of action on June 8, is to achieve full funding from federal, state and territory governments for the pay outcomes of the FWA decision.

The Gillard government is paying lip service to equal pay, but the only government prepared to commit to funding the outcomes of the FWA case was the former ALP Victorian government. No current government has committed to funding.

FWA said no government had said they would not fund the outcomes — although the O’Farrell government in NSW claimed it would cost the state $998 million over five years, requiring cuts to services and possible tax increases, the May 17 Sydney Morning Herald said.

Evidence before FWA from employers showed that most workers in the SACS industry worked for not-for-profit organisations that rely on government funding.

Salaries are the largest component of expenditure (up to 80%). However, funding models that rely on contracting and fees for services in the context of competitive tendering have resulted in a race to the bottom.

This is leading to a restructuring of the sector. Prior to tendering for “outcomes-based” funding, the predominant mode of service delivery was through locally-based, community organisations, which reflected local service needs and were visible and accountable at the local level.

This is now shifting to large, often church-based, charities, with the capacity to tender for services over a range of programs and geographic areas.

These large organisations are not accountable to local communities, and are often anti-union. A small number of these charities supported the unions' application to FWA, subject to resolution of funding issues.

Mission Australia drew attention to the potential impact of the claim (including penalty rates for some crisis accommodation workers) and opposed the sleepover provisions claim. Sleepover provisions were in previous state awards but stripped in the new modern award.

Even full funding under the current “outcomes-based” models, will not fund wage justice for community workers.

What is needed to sustain the community sector are funding programs that realistically fund the “inputs” — wages, costs and administrative overheads.

There should be provision for agencies to negotiate on a program-wide basis to set wage rates for workers in all agencies.

There was general agreement in evidence presented to FWA that the impact of a pay equity decision (in the absence of more government funding) would be reduction in services and job losses.

The government argued that funding increases would be at the expense of other services. But underpaid SACS workers have been underwriting the community sector for decades.

They are highly professional workers who work to empower the excluded and pick up the pieces of social dislocation. Wage justice for SACS workers is also social justice for the poor and disaffected.

The case before FWA is historic. But without a strong grassroots women’s movement such legal victories can remain mere abstractions or be rolled back, as has been the case in the 40 years since the first equal pay decision.

[Margaret Gleeson is ASU national delegate of the year and a member of Socialist Alliance.]

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