Gender equality as Australia’s preferred nation-building economic stimulus strategy

by Anne Bunning and Jo De Silva

Anne Bunning and Jo De Silva make the case for a serious gender equality strategy as a more efficient means to achieve the government objective of economic and social wellbeing for Australian families compared with the government’s current strategy of creating jobs for men.

In October 2008, the Rudd Government responded to the global financial crisis with a $10.4 billion “Economic Security Strategy”. By February 2009, in the face of a global recession, the Australian Government responded by allocating a further $42 billion in a “Nation Building Economic Stimulus Plan” (the Economic Stimulus Plan). Three industry sectors received the majority of the benefit of the Economic Stimulus Plan:

• Manufacturing: around $3.9 billion
• Construction: $20.8 billion (repairs and maintenance of school infrastructure – the Building the Education Revolution program - and construction and maintenance of new social housing and existing public housing dwellings)
• Transport and storage: $2.6 billion

These three industry sectors received a total of $27.3 billion or 65% of the total allocation (http://www.economicstimulusplan.gov.au/theplan.htm)

Two-thirds of the federal government’s economic stimulus package has therefore been allocated to industry sectors which predominantly employ men: 76% of the manufacturing, 86.13% of the construction and 76.24% of the transport and storage workforce are men. (http://www.aisr.adelaide.edu.au/gio/data/indicator_employment_industryseg_91_01.html)

The purpose of the economic stimulus package, and the frequently stated objective of the government’s strategy to carry Australia through the global financial crisis, is to maintain employment – to save jobs and support the economic and social wellbeing of Australian families.

Gender Blind Stimulus Package

Unfortunately, the federal government’s economic stimulus is gender blind; it is therefore unlikely to be successful in achieving the goal of maximising the social wellbeing of families. If the federal government undertook a gender analysis of its stimulus package it would discover:

• The wealth of evidence which shows that money earned, or controlled, by mothers is more likely to be spent on children than money earned by fathers. In other words, if the policy aim is to provide economic security for families and enhance the living standards of children, then financial resources should be targeted to women rather than men (Pahl, 1989; Ermisch, 2003 p49; Lundberg et al, 1997; Phipps and Burton, 1998).
• The national 20% gender pay gap, meaning that women on average in Australia earn 20% less than men and therefore have less income to spend on the family (ABS Australia Stats Nov 2008, number 6302.0).
• Women predominantly work in service industries – neglected by the stimulus package – providing support services for which the demand traditionally increases during difficult economic times and/or providing services which are cut during difficult economic times; three in four clerical and service workers are women (2001 census).
• The increasing trend for couples to keep separate bank accounts - because one in five men fear their partner might dip into a joint account, while only one in 12 women take this view (Alliance & Leicester, 2004) – with the generally lower-earning woman spending a higher proportion of her funds on the needs of other members of the family (compared with the man) and having less to spend on her own needs compared with men.
• The increasing use of credit cards meaning that a card in the name of the man allows him to “preserve secrecy about what was bought with the card if he wants to” (Pahl, 2008, p582).

A detailed study in the UK shows that (Pahl, 2000)

• 80% of the household food expenditure is made from money controlled by women, and food represents the largest single expenditure item in a household (at 16% of total household spending)
• 78% of the household expenditure on education and child care is paid by the woman
• 85% of the expenditure on children’s clothes is made by women
• 65% of gambling expenditure is paid by men
• 73% of alcohol purchased by the household is bought by men
• 40% of the household expenditure on men’s clothes is made by women

The Economic Stimulus Plan also provided $12.2 billion in bonus payments to assist households and support economic growth in 2008-09. The payments included a $900 Single Income Family Bonus, $950 Farmers’ Hardship Payment, $950 Back to School Bonus and a $950 Training and Learning Bonus.

The federal government is mistaken to assume an egalitarian distribution of money within a household according to need: the evidence is overwhelming that the gendered nature of household expenditure patterns means that money into the hands of a woman will be predominantly spent on children and other members of the household, while money into the hands of a man will be predominantly spent on entertainment, recreation and personal needs (Pahl, 2008). Work in Asia and the Pacific by the authors confirms the gendered nature of household expenditure patterns as a global phenomenon.

Gender inequality and economic participation in Australia

The initiatives in the Economic Stimulus Plan aim to boost economic growth by .5-1% between 2008-10. And as we have seen, the growth is aimed at male-dominated industries where men will be the major beneficiaries.

In Australia, women make up around 45% of the total workforce and are predominately employed (around 80%) in four industries (see gender indicators online at http://www.aisr.adelaide.edu.au/gio/ for detailed data):

• health and community services, including education
• wholesale and retail trade
• finance, property and business
• recreation and personal services.

The concentration of women in certain industries is a feature of the Australian labour market and is known as “gender industry segregation”. An additional feature of this segregation is that women within these industries are concentrated in the middle to low income brackets, a factor known as “gender occupational segregation”.

Pocock and Alexander explored the impact of gender segregation (1999). Their data, drawn from the 1995 Australian Workplace Industrial Relations Survey (AWIRS), reports an overall gender pay gap of 17%. Using a regression model to research the gap, the authors found that between three-quarters and two-thirds was associated with being in female-dominated work. In other words, gender segregation is the major factor behind the gender pay gap with sectors dominated by women being valued less and paid less than those sectors which employ more men.

As Chair of the House of Representatives Employment and Workplace relations Committee, Sharryn Jackson has for the past eight months headed an inquiry into pay equity and other issues affecting the participation of women in the workforce. As she notes, “When people discover that there’s still a pay equity gap in some industries, their first reaction is to be shocked by it.)(http://www.aph.gov.au/house/house_news/magazine/ath36_fair.pdf)

Gender equality and economic growth

Gender equality can be measured by the economic participation, education, health and political empowerment of women. The link between economic growth and gender equality is well established, including by the Organisation for Economic Cooperation and Development (OECD). A UK study found that better harnessing women’s skills would lead to a 2% gain in GDP (Women and Work Commission, Shaping a Fairer Future, 2006); raising female employment to the same rate as male employment has been identified as a strategy to achieve growth. (Credit Suisse Research, Economics: More Women, More Growth, 2007).

Mörtvik and Spant (2005) argue that a major factor which will influence, if not determine, long-term growth of mature economies is the labour supply and how effectively it is utilised. They found that in mature economies, attitudes toward gender equality and the provision of real opportunities – as opposed to unfunded policy commitments – for combining parenthood with gainful employment are decisive. (http://www.oecdobserver.org/news/fullstory.php/aid/1664/Does_gender_equality_spur_growth_.html)

Overcoming gender inequality

Making better use of female capital requires a range of government policies including:

1. family-friendly policies to increase the labour force participation of women
2. upgrading the status of and wages for traditional areas of women’s work
3. incentives to women to enter science and technology careers, and
4. setting targets and goals for women managers and parliamentarians (OECD, 2008).

Pay equity strategies promoted in Australia vary according to which factor contributing to pay inequity is selected for attention. For example, a focus on gender occupational and industry segregation gives rise to educational and employment strategies to encourage women into non-traditional jobs and industries, and strategies to encourage and support women into management and executive roles within their organisations.

Paid Parental Leave

There are a plethora of initiatives which could be adopted to both address gender inequality and provide an economic stimulus. One such initiative is Paid Parental Leave. The Productivity Commission estimates that Paid Parental Leave would cost $530 million per year: less than 1% of the $42 billion the government provided in its Economic Stimulus Plan.

Professor Margaret Hallock, economist and founding Director of the Wayne Morse Center for Law and Politics, University of Oregon, argues for paid maternity leave as an economic stimulus measure on the grounds that “We can be confident that every dollar of paid maternity leave will be spent. Families who are managing on a lower income when a baby arrives will not be squirreling away savings: they will spend their income,” said Professor Hallock.

“Paid leave would have another benefit. It will put money where it matters: into the pockets of low income households. In both the US and Australia it is low income households that miss out on paid leave, so a good national system has the benefit of helping out those who need it most – helping employers, parents and children.” (http://www.unisa.edu.au/news/2009/160309.php)

The gender blind 2009 federal budget again failed to understand the significance of achieving gender equality as a key strategy for achieving economic growth with its approach to paid parental leave. Gender inequality is alive and well in Australia, at the expense of every Australian.

References

Alliance & Leicester (2004), Modern women share their hearts but not their bank accounts, Alliance and Leicester, Leicester
Ermisch , J (2003), An economic analysis of the family, Princeton University Press, Oxford
Jackson, S (2009) quoted in Fair and Square, About the House, Issue 36, pp 46-49
Lundberg, Pollak and Wales (1997), Do husbands and wives pool their resources?: evidence from the UK child benefit, Journal of Human Resources, 32, 3
Mörtvik and Spant (2005), OECD Observer, number 250
Phipps, S and Burton, P (1998), What’s mine is yours: the influence of male and female incomes on patterns of household expenditure, Economics, 65
Pahl (1989), Money and marriage, Macmillan Education, Basingstoke
Pahl (1999), Invisible Money: Family finances in the electronic economy, Policy Press, Bristol
Pahl (2008), Family finances, individualisation, spending patterns and access to credit, Journal of Socio-Economics, 37, pp 577-591
Pocock and Alexander (1999), The price of feminised jobs: new evidence on the gender pay gap in Australia, Labour and Industry, 10(2), pp 75-100

The Authors

Anne Bunning has worked in government, the private sector and the community sector as well as being an adviser to state and federal Ministers. Anne is an agricultural economist with a Masters in international development, working in Asia and the Pacific over the last 15 years and specialising in gender, microcredit and poverty. Anne is currently Chief Executive of the YWCA of Adelaide.

Jo De Silva has worked in non-government organisations since the early nineties, including roles with Oxfam Australia, Foundation for Developing Compassion and Wisdom, Amnesty International, the Conservation Council of SA and The Wilderness Society. Jo was Economics and Social Justice Adviser to Australian Greens Senator Bob Brown. Jo holds a Masters of Environmental Studies and is currently Policy Officer at the YWCA of Adelaide.

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Source: Australian Options, Issue 57, Winter 2009, pp. 3-6.