Australia’s gender pay gap is shrinking, thanks to recent pay rises in the care economy, but unions are warning private companies must still do more to narrow earnings differences.

Australian Council of Trade Unions data published on Tuesday showed the gender pay gap is at a record-low 11.5 per cent, having fallen 1.3 percentage points each year since 2022.

But the ACTU said the pay gap still means women, on aggregate, lose 42 days’ worth of earnings compared to men each year, which is equivalent to working for free from now until 2025.

“Australian women effectively turn up at their jobs and work for ‘free’ for the rest of the year because of the gender pay gap,” the ACTU said.

Private sector lagging

Private companies in particular are being urged to step up action to close the gender pay gap, with the ACTU research finding the gap is still more than 14 per cent, far higher than the gap in the public sector, which is closer to 10 per cent.

Overall, however, unions have noted the rapid progress on closing the gap under a spate of industrial relations reforms since the Albanese government was elected in 2022.

A big driver has been historic pay rises for workers in the care economy, namely in women-dominated industries such as early childhood education and aged care.

Direct care workers under the Aged Care Award have experienced pay increases ranging from 20.8 per cent to 28.5 per cent over the past two years.

Source: ACTU

Nurses, meanwhile, have had award minimums rise between 17.9 and 23 per cent.

“A woman working full time is now $36 a week, or nearly $1900 a year better off, than if the Coalition’s lacklustre progress had continued under this term of government,” the ACTU said in its report.

Reverse trend

There are still massive differences between male and female pay across industries, with the gender pay gap actually increasing in several parts of the economy.

That includes accommodation and food services; media and telecommunications; and administrative and support services.

“The largest increase was in arts and recreation, with the gap widening by 9.1 percentage points,” the ACTU said.

In other industries like health care the gender pay gap has shrunk over the past two years and is now down from more than 30 per cent back in 2013 to just over 20 per cent today.

The biggest narrowing in the gender pay gap over the past two years has been in the transport, postal and warehousing sector, where the difference has fallen by 6.1 percentage points.

‘Life changing’ benefits

ACTU president Michele O’Neil said that the pay rises have been “life changing” for workers.

“Government policies have a direct effect on the underpayment of women workers,” O’Neil said.

“The gender pay gap is closing three times faster under this current government than the previous government.”

More broadly, women are also still doing a disproportionate amount of unpaid care work across the economy.

Women spend 30.2 hours per week undertaking unpaid care and housework, compared to 21.8 hours for men, reducing the capacity for workforce participation and career progression.

“A lack of access to secure, flexible and quality work that accommodates caring and other responsibilities means that all too often women have to rely on insecure and low-paid work for their income,” the ACTU said.

“Women are more likely to be reliant on award-based, low-paid and insecure work than men, and most casual workers are women.”