Women are not closing the super gap with men, despite rises in the superannuation guarantee and improvements in maternity leave with some private employers.
In fact, the gap has actually widened between male and female super in many age cohorts.
The following table, built up from APRA data, shows that all women with superannuation improved their balances in relation to men only marginally between 2015 and 2021.
The gender gap for average balances between all women and men in 2015 was 26.4 per cent and this had improved marginally to 25.1 per cent by 2021.
However, for women aged between 25 and 34, 45 and 49, and 65 and 69, the gap has increased.
For women between the ages 25 and 34 – in the important early career years – the gap has widened significantly from 8.25 per cent to 19 per cent.
That comes despite some improvements in maternity leave, particularly in the private sector.
There was also a significant widening in early retirement years, from 65 to 69 with the gap moving from 11.5 per cent to 12.2 per cent.
That means that women are not improving their relative positions as they enter the all-important retirement years when they will have to make their savings stretch over their later years.
There are a number of factors driving the change, according to Women in Super CEO Jo Kowalczyk.
An important one is that men continue to dominate high-income jobs, the ones that allow enough free cash to make significant voluntary super contributions along with higher super guarantee payments.
“High-income jobs remain really highly gendered and at the same time women are doing more work in lower-paying feminised industries than they were 30 years ago,” Ms Kowalczyk said.
More women in low-paying jobs
“We’ve just done a report with [consultancy] Right Lane which found that from 1986-87 to 2021-22 there was a percentage increase in the number of women in female-dominated jobs like child care, receptionist, general clerks and primary school teachers,” Ms Kowalczyk said.
As the population ages and there is more demand for aged care, women are being called upon to do that work.
“We’re also seeing a significant increase in unpaid care.”
Much of that work is being done by women who fit into what Ms Kowalczyk calls “the sandwich generation – looking after kids and parents,” she said.
Independent economist Nicki Hutley says that women are still taking significant time out of the workforce to look after young children and this happens during what are both the prime child-bearing ages and the prime career-building ages – 25 to 34.
That fact probably explains why the gender gap in super balances widened from 8.25 per cent to 19 per cent between 2015 and 2022.
Because child-caring duties significantly fall on women, “more than half of all women don’t work full-time,” Ms Hutley said.
And those caring duties mean the sandwich generation is not really available to work more, even if they could.
“Almost 20 per cent of women say they can’t look for any more hours of paid work for family reasons,” Ms Kowalczyk said.
The reality of the gender wage gap is shown on the above chart produced by research group Roy Morgan.
In all age cohorts men earned more, with the gap ranging from 14.2 per cent to 29.5 per cent.
The lower figures were recorded between the ages of 18 and 34, which is generally the time that women would leave the workforce or reduce hours to have children.
The figures for women’s workforce participation give weight to Ms Kowalczyk’s view that women are increasingly employed in low-income jobs.
“There have been significant gains in employment over the last decade with women’s workforce participation,” Roy Morgan CEO Michele Levine said.
Back in December 2012, only 57.9 per cent of women were in the workforce, but this had grown to 65 per cent by March 2023, a rise of 7.1 percentage points. Meanwhile, men’s participation grew 1.2 percentage points to 73.2 per cent.
However, while women’s participation rate has lifted, 45.3 per cent of women are in part-time employment compared to only 23.5 per cent of men.
“Clearly part-time work is associated with a lower annual income than full-time work and this continues to contribute to the ongoing gender superannuation gap,” Ms Levine said.
It’s getting worse
The APRA figures quoted here finish in 2021, but “it’s going to get worse because of the early release arrangements introduced during COVID,” Ms Kowalczyk said.
That scheme allowed people in trouble to withdraw up to $20,000 from super.
“While men withdrew more super through early release, women withdrew proportionally more of their savings [because their savings were lower].”
She said men’s higher incomes mean they get 72 per cent of all superannuation tax concessions while women get only 28 per cent.
“The Grattan Institute has found that for every dollar that women receive in tax concessions, men receive $2.52.”
The government has pledged to double the tax on income from super balances of $3 million or more.
This will produce $2 billion extra for the budget, money that should be used to help deliver superannuation payments for women on maternity leave, Ms Kowalczyk said.
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