Where’s the Gap? Follow-up post

April 12, 2016 § Leave a comment

A friend read my previous post and made some comments to me, and I thought it might be a good idea to address them in a follow up post.

Why the bit about HECs debt and super?

The HECs debt is rising, and there is little chance of government recovering all of this debt. A recent Grattan report suggested lowering the repayment thresholds in order to increase the number of people repaying their HECs debt by nearly 50%. Future policies in this space will probably focus on how to get this debt repaid.

More than half of tertiary graduates are females, we can make a crude but reasonable extrapolation that more females than males will shoulder HECs debts. Because of the gender pay gap, females are more likely to take longer to pay off their debts, or indeed, fail to pay all of it. This means the cost will fall to taxpayers.

The situation with super is similar. Australia has an ageing population, and there are more females than males in higher age groups (e.g. over 60 yrs), this means that over time, we will get more and more elderly females living off their super.

Because of the gender pay gap, these women have probably accumulated less super then men, and will therefore rely on welfare benefits to meet the gap between their living needs and their super payout. The cost of providing welfare will also fall to taxpayers.

The impetus for providing these arguments is to say that in addition to equal pay being a good thing in principle, there are also economic incentives to eliminate this pay gap. Making sure there is equal pay benefits us all. My primary argument is still that equal pay is something that we should strive for on principle, but for those skeptics out there who think the pay gap is just the result of women making poor life decisions (and therefore why should we help?) these arguments show that the gender pay gap can affect everyone, and that more equal pay benefits us all.

Should we be aiming at gender-neutral policies?

My friend mentioned that parental leave policies should aim to be gender neutral, and that in fact this whole debate about the gender pay gap should be discussed on gender neutral terms. It’s about empowering both sexes to do things outside of their traditional gender roles, which will help address the differences between male and female working hours, and therefore level their pay.

However, I believe that the time has passed for entirely gender-neutral policies, at least for parental leave schemes anyway. We are at a point where the norm is still stacked against the female. The norm is that the mum stays home to look after the kids while the dad works. To proactively combat that norm, we need policies in place that still allow mothers to take time off work to look after children, but also does more to encourage fathers to take leave. For example, a period of parental leave that can be taken by either parent, and an additional, say, 2 month period that is reserved for the father on a take it or lose it basis.

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