Leni Mayo

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Australia's Workplace Gender Equality Agency

The federal governments’ Workplace Gender Equality Agency is off to a rocky start. In a recent media release it stated that the gender wage gap is 9.1 per cent in 2012.

Graduate Careers Australia, the leading authority on graduate employment issues in Australia promptly responded, saying that the WGEA report was wrong.

The WGEA claim, that a “gender pay gap between female and male university graduates more than doubled last year, increasing from $2000 to $5000 per annum” is disputed by GCA as arising from an overly simplistic reading of, and failure to fully review, the information contained in GradStats.

Calling ‘bullshit’ on a government agency’s report following extensive media coverage must have taken some courage on the part of Graduate Careers Australia management. Well done to them for standing up.

Raw vs adjusted numbers

To get to 9.1% and thereby announce a massive spike in wage gap (up from GCA’s 3% number in 2010), WGEA appears to have aggregated salaries across men and women across all occupations. The wikipedia page on the Gender Pay Gap says:

this comparison is of limited usefulness because men and women exhibit very different characteristics for many of the factors that effect pay.

Men and women choose different occupations, work different number of hours, have a different mix of part-time vs full-time and so on.

Some commentators choose to elide these differences and write about the gender pay gap using raw (unadjusted) numbers.

Alternatively, one can adjust for factors such as occupation, work hours etc and arrive at an ‘unexplained’ gender pay gap number.

WGEA’s media release mixes raw and adjusted numbers within the same release, without clear distinction.

A simple sanity check within WGEA ought to have caught this error. Graduate Career Australia’s 2010 ‘unexplained’ number was 3%. Other studies put the ‘unexplained’ number at between 5 and 7%, and it’s generally accepted that the ‘unexplained’ number is smaller amongst younger workers. A jump from 3% to 9% in the space of two years just smells wrong. Great for grabbing headlines but a misinterpretation of the data and misleading in terms of the overall trend of a declining ‘unexplained’ pay gap number.

Sloppy work isn’t going to help this agency survive a change in government.