Australia's path to gender financial equality is experiencing significant challenges, as highlighted by the latest Financy Women's Index (FWX).

Progress to gender financial equality in Australia has taken another backwards step with the FWX showing that women are a long way from parity with the combination of key indicators suffering their worst start to a calendar year since 2022.

Declines in the FWX Employment and Underemployment sub-indexes have been driven by weaker economic conditions that have disproportionately affected women.  The September quarter saw female monthly hours worked increase by only 0.8 per cent, compared to 1.3 per cent for men.

Dr. Shane Oliver, Chief Economist at AMP, noted: "The September quarter Financy Women’s Index highlights increasing evidence that females are seeing more sensitivity to swings in economic activity than men, possibly reflecting their part-time status in discretionary services sectors. This is a big turnaround from times past when it was men in manufacturing and construction who were most vulnerable. The key is to enable more women to work full-time and in more diverse parts of the economy, so they are not as vulnerable to the vagaries of the economic cycle."

“Over the past decade, when gross domestic product (GDP) growth has been stronger, we have seen improved employment growth for both men and women,” said Bianca Hartge-Hazelman, CEO of Financy.

“This has also been correlated with progress in economic equality, as measured by the FWX.

“But whenever GDP has weakened, we have tended to see female employment behave more volatile than male and this has recently led to declines in the FWX. It’s also important to note that FWX has been relatively flat since 2020.”

Chart 1: FWX progress v GDP v monthly hours worked by Gender

Source: Financy September 2024

Victoria’s Minister for Women and Jobs, Natalie Hutchins, said: “Interest rates, unstable political environments in countries like the United States, and global wars are increasing the cost of living, with women often paying the price.”

The Index shows Australia's path to gender equality in the workforce faces significant hurdles, with a 26.8-year wait for equality in Employment and a 20.6-year wait in Underemployment. The best case scenario for equality is 5.1 years via ASX 200 Board Leadership, followed by a 17.7 year wait in Superannuation savings. The wait for pay parity, and indeed the median overall timeframe for gender equality to be achieved, is 22.1 years – a generation away.

"News of Donald Trump’s return to the US presidency has come as a shock to many with fears that it will lead to a setback in progress on gender equity and more broadly in relation to diversity, equity, and inclusion,” said Dr Oliver.

“While Americans who switched sides were motivated by 'cost of living' concerns rather than rejecting progress on issues like gender equity, it does run the risk that gender equity will be less of a focus for the next few years in the US. We need to guard against this happening in Australia as well, to the extent that US trends often show up in Australia with a lag. The good news is that through the last Trump administration, the FWX continued to trend up."

“Whilst we have seen female wages grow slightly faster than male wages, and this helped deliver a record breaking improvement in the FWX Gender Pay Gap sub-index, the fact that women still earn 11.5 per cent on average less than men, makes it all the more difficult to keep up with ongoing cost of living pressures, particularly those that relate to housing, groceries and utilities,” said Hartge-Hazelman.

“Compounding this is the fact that women tend to occupy the most insecure forms of employment, such as part-time and casual roles, as these are often the job types that businesses pull back on when conditions get more difficult,” she said.

“The FWX report underscores the need for policymakers and businesses to prioritize gender equality, even amid economic challenges.

“Encouraging greater flexibility in full-time work and ensuring women's jobs are not disproportionately affected by economic pressures are crucial steps forward,” said Hartge-Hazelman.

Natalie Previtera CEO of NGS Super added: "The cost-of-living crisis is a stark reminder of the importance of financial independence for women. As leaders, employers, and policymakers, we all have a role to play in creating workplaces where women can thrive, even in the face of economic challenges. By prioritising equity and inclusion, we can build a stronger, fairer Australia for everyone".

The Financy Women’s Index TM (FWX) is a quarterly measurement of the economic progress of women and timeframes to gender equality in Australia. The FWX is produced by Financy, which is a data insights and tech company that provides the IMPACTER Diversity and Inclusion platform. The Women’s Index is supported by an Advisory Committee which includes Dr Shane Oliver, Simone Cheung, Roger Wilkins, Leonora Risse, Bruce Hockman, Rhiannon Yetsenga and Nicki Hutley. The Index is proudly sponsored by NGS Super, the Ecstra Foundation, Aspire Planning, Seven Consulting, HeirWealth and PritchittBland Communications.