Gender Earnings and Part‐Time Pay in Australia, 1990–1998
| Author | Alison Preston |
| Published date | 01 September 2003 |
| Date | 01 September 2003 |
| DOI | http://doi.org/10.1111/1467-8543.00280 |
Gender Earnings and Part-Time
Pay in Australia, 1990–1998
Alison Preston
Abstract
This paper studies the effects of enterprise bargaining on the pay position of
women and other target equity groups. Contrary to a priori expectations the
paper shows a convergence in full-time and part-time gross gender pay gaps fol-
lowing the adoption of decentralized wage bargaining. Convergence in the latter
reflects compositional (human capital) effects: the entry of less qualified and
less experienced males into part-time employment. Overall the results show a
deterioration in the pay position of men employed full-time relative to women
and part-timers (men and women) brought about by slower wage growth
amongst men in full-time employment.
1. Introduction
In October 1991 significant changes were made to the Australian industrial
relations system aimed at giving primacy to enterprise (decentralized) bar-
gaining and introducing more flexibility into the system. At the time, con-
cerns were expressed about the likely impact such developments would have
on the relative pay position of women and other target equity groups such
as part-time workers. A number of published and yet-to-be published studies
have demonstrated a significant link between the size of the gender wage gap
and prevailing bargaining arrangements. Centralized bargaining was typi-
cally associated with smaller gaps (Gregory and Ho 1985; Gregory and Daly
1990, 1992; Blau and Kahn 1992; Rubery 1992; Whitehouse 1992).
Since the adoption of enterprise bargaining in 1991, the Australian wage
structure has changed, although not entirely in the manner predicted.
Between 1990 and 1998 the gross gender–wage ratio in the full-time labour
market converged four percentage points to 88.8 per cent. In the part-time
labour market the same ratio converged by 10.3 percentage points to 103.1
per cent. Given the literature concerning systems of pay determination and
British Journal of Industrial Relations
41:3 September 2003 0007–1080 pp. 417–433
Alison Preston is at the Graduate Business School, Curtin University of Technology, Perth,
Australia.
© Blackwell Publishing Ltd/London School of Economics 2003. Published by Blackwell Publishing Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
gender equity, these trends are curious, although not unique (see Bernhardt
et al. 1995; Bruegel and Perrons 1998; Bell and Ritchie 1998).
There is now a growing consensus that the gender pay gap is a ‘morphing
beast’ (Pocock 1991: 1), affected as it is by a number of counterbalancing
forces, including the institutional features of the wages system, human capital
considerations (Preston 1997), the overall wage structure (Blau and Kahn
1996) and the overall wage distribution as reflected in patterns of wage
inequality (Bernhardt et al. 1995; Whitehouse 2001). Aggregate data, there-
fore,present a poor reflection of the underlying causes and trends of gender
pay differences.
In this paper data covering the period 1990–8 (i.e. before and after the
adoption of more decentralized bargaining) are used to disaggregate
observed trends in Australia and to shed further insight into the debate over
institutions (bargaining structures) and the gender pay gap. A central ques-
tion in the investigation is that of ‘male gains or female losses?’ Within the
literature there is increasing concern that observed gains in the relative pay
position of women have been underpinned by a deterioration in the economic
position of men (Bernhardt et al. 1995; Bruegel and Perrons 1998).
While the empirical approach employed in this paper is not new, a number
of beneficial features of this study are worth highlighting. First, in under-
taking a ‘within’-country analysis, this paper overcomes problems faced in
cross-country comparative studies, such as differing historical, cultural char-
acteristics as well as other features of the bargaining systems (e.g. levels of
coordination) (Flanagan 1999). The second advantage lies in the fact that the
unit record data employed in the paper allow the computation of hourly
wages and, thus, a study of part-time workers.
The paper is organized as follows. Section 2 provides an overview of devel-
opments with respect to wage fixing in Australia.Section 3 deals with matters
of method and definition. Section 4 presents the results. Section 5 concludes
the paper and offers some directions for future research.
2. Background: changing Australian bargaining structures
It is well known that arrangements for the conduct of collective bargaining
vary substantially among countries. Important determinants include institu-
tional structures, union density rates, political climate, ideologies and cultural
norms (Flanagan 1999). In Japan and the United States, for example, most
negotiations take place at the company or workplace level. Centralized bar-
gaining is characteristic of Scandinavian countries, and, throughout much of
the last century, of Australia and New Zealand as well.
In the late 1980s, in response to growing pressure from the business lobby,
the trade union movement and the government, Australia’s peak industrial
tribunal (the Australian Industrial Relations Commission, AIRC), embarked
on a set of reforms designed to decentralize the level of wage determination.
The reforms culminated in the adoption of the ‘Enterprise Bargaining
418 British Journal of Industrial Relations
© Blackwell Publishing Ltd/London School of Economics 2003.
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