If you think widening gender pay gap was an issue of the past for advanced economies such as Australia, think again. Recent statistics have revealed that Australia has plunged behind our OECD counterparts since its peak at 2004 due to a reverse trend arising in the past decade. Extensive media coverage combined with feasible policies and institutions have arisen in an attempt to tackle the issue however none seem to have successfully eradicate it. Consequently, leading us to search for a plausible resolution from historical and notable economic icons such as Henry George.
Whose advice may assist our nation in reducing the gender wage inequality or abolishing it altogether. George published numerous remarkable texts and theories, on the eventual basis of which was to eradicate all economic problems including any manner of inequality, by the establishment of a single tax system. Through adapting the phenomenon of rising wage inequality with his contextual framework and distinct style of seeing economics, unique remedies will develop helping us alleviate this issue.
In the 1800’s Henry George was said to be not only one of the most illustrious men in the United States, but also had an enormous following in places such as Denmark, UK, Australia and New Zealand. This particularly after the success of his book Progress and Poverty, in which he gave birth to concepts such as single tax system and Georgism. These concepts will be profoundly discussed later in the report. However, all his success didn’t come easy. It all began when George was born into a lower middle class family and although he was regarded brainy by his teachers, he ended his formal studies by the age of 13.
He headed to Melbourne and Calcutta in search of occupation where he saw at first hand the contrast of a rich vibrant city and decaying overcrowded a city. After his short exploration overseas he settled down in San Francisco, where he married at a young age of 22 and had 4 children. This was a very significant moment in his life, as his family were engulfed in poverty and unable to feed his family he was reduced to begging in the streets. So much so that he was ready to snatch money from the pedestrian if they didn’t not help.
Such punishing life experiences inevitably shaped his stance on the notion of equality and socialism. In which his philosophy was based on freedom and aimed to deprive all the unjustified gap between the affluent and the poor. “For those classes who in the midst of wealth are condemned to want, suffer all the privations of the savage, without his sense of personal freedom; they are condemned to more than his narrowness and littleness, without opportunity for the growth of his rude virtues; if their horizon is wider, it is but to reveal blessings that they cannot enjoy. ”
Henry George has left his mark on earth till this date in the form of Georgism, a treatise that was mentioned in his widely popular book Progress and Poverty. In which he argued that “every individual has the right to land as their equal right to breath air”, and also proposed removal of economic rent by natural monopolies as it not only deterred the economy but will also help reinstating equality. Henry also appointed that population, rent and the value of land all have a strong positive correlation thus claimed by holding on to piece of land in the city for a period of years is enough to make its landlord very rich.
It was in this he saw evil as the profit was not derived through working or in anyway bestowing the community but due to sheer fortune. He also proposed a solution in regards to this very issue a single tax system, an exclusive tax on the value of the land aiming to raise wages and capital, generate employment, eliminate poverty, and reinstate equality. Emphasising massive redistribution of wealth ate all taxes except for the tax on land.
He was also a member of the Fabian society; a British organisation whose main purpose was to promote doctrines of socialism through reformist effort in democracies. The society also endorses gender equality, through political movement to achieve increase representation for women in not only political but also public aspects of life, showing use that Henry was striving equality in all forms. Women rights in the days of Henry George were very different if compared to Australia in the modern context.
Men in that period were predominantly the bread winners of the family, whilst most women undertook activities such as housekeeping and upbringing of the children. A change however was taking place during the late 1800’s as women employed in economy spiked from 2. 6 to 7. 8million, but the high paying jobs continued to go in favor of men. In the field of political affairs, females got granted the privilege to control their savings, own properties, and also take custody of their children in the case of a divorce.
Women in those days were increasingly becoming better off as the belief of their intellectual inadequacy was in fact silently but progressively fading away. Thus, generally speaking it can be said progress towards gender equality was striding at quicker pace at that time when compared to these days where it appears to be stuck in a standstill. Although George has not come out and explicitly spoken or written about the phenomenon of widening gender pay gaps, as it might’ve not been seen as an important issue at the time.
His actions however clearly indicated that he was a person that was devoted to anti discrimination, wether it be in relation to their age, disability, health, gender, ethnicity, religious beliefs and sexuality. He was in fact an outspoken advocate for women’s suffrage throughout his career, “one sex of voice in public matters, and that we could in no way so increase the attention, the intelligence and the devotion which may be brought to the solution of social problems as by enfranchising our women”.
This stance in favour of equal political privileges of his does in a way tranquilly endorse the advancement of women in higher education and literature, their entrance into professions and occupation in private and public institutions. Thus it is safe to comment that George would’ve taken the issue of gender pay gap inequality seriously and would be more than willing to device reforms that would shrink this issue or diminish it altogether. Therefore, through understanding his view on the rising gender pay gap inequality, it can easily be adapted to a contemporary context such as Australia in the 21st century.
Although Australia’s gender pay gap has progressed long way since the days of George, it has however taken a detour in the past decade as depicted by statistical data composed by Average Weekly Earnings (AWE) survey. It illustrates that the nation reached an all time low on gender pay gap on November 2004 with the gap being 14. 9%, whereas on November 2015 it stood at 17. 3% that’s a loss of 1. 1% from November 1994.
This data may be puzzling and hard to digest for many members in the community as it translates to a widening wage gap by 0. % per annum, whilst many of us believe the contrary has been taking place all along. To figure out what has been causing the widening gender pay gap in Australia and how to solve it, we will have to carefully examine the most detrimental factors leading to this reverse in trend and then propose solutions accordingly through breakdown of the issue. A series of proposals and institutions will have to be implemented to tackle this phenomenon as a single handed policy is not component enough to resolve it fully.
Close study of the factsheet composed by Average Weekly Earnings (AWE) survey findings single out the 5 specific areas that are impacting the wage gap destructively. All of them of which are listed bellow. 1. The pay gap is found to be higher in private sectors than public companies or state authorities. 2. Finance and insurance services have the largest percentage of gender pay gap in Australia.
3. Another amusing fact that emerged from the study conducted was that companies in the field of consultation, IT, Air Industries to the least effort to address the gender pay gap issue. . Inequality is found out to be higher in managerial positions at 28. 8%, a considerable 7% higher than non managerial positions. 5. A massive 73. 7% of the organisations surveyed have not conducted a gender pay gap analysis throughout their lifespan. Solving problems 1-5 by concurrently keeping Henry George’s philosophies and principles in mind would be to instate an independent governing body called GPEAA. GPEAA stands for gender pay equality auditing authority, that will serve 3 primary functions.
First of which is to make sure that equal salaries are being rewarded for the same work done irrelevant of their sex or ethnicity. The second rule will enforce that all firms employing more than 20 workers have to conduct a gender pay gap analysis on a yearly basis for random auditing purposes. The third is to reprimand law abiding firms that fail to follow rules set out. This institution will not only serve justice to the workers affected by such unfortunate circumstances but also help abolish the notion of males being patriarch or somewhat superior.
This solution parallels the teachings of Henry George in which philosophies embodied the danger of economic inequality posed to democracy. Endorsing an institution such as GPEAA, would bring in so many benefits for example firms will behave to their best interest which is to follow the rules of GPEAA to avoid negative media coverage, fines and as a result avoid a subsiding customer base. This will ultimately lead to gender pay gap equality in both public and private sectors of Australia’s economy.
Also help dissolve any pay gap discrepancies associated with problem four and problem three because they are direct outcomes of gender bias. Thus any employee that fills cheated upon can seek assistance of GPEAA through directly consulting with them. However, there are also some limitations of this proposal. The first being the cost associated with such an institution are likely to be high and will put a strain on the Australia’s budget. Another limitation is a rather complicated one which is to measure the if the work done by both sexes is equal.
For example, it is relatively easy to measure work done in industries such as retail however the same cannot be generalized into financial sectors such as a hedge fund. In firms like a hedge fund, a workers input is measured on the performance and results, usually measured in the value added to the firm. Therefore, it would be wrong of us to penalise a man for example if he is better at closing deals and thus benefits the firm more than his female colleague even though if it were a direct result of him being man in this particular industry.
Situations similar to these can arise in modern society as there are currently more male workers in top posts and therefore have a higher chance of getting along due to lower social friction. This raises a crucial yet an intriguing issue of allowing a male to be paid higher wage justified by his higher economic benefits brought to the firm, although even if its due to an indirect result of bigotry that has shaped the world we currently live in. Vice versa also applies to men in industries such as modeling, this is because modelling is a female dominated industry.
Modelling firms can value a female model more than a men model and should be entitled to pay them a higher wage if they bring more economic benefits to the firm. To make my point even more concrete, lets take an example of soccer players. Evidently male players earn more than women, however this completely seems to be justified logically as male soccer competitions earn more revenue from ticketing and broadcasting rights when compared to their female counterparts. So it would be injustice to the men if the economic benefits that were earned by them were to be shared with the female players.
In cases similar to the ones depicted above, there is nothing wrong if the gender pay gap were to be unequal in favor any sex depending on the circumstances. Therefore, it has been clearly demonstrated above that by grasping George’s view on equality, it can easily be adapted to solve the phenomenon of a modern context such as the widening gender pay gap in Australia. This is showed through establishing institutions such as GPEAA which ultimately help in serving justice to the workers affected by such unfortunate circumstances but also help abolish the notion of a dominant and an inferior sex.
