Aussie women facing $100k increase to earnings gap

The lifetime earnings gap between men and women may have increased by $100,000 due to job losses during COVID-19, according to a report by the Grattan Institute.

The report found that at the peak of the lockdowns in April last year, almost 8 per cent of Aussie women had lost their job, while 4 per cent of men had lost theirs.

Additionally, women’s total hours worked was down 12 per cent compared to 7 per cent for men.

• Also read: Australia's tax system stacked against these Aussies: report

• Also read: Why does Australia need a Women’s Economic Security Minister?

• Also read: High earning Aussie women at 35% higher risk of domestic violence

Grattan Institute modelling suggests that spending just six months out of work could increase the gender lifetime earnings gap by $100,000.

“The economic effects of time out of the workforce are magnified for women, especially mothers, many of whom are already on a ‘stop/start’ career path,” the report said.

“Women’s employment improved as the economy re-opened, but many groups have not caught up, and on current forecasts, unemployment will remain too high for too long.”

The report said mothers in couples, and single parents (80 per cent of which are women), were found to be more likely to leave the labour force than any other group.

“Women of childbearing age also gave up study in record numbers. For single parents, paid hours remain substantially below pre-pandemic levels,” the report said.

WATCH: Tips from a multi-millionaire on how Australian women can take control of their finances.

The report suggested the Federal Government needs to build a broader-based recovery targeting additional stimulus in over-looked sectors.

It said areas like hospitality, universities and tourism, which have a large female workforce, require more Government assistance to help with economic recovery.

“A longer-term focus on the care economy would boost economic growth and improve the living standards of all Australians, while reducing women’s economic disadvantage,” it said.

“Making childcare cheaper is the biggest thing the Government can do to support women’s employment. Investing in aged care would create jobs for women, and improve living standards for older Australians. Together, these reforms would help Australia to ‘build back better’ after the COVID crisis.”

Not only this, but the report said the stimulus measures rolled out by the Morrison Government were “oblivious” to the impact on Aussie women.

“Despite the very different nature of this recession, stimulus was straight from the playbook of previous downturns. The focus was on personal income tax cuts, investment tax breaks, and a big spend on infrastructure,” the report said.

“More direct support flowed to the male-dominated construction and energy sectors than to all other sectors combined.

“And while some state governments delivered much-needed support for the female-dominated services sectors, it wasn’t enough to redress the imbalance.”

The report has called on the Federal and state governments to learn from the recession and ensure stimulus is more evenly distributed between sectors in the event of a future downturn.

Take control of your money and learn to maximise it with the Women’s Money Movement! Join the club on LinkedIn and follow Yahoo Finance Australia on Facebook, Twitter and Instagram, and subscribe to the free Fully Briefed daily newsletter.