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How does the Pay Gap Happen?

Pay setting

The way that pay is set (by award, collective, or individual agreements) can affect the size of the gender pay gap.

For instance, among full-time employees, the average weekly total cash earnings for those who had their pay set by individual agreement are higher for men than women ($1,469.90 and $1173.00 respectively).

Similarly, earnings for employees who had their pay set by collective agreement were higher for men ($1,488.20) than women ($1252.70).

The difference in earnings, however, was significantly less for employees whose pay was set by award only ($($760.90 for men and $748.40 for women).

This suggests there is a more equal distribution of pay between women and men when pay is set by federal or state industrial authorities (award only, pay gap of -1.7%) than when it is set by agreements made collectively between employees and their employer (pay gap of 15.8%) or an individual agreement with the employer (pay gap of 20.2%).

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