Feminist economics posts

Feminist economic critiques and Australia’s equal remuneration hearing

Do feminist economists have a key competitive advantage in the area of contributing to understanding the low wages associated with care work?

If so, perhaps it lies in their understandings about the limitations of mainstream economics and understandings of different approaches to theory and research. An example of this capacity occurred in 2010–2012 in Australia when a national tribunal, Fair Work Australia,* heard a case about the low wages paid to social and community care workers. The hearing was brought before the tribunal by unions who argued that the work done by Social and Community Sector (SACS) workers was under paid, in part, because the work is performed by a highly feminized workforce. The case represented a major precedent in the tribunal’s interpretation of 2009 legislation, which gave it authority to ensure that “there will be equal remuneration for work of equal or comparable value.”

In this case, the evidence brought before the tribunal included several academic analyses of the links between gender, care, and low wages. One analysis was undertaken by three Australian members of IAFFE, Siobhan Austen, Therese Jefferson and Alison Preston.  This analysis provided an opportunity to synthesize insights from well-established feminist critiques of economic theory and contribute them to an important public discourse. The analysis considered the assumptions and limitations of mainstream analysis of wage differences between men and women. This included the extent to which such analysis considers the possibility of discrimination and unobserved variables, but excludes the possibility of systematic under valuation of specific types of work.  The analysis also considered the way in which the institutions and social norms inform wages and employment conditions in various sectors of the labor market. In total, the academic analyses were a small part of the total evidence brought before the tribunal. Despite this, the opportunity to carefully explain standard economic modelling and assumptions to a literate, informed audience of non-economists provided an important lesson in the potential power of contributing insights from feminist economic critiques to key policy and decision-making forums.

In its decision, the tribunal concluded: “for employees in the SACS industry there is not equal remuneration for men and women workers for work of equal or comparable value by comparison with workers in state and local government employment. We consider gender has been important in creating the gap between pay in the SACS industry and pay in comparable state and local government employment.” As a result of this finding, wage increases of 19 to 41 percent  (depending on job level) are being implemented progressively through wage adjustments between 2012 and 2020.

Further information is available by clicking here.

 

* Fair Work Australia is now known as the Fair Work Commission.

Edited November 12, 2013 to fix link in last sentence.

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8 comments
  1. Linley Lord says: November 8, 20135:55 am

    It is great to see this blog being established. It will be of great use to those of us who are undertaking gender based research – particularly for those of us who aren’t economists! Keep up the great work.

  2. Gunseli Berik says: November 9, 201310:41 pm

    Such instances of success—where feminist economics serves to promote goals of gender justice—are to be celebrated. Kudos to Austen, Jefferson, and Preston! All the more so, as they were probably up against mainstream economists in the tribunal’s deliberations who were making the business case against the wage raises. This piece raises many other questions too: Over a decade or more ago Australia was touted as a case where the centralized wage setting process facilitated implementation of comparable worth. Whatever has come of comparable worth in Australia? (Maybe the subject of another blog post!) It would be good to know whether the case of the social and community sector workers is a continuation of comparable worth in AU or the case that has it jumpstarted it. It would be also useful to find out the tribunal’s status, how it functions. Is the tribunal’s implementation plan under danger of being suspended with the recent political shifts in Australia (Julia Gillard’s ouster and Kevin Rudd’s defeat), as with, for example, the carbon tax?

  3. Angela Barns says: November 12, 20131:38 am

    Congratulations to Therese Jefferson, Alison Preston and Siobhan Austen on their important contribution. As a social worker engaged with women’s experience of social policy I’d like to suggest that the significance of feminist economics is its capacity to blur the boundaries between disciplines, to be trans or inter-disciplinary. Feminist economics understands women’s work within its broader context. In the case of low paid care work, feminist economists engage with Australia’s wage structures, constructions of gender and the cultural narratives about the work undertaken with vulnerable and marginalised people. In doing this, feminist economics provides a more useful and more relevant understanding of women’s socio-economic realities.

  4. Gillian Hewitson says: November 26, 20138:35 am

    Were there any economists arguing either for or against the case for comparable worth? Will this decision make it easier for other cases such as that of the nurses?

  5. Gillian Hewitson says: November 26, 20138:59 pm

    May I amend my previous comment to “orthodox economists” …. I think of myself as a heterodox economist, yet I am in the habit of referring to neoclassical economists as “economists”.

  6. Therese Jefferson says: November 27, 20131:18 am

    The orthodox approach to economic analysis was largely represented by Professor Deborah Cobb-Clark from Melbourne University and some of her colleagues/co-authors. The Australian Industry Group (a peak employer association) submitted some papers co-authored by Professor Cobb-Clark as part of their witness statement and she also appeared as an expert witness before the tribunal. Our points of difference with Professor Cobb-Clark are relatively detailed but might be reduced to two main areas of argument. Firstly we rejected that there is one economic approach to the issue of ‘value’ in economics and thus a range of possible methods for exploring gender and pay. Secondly we argued that the traditional decomposition analysis undertaken in the orthodox studies were unable to adequately take into account historical and institutional factors that are likely to have played a large role in the low pay rates associated with work performed by Social and Community Sector workers. The embedded assumptions of rational, autonomous decisions means that there are important limitations on the interpretations that can be attached to these findings. For researchers, I think an important outcome from the hearing was the value of having a range of different methods and findings discussed in an important policy forum.

  7. Hande Togrul says: November 27, 20135:24 am

    Many congrats to Australian sisters and brothers! this is amazing work! It shows how we can fight depth of sexism. One can explore explicit and implicit biases to further understand and prove systematic undervaluation. I believe gender wage discrimination court cases use such bias arguments.

    I consider myself a community care worker in North America since I work at non-profit sector doing anti-oppression work. I can clearly testify how sexism runs in institutional and interpersonal level that cannot be captured in economic analysis. Not only sexist men but also women who deeply internalized sexism. When biases are so deep rooted, making the case of comparable worth becomes almost impossible. Yet, I believe in the process of building feminist knowledge and experiences. In this case, feminist sisters and brothers acted on it! Gives me strength. I will certainly use your example in my work. Thank you again!

  8. Irene van Staveren says: December 2, 201310:06 pm

    This is precisely the kind of impacts that IAFFE wants to celebrate. We need such information to develop our fact sheets. Wonderful example!

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