Women start “working for free” in March

And men? The gender wage gap, profits and labour exploitation

Recently, the Australian Council of Trade Unions (ACTU) and the Workplace Gender Equality Agency (WGEA) marked November 19 with separate updated reports on the gender wage gap (GWG). Both reports provide valuable information and perspectives for men and women active in the union movement and, in detail, extend to other movements and organizations.

They confirm the forthcoming 2024-5 Annual Wage Review (AWR) is a big deal for all working women and men.

Both reports, in common and different, show that the Labor government, relative to the long years of LNP governments, has contributed to the momentum of closing the GWG. History and emerging evidence suggest a Dutton LNP government would reverse at least some of the important steps that Labor has taken.

The Reports address the GWG only as women’s wages relative to men’s. This relativity is a useful marker of the efforts of union women, supported by more men as time goes by, to close the gap.

However, quite wrongly, on page 5, the ACTU report says:

The current gender pay gap can also be expressed as the number of days each year women effectively work for free. On the latest figures that is 42 days. That means that from November 19 this year, women are effectively working for free until the end of the year.

(The British Trade Union Congress makes the same mistake.)

This is nonsense and the real situation shows the marker date is much earlier in the year (or working day or week or hour).

Correcting this mistake is straightforward, requiring a focus on profits and exploitation, and does not diminish the importance of closing the gender pay gap. The result replaces “competition” between working men and women with a clear rationale for mutual solidarity while tackling systemic discrimination against working women. It questions the possibility the “wages system” can fund closing the GWG by increasing the rate of exploitation of men.

Exploitation: a better way to understand the GWG

The reason to use exploitation to define when women are “working for free” is simple.

Women do not work for wage-working men. Working men can discriminate against women, but they do not exploit them as wage earners. Their employers do. Women experience both discrimination and exploitation when working for the industrial wage, as do some men.

Employers pay workers’ wages. Employers take on working women (and men) to get enough work out of them the full value of which is more than the wage they pay, commonly known as profits. (How that works in the public service is a separate matter for now.)

Profits and wages are the most important, key relativity because therein lies the real secret of “working for free”, and the moment in each working hour or week or month or year when men and women “are working for free”. 

It is the profits system that creates “unpaid work”, because both men and women give part of their worktime for free.

The real gender wage gaps based on labour exploitation

Our starting point is the general rate of exploitation, profits generated by workers relative to the industrial wage paid to them.

Using the Australian Bureau of Statistics (ABS) data, we can produce a good estimate of the general rate of exploitation, quarterly and/or yearly. We have covered this before. Here are the ABS’ current estimates, using the recent annual data.

ABS 5204.06 (extract) - original	Total employee Compensation ($millions)	Total Profits - Corporations ($ millions)	Rate of exploitation (derived)
Jun-2019	919356	483048	53%
Jun-2020	956942	519999	54%
Jun-2021	996768	571313	57%
Jun-2022	1069429	664267	62%
Jun-2023	1177339	737774	63%

In 2023 the general rate of exploitation was 63% and in 2021 it was 57%. (2021 is relevant for reasons explained below.)

From here we can estimate a gendered rate of exploitation, that is the rate for men and, separately, for women or, that part of the working hour or day or year when working women and men really are “working for free”.

The gender rates of exploitation: average wages

Applying that general rate – 63% - to the average hourly wages provided by the ABS - $36.82, shows the total value at $60.01, providing “profit” at $23.20.

From there we estimate the gendered rates of exploitation, shown in this table.

		Hourly rate (38-hour week) - 7.6 hr day	Rate of exploitation: combined and gender	Total Value / hour	Profit (Surplus after wages paid)	"Working for free time" starts
ABS 6302.02	Dollars		Dollars
May-23
All males	1640.9	43.18	54%			46%
All females	1169.4	30.77	75%			25%
All persons	1399.1	36.82	63%	60.01	23.20	37%

Men start “working for free” at about 3.5 hours (by day) or mid-June (annual).

And women start “working for free” about 2 hours into their paid working day, annually at about the end of March. (By coincidence, near International Women’s Day, and the deadline for first submissions in the Annual Wage Review).

Understanding how exploitation works is essential for any union or environmental activist because it is the basis for an effective strategy in workers' interests and that of Nature, extending to public ownership, and the connection between goods production and services production.

What about unpaid domestic labour?

We gain an even stronger estimate of the exploitation rate for both men and women by including unpaid work in the home that is necessary for capitalism to work.

The ACTU’s Report draws on the most recent data 2020-1 :

“The second major barrier women face is the disproportionate amount of unpaid care and domestic work they do compared to men, which reduces their workforce participation and career progression through breaks in work, working reduced hours, or performing roles below their capabilities to better enable the juggle between work and life. Women spend 30.2 hours per week on unpaid care and housework, compared to men who spend 21.8 hours per week.”

Why is unpaid work in the home a part of the exploitation story?

Further to the ACTU point, there are 2 more reasons.

First, the trend rise in the general rate of exploitation over the past 10 years intensifies pressure on household living standards and requires in families both parents to be in paid work, preferably with one in a “full-time job”.

The second reason is perhaps more challenging. The purpose of the industrial wage (and the PAYE tax taken from it) is to pay enough for worker(s) to live so they can come back and do the work again the next day (week). Thus, the industrial wage pays for the reproduction of their working capacity as well, a necessary payment for the continuity of profit-making.

The reproduction process also includes making babies, to be raised as the next generation of wage slaves that profit-making requires. (There is a lot more to reproduction, like childcare and other education, health care and skills formation but, for now, that is a separate discussion.)

Understanding the critical importance of unpaid domestic labour in relation to paid working hours provides a more complete estimate of exploitation, and its gendered character, as relevant today as it has ever been.

We can get a good estimate of the “complete” rate of exploitation by adding data on unpaid working hours to the industrial wage rates of exploitation (and the associated relativity of paid to unpaid hours in paid working time). The ABS data from 2020-1 enables this. That data is produced infrequently and enables a snapshot only.

Doing so could help to clarify policy and strategy for union, environmental and social welfare activists.

Most importantly it shifts messaging from men being perceived as the problem to the real source, the employers and the profit system that dominates our lives.

Implications for policy and strategy

The ACTU Report identifies a significant range of policy issues but relatively less on strategy. They include the AWR, workers’ bargaining rights and women’s participation in the workforce, interacting with childcare and preventing sexual harassment and domestic violence.

All these bear upon the downward pressure on living standards experienced particularly by low and middle-income women.

The AWR is extra important because, for better or worse, its outcome lays a foundation for other elements of living standards. However, right now the Reserve Bank is set on replacing the AWR as the controller of wage outcomes and living standards by raising unemployment to reduce wages and get inflation down.

Workers generally are angry that governments are not doing more about living standards. On average, only about 12% are finding their unionism as their source of collective power, even though union density for women is stronger.

Strategy in the immediate sense will be preoccupied with keeping Dutton’s LNP out of government, to defend the all too modest gains identified in Minding the Gap. A Dutton LNP government will constrict bargaining power for all workers and that means closing the gender pay gap will stall again. But is that good enough?

Can union and social welfare strategy, not just policy, develop a stronger level of influence by workers for a better deal out of the AWR, from the Commonwealth Budget and the 2025 election campaign?