Weekly economic briefing: Gender workforce participation

The Weekly Economic Briefing is written by two senior Deloitte Economists, David Rumbens from Deloitte Access Economics in Australia and Ian Stewart Deloitte’s Chief Economist in the UK. They provide a personal view on topical financial and economic issues. Subscribe to receive the Weekly Economic Briefing in your inbox!

In this week’s blog:

Australian economic briefing
UK economic briefing
International economic briefing

Australian economic briefing by David Rumbens

This section of the briefing provides a snapshot of key economic data and issues of relevance to Australia.

Gender workforce participation

The Australian Bureau of Statistics’ recently released Gender Indicators publication shines a spotlight on gender equality in Australia. From economic security to safety and justice, the release highlights some of the gender imbalances still present in our society. With that backdrop, this edition of the Weekly Economic Briefing focuses on women’s participation in the workforce – from the progress that’s been made to the work that still needs to be done.

Over the last decade, Australia has seen female participation in the workforce increase, from 57.8% in 2006-07 to 59.2% in 2016-17[1]. And over the same period, male participation has fallen by a similar magnitude, from 72.4% in 2006-07 to 70.4% in 2016-17. Encouragingly, this puts Australia in the top 20 countries for female labour force participation. However, we are still a step below our friends across the Tasman (New Zealand with female participation at 64.5%), and a leap less than world leaders, Iceland, at 79.7%.

But looking only at overall participation rates masks an important divide in the type of work being done between women and men.

As a share of total employment, male full-time work has fallen in recent decades (see chart 1). But this fall hasn’t been matched with meaningful growth in female full-time employment.

Chart 1: Share of Australian employment, by gender and full-time/part-time

Source: ABS 6202.0 Labour Force

Overwhelmingly, the employment gains made over time have been in part-time work. But the gains in part-time employment haven’t been equal across genders: female part-time employment has outpaced that of men. In fact, this growth over recent decades means that almost as many women now work in part-time roles (21.7% of those employed) as in full-time positions (24.9% of those employed), while male part-time employment still sits below 10% of those employed.

So what’s driving the discrepancy in employment outcomes in recent times?

Well, it’s partly that traditionally full-time, male-dominated employing industries such as manufacturing (with a 74.3% male workforce in 2006-07) and agriculture (a 68.3% male workforce in 2006-07) have seen notable employment losses in recent decades. And much of the employment gains have been in industries with larger part-time workforces.

Many of the sectors that have experienced stronger growth have also traditionally had larger female workforces. Chart 2 displays the average annual growth in each sector over the last decade (left-hand side), and the current share of female employment (right-hand side). Industries with higher female shares, such as health care, education and accommodation, have been amongst the strongest growing in the economy over the last decade.

Chart 2: Employment by industry – growth over last decade and female workforce share at 2016-17

 

Source: ABS 6291.0.55.003 Labour Force, detailed and ABS 4125.0 Gender Indicators

This industry dimension is important when it comes to understanding future labour market growth, which continues to be faster in areas with higher female participation. However, there are also remuneration differences by industry. Of all industries, workers in accommodation and retail are the lowest paid (as measured by average weekly earnings), while health care also sits in the bottom half.

The longer term trend to a rising share of employment being part-time embodies, to some extent, flexibility and worker preference. But part-time work is a concern when it stems from the absence of opportunity for people to work more.

And this is certainly true for many women. Of those employed, 11.2% of women are underemployed, compared to a 7.2% underemployment rate for men.

[1] Participation rate defined as proportion of individuals aged 15 years and over in the labour force.

For more information on the Australian brief, please contact the co-authors, David Rumbens and Harry Murphy Cruise.

 

UK economic briefing by Ian Stewart

A personal view from Ian Stewart, Deloitte’s Chief Economist in the UK. Subscribe to and view previous Monday Briefings at: http://blogs.deloitte.co.uk/mondaybriefing/

  • The latest Deloitte survey of UK Chief Financial Officers, released this morning, shows a rebound in optimism after the sharp decline in the wake of June’s General Election. Perceptions of uncertainty have declined and are running at almost half the levels prevailing after last year’s EU referendum.
  • Concerns over Brexit have eased, with 60% of CFOs expecting the UK’s exit from the EU to lead to affect the business environment adversely, down from 72% in June. Nonetheless, Brexit tops the CFO risk list and almost a third of CFOs expect it to reduce their investment in the next three years.
  • CFOs rate weak UK demand the second greatest risk, with prospects for higher interest rates in third place. In the light of recent hawkish comments from the Bank of England Governor, Mark Carney, CFOs have brought forward expectations for a UK rate rise and 92% expect base rates to be higher than their current 0.25% level in a year’s time.
  • UK inflation has surged in the last 2 years, from close to zero to approaching 3.0%. Surging inflation has put pressure on profit margins with CFOs report that cost pressures are running at the highest level in more than six years. While optimism and expectations for revenues have recovered from last year’s lows, profit expectations continue to languish.
  • UK businesses are rather more upbeat today than three months ago and see fewer risks in the world. Nonetheless, perceptions of uncertainty are elevated and Brexit remains a major worry. With margins under pressure CFOs are operating cautiously. It is a testament to the changeable business environment that eight years into the recovery cost control is the top balance sheet priority for major UK corporates.
  • To read the full report and download the survey data please click here.

OUR REVIEW OF LAST WEEK’S NEWS

The FTSE 100 ended the week up 0.2%, at 7,535 close to an all-time high.

The International Monetary Fund upgraded its global economic growth outlook while Asian stock markets saw strong gains, led by a 21-year high for the Nikkei.

 

International economic briefing by Ian Stewart

Economics and business

  • The IMF said the UK is a “notable exception” to an improving global growth outlook
  • Separately, the IMF estimate that European banks still have €988bn in non-performing loans on their balance sheets
  • Former IMF Chief Economist, Oliver Blanchard, questioned whether central banks have the necessary monetary tools to deal with a recession
  • Departing German finance minister, Wolfgang Schäuble, warned that the level of global debt presents a big risk to the global economy
  • US consumer confidence rose to a 13-year high
  • UK lenders reported the biggest fall in the availability of unsecured loans since 2009
  • UK manufacturing experienced its strongest quarter since the start of 2015 according to a British Chamber of Commerce survey
  • Separately, the BCC said it seems “extraordinary” that the Bank of England would consider raising interest rates against a backdrop of weak growth
  • Ireland’s NAMA bank, set up to take toxic debt at the height of the financial crisis, will make its last repayment of government guaranteed senior debt this month, three years ahead of schedule
  • The UK’s higher minimum wage has led to the biggest drop in the number of low-paid staff since the 1980s, according to the Resolution Foundation
  • Australia’s central bank warned that higher interest rates could leave Australian consumers struggle to service their debts
  • The Nobel Prize for economics was awarded to Richard Thaler for his work on behavioural economics

Brexit and European politics

  • Exit polls suggest that the Austrian conservative People’s Party, the ÖVP, are likely to win the largest share of the vote in Austria’s election. The anti-immigration Freedom Party had its best result in 20 years and it may form a governing coalition with the People’s Party.
  • The EU’s chief Brexit negotiator, Michel Barnier, said Brexit talks had reached a “deadlock”
  • UK Chancellor Phillip Hammond claimed that Brexit has left the UK economy under a “cloud of uncertainty”
  • London’s leading position in Fintech will ensure the Capital remains a global financial hub, according to a report from economist Gerard Lyons
  • Tax officials in Ireland have questioned the viability of a “virtual” Irish border after Brexit
  • The EU’s nuclear trade body is keen on a swift deal with the UK after Brexit
  • A hard Brexit with no trade deal could cost the UK economy £400bn by 2030, according to a report by Rabobank
  • German economics minister, Brigitte Zypries, said that Europe will be the big winner from Brexit
  • The UK technology sector employs more foreign workers from outside of the EU than from within it, according to research by Tech City UK and Nesta
  • The City of London have announced plans for a new court to handle fraud and cyber-crime, in an effort to uphold its reputation as an international legal centre post-Brexit

And finally…

  • A Dutch start-up wants to train urban crows to pick up discarded cigarette ends. The entrepreneurs aim to incentivise the crows by adapting a vending machine concept that currently rewards the birds with food for dropping in loose change – Tobaccrow

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