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FactCheck Q&A: do women under 50 make up just 2% of people on $100,000 a year?

“The biggest beneficiaries [of the Coalition’s Paid Parental Leave scheme] are the women of Australia. Of all the people earning A$100,000 a year under the age of 50, 2% are women. Just 2% are women. How…

Treasurer Chris Bowen and Shadow Treasurer Joe Hockey faced off in an economic debate.

“The biggest beneficiaries [of the Coalition’s Paid Parental Leave scheme] are the women of Australia. Of all the people earning A$100,000 a year under the age of 50, 2% are women. Just 2% are women. How is that fair in a modern society?” - Shadow Treasurer Joe Hockey, ABC Q&A, August 19. (Watch the segment on Paid Parental Leave here.)

The Coalition is planning to introduce a Paid Parental Leave Scheme (PPL) if elected, which would see all women paid their current wage plus superannuation for six months, up to a limit of A$75,000. The stated rationale for the policy is to benefit women and families, to benefit the economy through higher participation of women in paid work, and to benefit the baby.

Talking about the Coalition’s proposal on Q&A’s economic debate, the shadow treasurer drew attention to the under-representation of women in the highest income brackets. But is the quoted statistic of 2% correct?

Is the statistic correct?

The Conversation’s Election FactCheck team contacted Hockey’s office to ask for a source for the claim that “of all the people earning A$100,000 a year under the age of 50, 2% are women”.

His spokesman replied: “You will find the information from the Australian Tax Office (ATO) taxation statistics - and it was sourced from the most recent published figures.”

The relevant details of lodged returns for the tax year 2010-2011 can be found in Table 14 of that report, which can be downloaded here. Of 1.035 million people who lodged a return with an income of A$101,350 or more a year, there were 235,775 or 24.5% females.

However, this table does not allow us to focus on the under 50 age group that Hockey mentioned.

So I interrogated the Australian Bureau of Statistics Census 2011 Database and classified the men and women alive at that time into five-year age groups and 10 income groups. The highest category is A$2000+ per week, or people earning $104,000+ a year, not identical to the A$100,000 quoted by Hockey, but close.

Of the 11.848 million people under 50 years of age, we find that 848,865 earned A$104,000 or more a year, of whom 201,805 or 23.8% were female.

So it appears that the figure of 2% quoted by Hockey was incorrect, by a factor of 10.

Why context is crucial

Could Hockey have been referring to a particular type of person, say full-time workers or part-time workers?

For full-time workers only, of those earning A$104,000 or more a year, 20.5% are women.

For part-time workers, the figure is 54.1%. So among part-time workers, females actually dominate males in the highest income category.

Why is it so large? Because almost 70% of part-time workers are women. Of course, females will dominate all income categories if you focus on part-time workers. For the same reason, females are over-represented amongst the highly paid for people aged in their nineties - because women live longer.

This same issue contaminates the 23.8% figure that I calculated above: it is partly small because women are under-represented among full-time workers, making up only 36.1% of the total. This is a separate issue to any differences in income that exist for those in full-time paid employment.

A fair answer to a fair question

If one is concerned about fairness, which was mentioned explicitly in Hockey’s quote, then it make more sense to look at each gender and ask what proportion are in the highest income groups.

Using the same ABS database, we find that 5.0% of people earn over A$2000 a week or more. However, for males the figure is 7.8% and for females it is 2.3%.

This 2.3% may have been the figure that Hockey was referring to.

Hockey then provided commentary that the 2.3% figure demonstrated an unfair outcome for women. But by itself, the 2.3% figure tells us only that high incomes are rare. It is only when we compare it to the 5.0% average for both sexes or the 7.8% figure for men that it can be put in context.

Damned lies and statistics

Beware of statistics that focus on narrow sub-groups. Restricting attention to sub-groups can change results drastically, if that subgroup is very different to the whole.

For instance, if we restrict our attention to vocations that are male-dominated, such as the building industry, we would expect to find fewer highly-paid females.

Secondly, if you want to exaggerate the difference between two groups, then compare the proportions in the extremes. For example, of people over 6 feet in height, most are male. Of those over 7 feet in height, almost all are male.

In the case of income inequality, looking at those who earn more than A$2000 per week is done for a legitimate reason. Moreover, it happens that the comparison does not become more extreme at higher income levels. Among those earning more than A$4000 per week, the proportion of females is again around 24%.

The right set of numbers

Hockey may have meant to say that around 2% of women earn more than A$100,000 - which would have been correct. This kind of mistake is easy to make, especially under the stress of a televised debate.

However, this figure by itself is still irrelevant to gender disparities until it is compared with the equivalent figure (7.8%) for males. His commentary that the 2% figure demonstrates unfairness was misguided.

If Hockey wanted to argue that the Coalition’s paid parental leave scheme will help women to remain in work, benefiting both women and the economy, then it would have been better for him to quote the proportion of women in full-time and part-time work, and then explain how the scheme would increase these figures.

If he wanted to argue that women are unfairly paid, then he should have quoted the 2.3% and 7.8% figures together, and explained how a more generous paid parental leave scheme might lead to less women leaving the workforce and progressing to jobs with higher wages.

Verdict

Joe Hockey’s claim that of all the people earning A$100,000 a year under the age of 50, 2% are women is false. The correct figure is around 24%.

The Conversation is fact checking statements made in the lead-up to this year’s federal election. Normally, these are reviewed. But each week, we will also check significant factual assertions on the ABC’s Q&A program. To allow us to publish these checks as soon as possible, there will be no review process.

Request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.

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30 Comments sorted by

Comments on this article are now closed.

  1. David Rennie

    IT Consultant

    I hope Joe's job in an LNP government has nothing to do with getting the number right!!!

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  2. James Hill

    Industrial Designer

    Well it is Tony's thought bubble after all.
    Why Joe shouldn't understand is itself very understandable.
    In fact does anybody but Tony understand it?
    Tony may be confusing in his old age, his ambitions to be either Pope or PM.
    And expecting that everyone will just take his pronouncements on faith, and defend them on the same illogical basis.
    The Coalition internet policies seem to have the same illogical taint.

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    1. Chris Saunders

      retired

      In reply to James Hill

      It seems to me Tony's LNP want women to stay at home so they can breast feed. I mean the LNP members would never have been at home when the children were young to know about bottles and dummies and solid foods. So with six months off, women can fulfill the UN health commission’s ideal of six months breastfeeding and still have their golden super. The biblical symbolism of Christ being born in a stable having the meaning that he was cow milk fed seems to have passed Tony by.

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    2. James Hill

      Industrial Designer

      In reply to Chris Saunders

      Chris, something to do with that milk of human kindness?
      I am sure that reasonable adults could tolerate their female co-workers taking time out for some breast feeding, heaven knows they are all out there taking cigarette breaks for as long as it takes to breast feed a child.
      Then back to the in-house crèche with the sleeping child.
      Then the mothers in question get to keep 100% of their wages because they are still earning them.
      Abbott's thought bubble, like the silly opposition to the NBN…

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    3. Chris Saunders

      retired

      In reply to James Hill

      I like your idea about the crèche James, because it seems to me women have children because they want them in the main and wanting them usually means looking after them frequently on a daily basis; sharing their lives, their rapid growth and momentary ups and downs. It’s a shame not to be able to make the most of these early years, but instead settle for part time kids and the anxiety and feeling of loss this creates in the mother, if not the child. But crèche James, sounds a bit like what they…

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    4. James Hill

      Industrial Designer

      In reply to Chris Saunders

      Chris, that in house child minding centre IHCMC? ( crèche is easier) was mentioned by some mothers on a recent TV program as their preferred option.
      On that childhood experience, the child is father to the man, a local paper published a letter from me suggesting the same source, of a problem being experienced by the Vice Chancellor of the local university with the same early education experience as Paul Keating.
      Luckily for me on the very same day a national newspaper weekend supplement contained…

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    5. Ian Rudd

      Retired accountant

      In reply to James Hill

      It's welfare for the middle class among other things.

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  3. Brendan Cusack

    Industrial Relations Advisor

    Joe Hockey and others are missing the irony in a paid parental leave scheme that focuses on mothers, as the Liberal Party scheme does. In this country we have a significant gender pay gap, whereby women are on average paid substantially less than men for doing the same. This country legislated for equal pay many years ago, so it is not the salaries themselves that are the problem.

    A major part of the problem is that it is mostly women who take the career break in order to raise children. These…

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    1. Chris Saunders

      retired

      In reply to Brendan Cusack

      It possibly gets down to what you define as parental leave. If you are talking about adoptions then either parent taking the leave or sharing it might prove equally viable. If you are thinking of natural children then there is the consideration that the mother has given birth and has a degree of physical repair to make. She may, in fact, also be able to breast feed. I myself have always seen a large distinction between the two scenarios. In the second scenario the possibility of sharing the parental leave is lessened and removing hurdles for fathers (whatever you imagine these to be) to participate somewhat more difficult. Designing parental leave schemes not for mothers initially means you are defining parental leave in a specific way which would appear to deny the reality of the birth and baby care process. Or, is this line of thinking under the pretense that babies just pop out, or maybe are brought by the stork.

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    2. Brendan Cusack

      Industrial Relations Advisor

      In reply to Chris Saunders

      If a natural mother is able to, and chooses to, breastfeed then that would most likely affect the decision of a couple as to which parent will act as primary care giver for a newborn child. If, however, the natural mother is not breast-feeding then there is no impediment to another person, such as the father, taking on the primary care giver role. Furthermore a breast feeding mother might choose to express milk during the day which will later be fed to the child.

      The 'degree of physical repair…

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    3. Chris Saunders

      retired

      In reply to Brendan Cusack

      Hey Brendan, you have to be talking through your hat. Two weeks for the physical repair? That truly is testing on my last sentence “your last sentence in your response was unnecessary”. Two years is the traditionally tried and tested time for the mother to physically repair. And that is being quoted by one of those happily efficient mothers with minimal birth trauma. I don’t wish to go into details for it is obvious that you would be surprised at the extent of physical and mental trauma that…

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    4. Rebecca Graves

      Teacher

      In reply to Brendan Cusack

      You would need to spend a great deal of time expressing to pump that amount of milk to supply a newborn. Also, without pumping throughout the day at similar intervals to what a newborn would feed you risk diminishing your supply and getting mastitus. Also, most women start leave a bit before the baby is born. However, I agree with the basic premise around making it easier and more desirable for men to take leave instead.
      But I think a it would be more practical to be able to split the leave. When the baby is feeding a bit less it can be just as practical for the father to take leave.

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  4. Michael Glass

    Teacher

    The significance of the proportion of women of childbearing age on high salaries lies in the amount that the taxpayers will pay to support this scheme. I bet it will have a lot of unintended consequences.

    If Tony Abbott is elected, look for the following effects:

    * First, women will delay having a child, or another child until the new scheme kicks in. Expect a population dip before the new scheme comes in followed by a population bubble when the new scheme cuts in. Expect overcrowded maternity wards, followed a few years later by dislocations in schools.

    * Secondly, expect more women to delay childbearing until they get the next promotion. Expect an increase in the present tendency to delay childbearing. Expect an increase demand for assisted reproduction technologies.

    This policy is going to have a lot of unintended consequences.

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    1. Janeen Harris

      chef

      In reply to Michael Glass

      It will be a boon for couples running their own business. Hubby takes a pay cut for a year or two, give the wife a big fat payrise and when planned baby arrives she gets maximum returns.

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    2. Graeme Smith

      Citizen

      In reply to Janeen Harris

      That's the name of the game, Janeen. B A Santamaria from beyond the grave, the two Riverside old boys Barnaby and Tony reaching out with all eight hands into evil big biz and commie worker pockets to redistribute the wealth into the cottage industry and farming agrarian socialist homes of the justly deserving. Menzies himself repeatedly voted for Santamaria's DLP saying it was the party he thought he'd founded.

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  5. Christopher Nheu

    logged in via Facebook

    Glad to see we haven't got any Libs on the comments trying to stand up for Hockey this time.

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  6. Lee Emmett

    Guest House Manager

    I'm surprised that any figures were mentioned by Joe Hockey, though I'm not surprised that he got it wrong. But if the shadow Treasurer gets figures out by a factor of 10, we could be in big trouble if he has the real job of keeping the national accounts in order.

    Michael Kroger said on Lateline that the LNP strategy was to keep Labor guessing to the last week of the election campaign, then to release figures which would prove Labor wrong. Nice!

    I fail to see how the LNP can go on and on about a budget 'emergency' and keep a straight face about introducing a grossly unfair scheme which will cost $5.5 billion/year.

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    1. Chris O'Neill

      Victim of Tony Abbotts Great Big New Tax

      In reply to Lee Emmett

      "we could be in big trouble if he has the real job of keeping the national accounts in order"

      Thankfully governments have the public service to do the calculations for them. Oppositions have no such luck so their figures mean diddly squat.

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  7. Comment removed by moderator.

  8. Chris O'Neill

    Victim of Tony Abbotts Great Big New Tax

    "The Coalition is planning to introduce a Paid Parental Leave Scheme"

    paid for with a Great Big New Tax on shareholders.

    It won't matter if you have the smallest super fund ownership of shares in Australia, you will be paying nearly 1.5% EXTRA tax on earnings.

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  9. Tim Benham

    Student of Statistics

    > The biggest beneficiaries [of the Coalition’s Paid Parental Leave scheme] are the women of Australia. Of all the people earning A$100,000 a year under the age of 50, 2% are women.

    Whether it is 0.2% or 20% seems less relevant than the inverted logic. The higher your pay the more you get under the Coalition scheme, so the fewer highly paid women there are the less women collectively receive from their scheme.

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  10. Peta Lee

    Graphic Designer

    Regardless of opinion, I would like to commend The Conversation for this fact checking. That is why I read it regularly.

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  11. Peter Sommerville

    Scientist & Technologist

    Frankly I don't give a stuff whether or not Joe got it wrong. I don't agree with the policy, but I still want to see this appalling government gone.

    Frankly this fact checking exercise is an exercise in trivia. The critical facts that are determining public opinion are few, but considerably more significant.

    I'll be glad when September 7 is over.

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    1. Chris O'Neill

      Victim of Tony Abbotts Great Big New Tax

      In reply to Peter Sommerville

      5.5 billion dollars a year and counting on upper-middle class welfare is trivia.

      Sure. If you say so.

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  12. Robert Tony Brklje
    Robert Tony Brklje is a Friend of The Conversation.

    retired

    Is it all down to that now. A sole measure of worth, your salary, paid more than you a worth more as a human being and a citizen, paid less and you are similarly devalued.
    In reality the worse the job, the less desirable it is and, the less you are paid. The more you can plot, scheme and, con, the greater you salary and as measured by capitalist society the greater your human value, yet the far more likely you are to devalue all other humans except yourself.
    So is it really all down to earn as much as possible will ensuring all others earn as little as legally possible. Something seems to becoming decidedly crook about everyone having a fair go, are we all to readily following in the lie of Reaganism and Thatcherism and abandoning more social, more humane values.

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    1. geoff clark

      retired

      In reply to Robert Tony Brklje

      What we need is some sound economic analysis of the proposal which I have yet to see. Primarily, we need estimates of how much low, middle and high income women going on parental leave would receive in benefits. ABS and Census data should be able to produce the numbers of women in these income groups. Parental leave data should be available, but if not, estimates could be produced. I strongly suspect that the annual quantum of benefits would be heavily skewed to middle and high income women, given the proposed design of the scheme. On top of this, we would have a similar distribution of benefits to men, including millionaires, going on parental leave. Further, the risks of fraud are obvious.

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    2. Michael Hay

      retired

      In reply to geoff clark

      I suspect that a parliament consisting of Independents would not have dreamed up such a policy for paid Parental Leave. They would have discussed and debated the subject and would thus have avoided a 'rush of blood' to the head of any one single person.
      Now THAT would be democracy !.

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    3. Graeme Smith

      Citizen

      In reply to Michael Hay

      No rush. Plenty of time for debate and discussion. It's been core LNP policy for more than three years.

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  13. Janeen Harris

    chef

    Why can't the pollies prioritize getting people who live on the street some real help? We have kids, teenagers, mothers, and the new class of homeless, women over fifty. Lets see them put their hands in our pockets on their behalf. No, can't afford to do that, can we. That would be a waste of money. The Libs have a long history of keeping the marginalized in their box. If we can afford to give someone $75k to breed, then we can afford to care for our poor.

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