Another small win against the gender pay gap

With the passing of the Equal Pay Amendment Bill on 23 July 2020 New Zealanders working in female-dense professions will have a clearer pathway for pay equity.

It is another step towards addressing systemic sex-based pay undervaluation in female-dense occupations. Today’s “going market rate” for employing people in traditionally female-dense occupations may not be a fair or equal rate, but rather a suppressed wage born out of historical pay discrimination.

Employers already have a duty not to pay people differently on the basis of sex (Equal Pay Act 1972). This new Bill helps parties to come to an agreement (aligning with the bargaining process in the Employment Relations Act 2000) about what equitable remuneration would be and makes court action a last resort rather than a first step.

This is absolutely worth celebrating; and putting into context. Unfortunately, the 2017 Motu report What Drives the Gender Wage Pay Gap?” concluded that “only 12% of the gender wage gap is due to the particular industries and firms where women choose (?*) to work”.

The Motu report used a decade of annual wage and productivity data for the whole of New Zealand to examine the extent to which the gender wage gap can be explained by women working in low-paying industries or firms, gender differences in productivity, and various types of discrimination.

This study was different to most previous wage gap studies in that it tested whether men and women are paid different wages for adding the same amount of value to their employer. They also looked at productivity data to estimate the relative contributions to firm output.

They concluded that women are paid 16% less than men in the same industry for making the same value of contribution to their firm. A woman in a private for-profit firm who makes the same value of contribution to her firm as a man in the same industry is paid 84 cents for every $1 the man is paid. Their research suggests sexism is likely to be a major driver of the gender wage gap. And the gender wage gap increases with age and the length of time spent in the same job.

So, the Equal Pay Amendment Bill is helping address the systemic, historical, undervaluing of that work that predominantly women do. And the work it is undervalued simply because women do it. This legislation wouldn’t have to exist if this wasn’t true and the case wasn’t clear and established.

Fixing the system is not easy or always possible but at least there is the acknowledgement with this legislation that the system is unfair. AND there is much more work to do – to tackle the other 80-84% reasons for the pay gap.


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