Time to Close the Gender Pay Gap

Article for New Zealand Herald by Darien Fenton, NZCTU vice-president, published on April 24, 2003.

Last year the Ministry of Women's Affairs launched a discussion paper Next Steps Towards Pay Equity.

That document provided an unequivocal assessment that the gender pay gap still persists in this country. It also outlined the much larger pay gaps faced by Maori and Pacific women.

Unfortunately there are those who still reiterate outdated trickle-down theories that the unregulated labour market does not discriminate. The NZ Business Roundtable recently quoted smaller gender pay gaps for young workers as "evidence" pay inequities are disappearing.

That analysis fails to acknowledge that the gender pay gap has always been smaller for younger workers, as both men and women in that age bracket are concentrated in low-paid work.

For most people, what matters is having enough money each week to pay for rent, food and other basic expenses. In June 2001 women's weekly average earnings were only 60% of men's. This gender pay gap is larger than it was 10 years ago. This statistic highlights the fact that women are more likely than men to be in part-time employment, and many of these jobs have low hourly pay rates. For this reason, increasing the minimum wage will always be a key pay equity strategy.

It is useful that government agencies are attempting to determine the factors underpinning the gender earnings gap. However, knowing why women are paid less than men does not imply that this is either equitable or efficient.

The Department of Labour found that 20-40% of the gender pay gap related to differences in the jobs men and women did. Such occupational and industry differences by sex (or ethnicity) are key to the low pay problem. In other words, pay equity includes addressing the undervaluing of jobs performed by women, Maori and Pacific people.

It is no coincidence that caring work traditionally performed unpaid within the home or whanau is undervalued. There are huge recruitment and retention issues for many such female-intensive professions including nurses, teachers, social workers and caregivers. If we want high quality health and education services, we need to value the workers providing those services.

One part of the gender earnings gap can be attributed to the differences in men's and women's formal educational qualifications. However, recent research from both the NZ Vice Chancellors' Committee and Treasury highlights that pay inequities persist despite women's increased participation in tertiary education.

Pay equity is about the human right to fair pay. It acknowledges the different but comparable worth of jobs. The anti-worker policies of the 1990s denied many workers the right to something as fundamental as fair pay.

It is an indictment that New Zealand fails to meet international commitments to equal pay for work of equal value - despite ratifying the International Labour Organisation (ILO) Convention 100 and the Convention on the Elimination of all forms of Discrimination Against Women (CEDAW) in the mid-1980s.

A soon to be released ILO Global Report on Discrimination has analysed the negative impacts of decentralised bargaining on equality and pay equity. Greater support for collective bargaining is essential to ensure the recognition of workers' rights to equality.

New Zealand cannot afford to ignore the issue of pay equity - on equity, efficiency or productivity grounds. Maori, Pacific and women workers are the workforce of the future. Their incentives to upskill are undermined by job insecurity and the link between lower wages and longer student loan repayment times. Reducing casualisation, and providing more equitable access to affordable, lifelong learning are therefore pay equity strategies.

The CTU's pay equity submission to the Ministry of Women's Affairs emphasises that there is not one solution. We need a shared commitment to close gender and ethnicity pay gaps.

In Britain, through the Equal Pay Task Force, unions and employer groups are resourced to ensure that pay and remuneration systems are not discriminatory.

There are tripartite examples in New Zealand such as the current development of a qualification for aged care workers, which will result in higher wages for these workers. Government can play a leading role as an equal value equal pay employer.

The CTU endorses the Ministry of Women's Affairs' assessment that "it is time to go beyond monitoring the gender pay gap, or debating the accuracy of different disparity measures. Gender and ethnicity pay gaps are created at the level of jobs, not statistics".

A high trust, high skilled, high value NZ economy must be built on the recognising, rewarding and valuing the contribution of all its workers.