The gender pay gap means another year of women working for free

OPINION: It’s that time of year again when, if you’re a woman, you’re required to work for free for the remainder of the year.

To mark this occasion, which fell on November 15 this year, we all wring our hands and post on social media while business leaders reiterate their commitment to equal pay. Meanwhile, the gender pay gap stubbornly remains unchanged and, when the week is over, we go back to our lives ready to do the same thing again next year.

With good legislation, pay gaps can be all but eliminated; we’ve known this for some time. But a feature of the hand-wringing ritual and the rhetoric of “committed” business leaders and others is the argument that legislation would be too heavy-handed, too expensive, impractical or impossible to implement. All of which we know to be untrue.

The gender pay gap means that, as of November 15, women will be essentially working for free for the rest of the year while their male colleagues continue to be paid.
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The gender pay gap means that, as of November 15, women will be essentially working for free for the rest of the year while their male colleagues continue to be paid.

Good legislation has been in place for several years in countries such as Australia, Iceland, Sweden and Denmark, and it works. Yet, year after year we allow progress to be stalled or stopped by excuses. This works to maintain the status quo, and leaves us as far from our goal of equal pay as the year before.

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November 15 is just an average across all women, of course; if you are a Māori or Pacific woman, you’ve been working for free since September. The same goes for women in their 40s with a tertiary qualification. If you’re a woman chief executive, you’ve been working for free since July while your male peers continue to be paid (if you include bonuses and perks). Ironic, given research has repeatedly shown companies headed by women do measurably better than those headed by men.

RNZ
Westpac NZ has focused strongly on gender equality, but still has a significant gender pay gap, RNZ's podcast The Detail reports. (First published in October 2019)

I have had conversations with friends who proudly announce they are not being paid less than their colleagues, and have always been paid fairly for what they do. This may be the case, but evidence shows it would be the exception.

In the course of my career I have worked with many organisations on their pay gaps, and I have not yet come across one that, upon crunching the numbers, found it to have no significant gap. Mostly, the gaps could only be described as huge.

Westpac, for example, publicly announced its 30 per cent gap in 2019, and this figure is not rare. I have come across organisations with a 45 per cent gap. I’d be very grateful for a 45 per cent pay increase – that would make a huge difference in my life, as it would most women’s.

Westpac announced a 30 per cent gender pay gap in 2019.
Chris McKeen/Stuff
Westpac announced a 30 per cent gender pay gap in 2019.

Yet, year after year we continue to pay women and minorities less. We delay progress by listening to those arguing against what we know works: legislation. Legislation has been shown to significantly reduce pay gaps, and to work better than any other remedy. Legislation requiring mandatory reporting alone, for example, reduces pay gaps by 20 per cent.

This year, though, feels different. This year I have a sense of hope, a measure of optimism for the possibility of progress. The reason: a confluence of activity around this issue. Karanina Sumeo, the equal employment opportunities commissioner for the Human Rights Commission, is loudly advocating for pay transparency as a first step toward pay equity. Kia Toipoto, the public service pay gap action plan, is a positive step in the right direction although, to be truly effective, evidence suggests legislation will be required, which it currently lacks. And the new Mind the Gap Campaign, headed by the YWCA.

Unlike groups in the past, who have ignored the evidence and relied on convincing, cajoling and flattering business leaders into voluntarily reporting pay gaps, Mind the Gap is working to have the Government commit to legislation that mandates the reporting of pay gaps by gender, and for Māori and other ethnicities.

Mind the Gap is an alliance of voices telling the stories of the structural racial and gendered discrimination in our workplaces and calling for change. I am optimistic that, this time next year, we won’t be re-enacting the pearl-clutching of past years, but celebrating progress.

Dr Kaisa Wilson: “Legislation has been shown to significantly reduce pay gaps, and to work better than any other remedy.”
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Dr Kaisa Wilson: “Legislation has been shown to significantly reduce pay gaps, and to work better than any other remedy.”

Putting in place legislation such as that proposed by Mind the Gap would align us with countries we generally consider our peers. Australia legislated for gender pay gap reporting in 2012, and established the Workplace Gender Equality Agency to oversee the system, while parts of Europe and the UK have similar mechanisms in place.

Legislative change has become necessary because the workplaces we inherited from our parents and grandparents generally advantage white middle-class men, and disadvantage everyone else. This is achieved and maintained through discriminatory practices and structural biases, leading to deep inequality and, in some cases, generational poverty.

Only 20 per cent of the difference in earnings between men and women can be attributed to factors such as job “choice” or education level, which means the remainder is explained only by various forms of bias. For Māori, this figure is 70 per cent, and for Pacific peoples 45 per cent. Pay gaps, therefore, exist because of discrimination – and they remain in place because of discrimination.

Paying unequal is a choice, given there are demonstrated ways to eliminate pay inequality. I am hoping this is the last year I have to write this kind of article, and post protests on social media. Finally, the promise of change is in the air, and I’m optimistic the 2020s are the last decade in which pay gaps will exist in New Zealand.

Dr Kaisa Wilson is a recognised expert in workplace culture and gender, and GenderTick Advisory Board member.