Predictable howls of rage and furious accusations ensued. Critics say the government is stealing money from already-exploited women and further stoking the gender pay gap.
The workers and unions involved arguably have a right to feel duped. But the government’s mishandling should not obscure legitimate problems with the legislation. It was not working as intended. More importantly, it was constructed on problematic foundations in the first place.
The idea behind the pay equity scheme is laudable: If occupations dominated by women have been underpaid because of historical sex-based discrimination, then workers in those occupations should have recourse. The argument is that society does not value women’s work and that female-dominated work is therefore poorly paid because it is dominated by women.
The answer under the pay equity legislation is to find comparator occupations for one that is female dominated, and to benchmark accordingly. Comparator occupations may be dominated by men or already have had a pay equity claim granted. They are supposed to require similar skills, responsibilities and effort to the occupations for which claims are being made.
This may all sound sensible. Unfortunately, it is based on a faulty premise.
There is little evidence that sex-based discrimination is the cause of relatively poor pay in occupations dominated by women. Proponents of pay equity may point to the identification of better-paid comparator occupations that are male-dominated. However, under the now defunct legislation, comparator occupations were often selected from completely different industries.
The argument that occupations requiring similar skills, responsibilities and effort should be similarly paid might sound fair. But it ignores the economic forces of supply and demand based on the market for particular jobs in particular industries. It calls into question the way in which salaries and wages are negotiated in a relatively free economy such as ours.
Some of the comparator occupations that have been used are questionable: social workers were compared with air traffic controllers; librarians with transport engineers; administrative and clerical staff at Health New Zealand with mechanical engineers.
Another problem is how to decide what counts as a female-dominated occupation. Under the scrapped legislation, any occupation with at least 60% women was classified as female dominated. That allowed secondary school teachers (61% female) to become part of the largest pay equity claim ever, albeit alongside primary teachers who are more predominantly women. It’s hard to argue that one of the most heavily unionised occupations in the country has been penalised simply because it is 61% female.
A very large elephant in the room is that most pay equity claims have been for occupations funded largely from the public purse. Could it be that, if these occupations are poorly paid, it is because they are funded by the politically- and fiscally constrained state, rather than because they are female dominated?
The gender pay gap for New Zealand’s full-time workers is 4.2% – about the same as Norway and much less than Australia, Canada or the UK. That 4.2 % gap would be a lot lower if fathers took as much time out of paid work for parenting as mothers. But that comes down to choices made by individual families, not to the sexism of employers.
The pay gap increases to 8.2 % if we include part time workers, even though the pay gap for part time work actually favours women. That might seem contradictory, but it makes sense if we consider that, on an hourly basis, part time work is generally less well paid than full time work, and that a large majority of part-time workers are female.
But why is part-time work less well remunerated than fulltime work? Given that most part-time workers are women, is it down to sexism? Again, not necessarily. It may be that part-time jobs tend to be lower-skilled, or trade off flexible hours for pay.
Many factors contribute to the gender pay gap and separating them is difficult. Despite this, proponents of the defunct pay equity legislation confidently assert, without evidence, that any pay gap between men and women is attributable to sexism.
If some female-dominated occupations are underpaid because they are female-dominated, that is a travesty that should be corrected. But, to get it right, we need reasoned debate that takes into account all the pieces of what is a very difficult puzzle. Unfortunately, the debate in our parliament and media seems characterised more by outrage than evidence.
Dr Michael Johnston is a Senior Fellow at the New Zealand Initiative.
Bali Haque, is a New Zealand educator. His career has included four principalships.
This article was published HERE
The idea behind the pay equity scheme is laudable: If occupations dominated by women have been underpaid because of historical sex-based discrimination, then workers in those occupations should have recourse. The argument is that society does not value women’s work and that female-dominated work is therefore poorly paid because it is dominated by women.
The answer under the pay equity legislation is to find comparator occupations for one that is female dominated, and to benchmark accordingly. Comparator occupations may be dominated by men or already have had a pay equity claim granted. They are supposed to require similar skills, responsibilities and effort to the occupations for which claims are being made.
This may all sound sensible. Unfortunately, it is based on a faulty premise.
There is little evidence that sex-based discrimination is the cause of relatively poor pay in occupations dominated by women. Proponents of pay equity may point to the identification of better-paid comparator occupations that are male-dominated. However, under the now defunct legislation, comparator occupations were often selected from completely different industries.
The argument that occupations requiring similar skills, responsibilities and effort should be similarly paid might sound fair. But it ignores the economic forces of supply and demand based on the market for particular jobs in particular industries. It calls into question the way in which salaries and wages are negotiated in a relatively free economy such as ours.
Some of the comparator occupations that have been used are questionable: social workers were compared with air traffic controllers; librarians with transport engineers; administrative and clerical staff at Health New Zealand with mechanical engineers.
Another problem is how to decide what counts as a female-dominated occupation. Under the scrapped legislation, any occupation with at least 60% women was classified as female dominated. That allowed secondary school teachers (61% female) to become part of the largest pay equity claim ever, albeit alongside primary teachers who are more predominantly women. It’s hard to argue that one of the most heavily unionised occupations in the country has been penalised simply because it is 61% female.
A very large elephant in the room is that most pay equity claims have been for occupations funded largely from the public purse. Could it be that, if these occupations are poorly paid, it is because they are funded by the politically- and fiscally constrained state, rather than because they are female dominated?
The gender pay gap for New Zealand’s full-time workers is 4.2% – about the same as Norway and much less than Australia, Canada or the UK. That 4.2 % gap would be a lot lower if fathers took as much time out of paid work for parenting as mothers. But that comes down to choices made by individual families, not to the sexism of employers.
The pay gap increases to 8.2 % if we include part time workers, even though the pay gap for part time work actually favours women. That might seem contradictory, but it makes sense if we consider that, on an hourly basis, part time work is generally less well paid than full time work, and that a large majority of part-time workers are female.
But why is part-time work less well remunerated than fulltime work? Given that most part-time workers are women, is it down to sexism? Again, not necessarily. It may be that part-time jobs tend to be lower-skilled, or trade off flexible hours for pay.
Many factors contribute to the gender pay gap and separating them is difficult. Despite this, proponents of the defunct pay equity legislation confidently assert, without evidence, that any pay gap between men and women is attributable to sexism.
If some female-dominated occupations are underpaid because they are female-dominated, that is a travesty that should be corrected. But, to get it right, we need reasoned debate that takes into account all the pieces of what is a very difficult puzzle. Unfortunately, the debate in our parliament and media seems characterised more by outrage than evidence.
Dr Michael Johnston is a Senior Fellow at the New Zealand Initiative.
Bali Haque, is a New Zealand educator. His career has included four principalships.
This article was published HERE
3 comments:
Article might interest
https://www.journals.uchicago.edu/doi/10.1086/715835
Pay gap explanations usually rely on incomplete data
The existing pay equity scheme doesn’t work because you’re not comparing apples with apples. End of story.
Pay equity is a complete fallacy.
It implies I should be paid the same as Linda evagelista for getting out of bed everyday….but let’s face reality, I am not 6ft and built for walking up and down a runway. A bus driver doesn’t get the same as a pilot even though both arguably are responsible for the lives and safety of their passengers.
A person training to work as a librarian begins that training knowing full well that being a librarian doesn’t pay very well….so if they’re not going to be happy with what the profession pays why on earth are they not training to work as an it professional instead? (Arguably similar work, similar working conditions but higher skill set and much better pay - for about the same amount of training.)
I’m a woman
I’m a mum
I work in a male dominated industry and I’m paid for my skills and experience….
I think the pay equity thing was absolute horse droppings from the start and just another way for people paid for by taxpayers to extract more money from actual taxpayers….you know the few people left in this country who don’t rely on taxpayers to ensure their income.
Productivity in this country is broken because everyone in it seems to rely on taxpayers of which there are fewer and fewer. Eliminate working for families, downsize and defund all ministries by half… Javier millei is my new hero.
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