Bridging the pay divide

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Do women earn less because of the life choices they make? There's more to it than that, argue Galia Barhava-Monteith and Sarah Wilshaw-Sparkes.

When it comes to asking for a raise, men tend to be better than women, but that fact alone doesn't explain why the pay gap persists. Photo / Mark Mitchell
When it comes to asking for a raise, men tend to be better than women, but that fact alone doesn't explain why the pay gap persists. Photo / Mark Mitchell

Now the dust has settled after the (very) unfortunate comments from the former CEO of the Employers and Manufacturers Association (Northern), it's time to take a fresh, fact-based look at the New Zealand gender pay gap and its causes.

That women earn less than men, and have done for many years, is an indisputable fact. There have been many explanations for the pay gap, including Alasdair Thompson's ill-advised comments. Other explanations have been more thoughtful and worthy of further exploration.

Earning gap vs pay gap

Some people argue there is no pay gap, but instead an "earning gap", resulting from women's choices to take time out to have children, work part-time, and so on.

It is important to differentiate between the unadjusted pay gap and the adjusted pay gap. The unadjusted, or raw, pay gap is the earning gap; it does not take into account the differences outlined above between men and women.

So, indeed, part of the gap can be attributed to the fact that women are more likely to be in part-time work and in lower paid industries that are seen as offering more flexibility. However, there is still a proportion of the pay gap that cannot be explained by these "life choices".

One of the best ways to show there is a gap - regardless of women's life choices - is to examine the pay of students fresh out of university. This way, we can control for education and life choices, as most young graduates haven't yet had to make those choices.

The Ministry of Women's Affairs studied incomes for male and female graduates who left university between 2001 and 2006. The study examined differences in income between males and females one and five years after entering employment, after completing a bachelor's degree or higher qualification.

The results were striking. In the first years of the new century, after 40 years of the feminist movement, women with a bachelor's qualification or above were still earning an average of 6 per cent less than men with the same qualifications straight out of university. After five years the average income gap had increased to 17 per cent.

Let's take a "female dominated" field - media and public relations. The 2010 Census of Women's Participation, published by Equal Opportunities Commissioner Dr Judy McGregor, found that women with one to two years' experience earned on average $342 more than their male counterparts. But by five to nine years the situation was reversed, with women getting at least $20,000 less than men.

As with most things, there isn't one simple explanation for these striking figures. Rather, several explanations are worth considering.

Too few women at the top

In New Zealand, women are woefully under-represented in the top jobs. Among companies in the NZSX top 100, a mere 4 per cent of chief executives were women, and of those in senior leadership teams reporting to the CEO, only 21 per cent were women, found the 2010 Census of Women's Participation. Unsurprisingly, among women in the top team, more than one in five were in HR.

And were those women paid the same as their male counterparts? In our analysis, using 2001 Census data, we found that 18 per cent of men in HR occupations earned over $100,000 but only 10 per cent of women did. Once again, this demonstrates that women are less likely to be in top-earning positions, and when they are there, they are likely to earn less.

Presenteeism and productivity

It has now been refuted that New Zealand women take substantially more sick days than men. But the bigger question hasn't been addressed: does having your jacket draped over the back of your seat at all hours really mean you're productive?

On National Radio recently, we heard a (male) commentator argue that because men work longer hours, they amass more experience, explaining why they get paid more. Hmm. Both of us have worked for one of the world's most prestigious strategic consulting companies, the Boston Consulting Group. While there, we put in many 20-hour days and our fair share of all-nighters. We're sure than between 2am and 4am we were neither productive, nor did we gain any meaningful experience. And we know this super-charged "work experience" did not result in better pay for us.

Being present doesn't equal being productive. The challenge is for employers to be able to measure output - the quality of the product produced - regardless of the number of hours one is seen at one's desk.

Women - reluctant negotiators

We believe women are typically not great negotiators, and that partly explains why they are paid less. It's a simple case of "if you don't ask, you don't get".

It is well documented that women are simply not as good as men in negotiating their salaries. It may be that our idea of femininity prevents us from asking for more pay because we fear being seen as "aggressive" or "pushy".

But we don't believe in "blaming the victim". Yes, women might be worse negotiators than men, but that doesn't explain why, when everything is accounted for, there still is a gap.

This leads us to a final, and challenging, issue.

The D-word - discrimination

No one likes to talk about it, but the truth is that when all objective extraneous factors are accounted for, part of the pay gap remains. The reality is that "unconscious" bias does exist, and it does have something to do with why we, as women, get paid less.

Alice Eagly and Linda Carli, two outstanding researchers, have concluded: "A general bias against women appears to operate with approximately equal strength at all levels. The scarcity of female corporate officers is the sum of discrimination that has operated at all ranks, not evidence of a particular obstacle to advancement as women approach the top. The problem, in other words, is not a glass ceiling."

What can be done?

Do your homework - negotiate better

In our work with professional women over the past four years we have found they perform best in stressful situations when they are very well prepared. This is particularly true when it comes to pay negotiations. We advise women to do their market research very thoroughly, and be well aware of the salary band for their role, in their own and other organisations.

This depends on the networks the women can draw on; we encourage women to broaden and invest in their networks - another area where women lag behind men.

We also advise women to be very clear about what they have achieved, and contributed to their organisations.

There is a lot of advice out there for women on how to negotiate and we believe women will be well served if they take the time to read up before entering the negotiating room.

But it's not all up to us as individual women. To ensure there is a level playing field, transparency in the best policy.

Legislative change

Frankly, we are getting impatient. As businesswomen, we wanted to believe that patiently demonstrating the strong business case for having more women in senior and governance positions would speak for itself, but sadly it hasn't. As the recent debacle suggests, there are still some deeply held and discriminatory views out there.

Legislation can be seen as a blunt instrument, but it is a way to shine sunlight on an issue and to bring about social change. It has certainly worked with drink-driving, for example.

We support the legislation proposed by Dr McGregor (and a similar proposal from Green MP Catherine Delahunty), which we believe will mean greater transparency. We also support it because it should lead to more informed decision making by employers and employees when negotiating and reviewing pay.

We especially support Section 8, Clause 2 of the EEO Commissioner's proposed legislation: "Every employer must record any differences in the remuneration of male and female employees."

In our experience as strategic consultants, we find that that what get measured, gets done. If employers are not even aware they are discriminating against women, how will they ever be able to take steps to address the situation?

* Sarah Wilshaw-Sparkes and Galia BarHava-Monteith are directors of professionelle.co.nz, an online community for professional working women.

- NZ Herald

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