Sexism driving gender pay gap - study

Women who contribute just as much as male colleagues still lag behind, study shows. Photo / 123RF

Sexism is holding Kiwi women back from earning what their male colleagues do when they contribute just as much to their company, a new study shows.

For the first time, researchers have been able to show that, despite adding the same amount of value, the average female employee is worse off, earning 84 cents for every $1 the average man gets paid.

"To put it simply, our research suggests sexism is likely to be a major driver of the gender wage gap," said Dr Isabelle Sin, of Wellington institute Motu Economic and Public Policy.

Despite growing concern, the national gender pay gap officially remains at 12 per cent, and has barely narrowed over the past decade.

Research has suggested a fifth of the problem could be explained by factors like differences in industries and women being more likely to work part-time - but 80 per cent has been put down to "unexplained" reasons such as bias and, at the top end, the "glass ceiling" effect.

Now, a fresh study has tested whether men and women are paid different wages for bringing the same amount of value to their employer.

The pay gaps they discovered could not be attributed to any difference in productivity, therefore ruling out factors such as workers taking time off to raise families.

Sin and her colleagues first looked at half of our working population between 2001 and 2011 to see how much of the overall wage gap might be explained by women working in industries that pay less.

"To put it simply, our research suggests sexism is likely to be a major driver of the gender wage gap," says Dr Isabelle Sin, of Motu Economic and Public Policy. Photo / Stephen A'Court

While they found women were over-represented in low-paying industries like food and beverage services, this accounted for only seven per cent of the entire gender wage gap, or a couple of cents in every dollar.

"If you add in the fact that women also tend to work in low-paying firms, we can say that 12 per cent of the overall gender wage gap is due to the particular industries and firms where women work," Sin said.

Studying productivity and wages in companies, they found women aged 25 to 39 were paid 16 per cent less for making a contribution of the same value to their employer.

For older women, the difference was even worse - at 21 per cent for those aged 40 to 54, and 49 per cent for those aged above - and the gap was also higher for employees who had worked at the same firm for longer.

"For both genders, productivity is higher for workers who have been at the firm for longer, but the wages of women with greater tenure are not commensurately higher," Sin said.

"That is, the gender wage-productivity gap does not go away once women have had the chance to demonstrate their worth to their employers."

The gap was particularly marked in a few industries, stretching to more than 40 per cent in finance and insurance, telecommunications, transport equipment manufacturing, water and air transport, and electricity, gas and water, and rail.

The team concluded that differences in willingness or ability to bargain were unlikely to play a major role in the gap, suggesting sexism was the driving factor.

"What we're going to do about it is another matter."

Women's Minister Paula Bennett said the new findings were unsurprising but "unacceptable".

Closing the gap was a "top priority" for the Ministry for Women, which recently put out advice for employers in the public sector and would soon be providing similar advice to companies, Bennett said.

Human Resources Institute of New Zealand chief executive Chris Till was also unsurprised - and his organisation had research suggesting the gap was as much as 14 per cent.

"It is for organisations to undertake gender pay audits and then act to do the right thing."

Equal Employment Opportunities Commissioner Dr Jackie Blue said the new research caused more concern.

"Government, civil society, and business communities need to tackle issues such as entrenched sexism in the workforce head-on if we are ever to expect equality for our younger generations - implementing pay transparency is a good place to start."

NZ Public Service Association national secretary Erin Polaczuk said there was now more than enough studies to show a problem, which could be tackled through greater transparency and not putting parity at employers' discretion.

'They don't seem to be valued'

Wellington public servant Chantalle Smith wants the Government to close the gender pay gap. Photo / Mark Mitchell

It's simply the "unfairness of it" that angers Chantalle Smith.

"I always feel that women work so hard - and probably in some cases harder than their male counterparts - yet they don't seem to be valued for the work that they do."

In the public sector where the Wellington resident works, women now hold around 45 per cent of board positions and senior leadership roles, but she still watches female colleagues - especially those with family commitments - struggle to gain an equal footing.

Generally, she felt employers also took for granted skills and traits that were unique to women.

She's against the Pay Equity Bill recently introduced to Parliament by the Government, which would mean workers negotiate parity claims directly with employers rather than before the courts.

"It will make it harder for women to put a case forward around equal pay," she said.

"There are too many hoops to get through."

But she said urgent action was needed to finally close the gender pay gap - and wanted to see it become a talking point this election.

"I think the Government shouldn't under-estimate the power of this equal pay campaign," she said.

"As I talk to more and more people about it, they start to realise just how much of an issue this is - and how addressing it will address other issues around womens' working lives."

Gender pay: the policies

NATIONAL: Repeal previous legislation with the Pay Equity Bill, meaning employees would file pay equity claims directly with employers rather than negotiate through the courts, and prohibit employers from discriminating based on gender. Recommend ways for employers to close the gender pay gap.

LABOUR: Oppose the Pay Equity Bill, which Labour argues will make achieving pay equity harder, and draft a new law to support future claims.

GREEN PARTY: Oppose National's proposed Pay Equity Bill, make public sector chief executives responsible for achieving pay equity for employees of core Government departments by 2020, and require statistics about pay rates for men and women to be published.

NZ FIRST: Oppose National's proposed Pay Equity Bill, review all industrial relations law to ensure "fairness, flexibility, and neutrality".

MAORI PARTY: Oppose National's proposed Pay Equity Bill and re-write it.

ACT: Support the Pay Equity Bill.

OPPORTUNITIES PARTY: Push for "radical transparency" around discrimination in workplaces and encourage "behaviour that recognises individual success".