Editorial: Time to close the pay gap - before we need women-only quotas

Global Women chief executive Miranda Burdon says we should act now on pay equity and women's representation or else quotas might be needed. Herald / file photo

COMMENT: One of the striking phrases that comes through repeatedly this week in our series The Equality Test is "I'm not in favour of quotas, but…"

To mark the 125th anniversary of women's suffrage, the Herald has examined whether women in New Zealand have achieved equality with men.

A recurring theme has been senior women in business observing that while change is happening, the speed is glacial. As Global Women chief executive Miranda Burdon put it: "New Zealand is well placed to take the lead without explicit rules like quotas, but only if we act."

One of the most alarming findings was the contradiction between female success in education and low pay in the workplace. Young women are now outperforming men at school and university, making up 62 per cent of tertiary graduates. Those with a bachelor degree are even paid fractionally more on average in their first year of work but after five years have fallen about $4000 behind. Women with doctorates lag their male colleagues by more than $11,000.

That trend continues throughout most women's careers. The gender pay gap is miniscule for 20 to 24 year-olds and 4.2 per cent for those aged 25 to 29. But from the age of 30 it begins to grow, reaching a peak of 18.4 per cent for women aged 50 to 54.

A small part can be explained by the so-called "motherhood gap" - the amount that women lose long term by taking time out from work to have children. Unsurprisingly this gap increases the longer a woman stays out of the workforce. It is difficult to resolve because in some cases women choose to sacrifice pay gains for what they and their partners regard as a more important family role. That may be changing as more men give up work to be full time fathers but overall the parenting debate is a red herring in the wider context of pay inequity.

Research for the Ministry of Women has calculated that 80 per cent of the pay gap is unexplained by time out for parenting or other factors, such as women choosing lower paid jobs than men. That leaves two main possibilities which are equally difficult to determine - either many women do not push hard enough for pay rises, as Retirement Commissioner Dianne Maxwell suggested this week, or many employers are either consciously or unconsciously biased against them.

Common sense suggests the two factors are working together. Most people do not consider themselves sexist or racist, but when faced with a big decision - such as who to choose for a promotion - they tend to play safe and pick people most like themselves.

That is probably why we have only two female chief executives leading our top 50 companies. It also explains why many women are so reluctant to put themselves forward, as they anticipate rejection, often correctly. The fact that Maori and Pacific women are also paid considerably less than Pakeha women suggests a rethink is long overdue.