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Employment Today, HR Solutions - Thomson Reuters

Employment Today, HR Solutions - Thomson Reuters

Employment Today Magazine

Counting what counts for women at work

New Zealand celebrates 125 years of suffrage in September. Employment Today asked Professor Gail Pacheco how well we are doing in terms of gender equity at work.

For working women in New Zealand, 2018 is an auspicious year. The past year has seen significant research undertaken both locally and globally about the drivers of the gender pay gap and other factors that create inequities for women at work.

With more than a billion women expected to enter the labour market by 2030, companies internationally are having to assess their people policies to ensure they are fit for the future. Here in New Zealand we like to pride ourselves on our progressive social attitudes and our willingness to adopt new ways of thinking.

In September, we will celebrate 125 years of suffrage and Employment Today decided to ask AUT Professor of Economics and director of the NZ Work Research Institute Gail Pacheco how well New Zealand’s government and employers are doing in terms of workplace gender equity.

New Zealand was ranked ninth in the World Economic Forum’s Global Gender Gap report for 2017. Does this ranking reflect a steady reduction in our gender pay gap or is it that other countries are progressing more slowly than we are?

This ranking is based on four components—economic participation and opportunity; educational attainment; health and survival; and political empowerment. New Zealand’s ninth position bodes well as it was the only country, other than Iceland, to maintain a spot in the top ten from the previous year.

I can’t comment on all of the domains covered by that report, but can speak to gender differences in educational attainment and, of course, the pay gap aspect of economic participation. In the last 15 years we have seen massive strides in educational attainment by working age women, to the point where the proportion of women achieving graduate and post graduate qualifications now easily outstrips men.

However, beneath those aggregate trends there are still some stark differences in areas such as STEM subjects, and more research could delve into the life course determinants of this feature in the education uptake.

On the gender pay gap front, there were clear research findings of an unexplained gap in analysis we produced for the Ministry for Women in 2017. In response, the Ministry has produced some really useful guidance for both employers and employees to understand if there is a gender pay gap at their organisation and, if so, what they can do to try and minimise it.

One area of focus with regard to economic participation that still needs more work is the presence of women in senior or managerial roles in the workforce. The 2018 Women in Tech GlobaI Index analysed 22 factors including wage, pay gap and inequality data.

While New Zealand ranked fourth equal by percentage of senior or managerial roles, women still accounted for fewer than 50 percent of management roles in every nation surveyed, so no one country is promoting women equally.

The reality is that there is only one female CEO in our NZX Top 50 companies, and New Zealand women are under-represented at board level which is a global trend.

A 2016 Institute for International Economics survey of 21,980 publicly traded companies in 91 countries (Is Gender Diversity Profitable? Evidence from a Global Survey) demonstrated that the presence of more female leaders in top positions of corporate management correlates with increased profitability of those companies, so there is a valid business reason to address this.

What workplace gender initiatives are occurring elsewhere in the world?

There are a plethora of legislative initiatives being implemented around the world. In the UK, from March 2018, organisations with 250+ employees must report on their gender pay gap. In Iceland, from January 2018, organisations with 25+ workers must prove they pay men and women equally for equal work. In France, new regulations from March 2018 mean firms must prove they will close the gender pay gap in the next three years or face fines. This includes the introduction of software to monitor wage discrepancies that firms should use if they have 50 or more workers.

Other types of initiative that also come to the forefront in this discussion are childcare subsidies, and flexible work arrangements. The latter should be increasing across the workforce given the changing nature of work and the impact of technological change in many industries.

Minister for Women Julieanne Genter believes that the government can close the gender pay gap in the public sector by 2022. She believes this can be achieved by holding the chief executives of government agencies “accountable” and writing equal pay for women into their key performance indicators (KPIs). Other countries have used pay transparency legislation to hold employers’ feet to the fire on equal pay. Do you think that pay transparency legislation in New Zealand would mark a quantum leap in closing the gap?

I would be more in favour of a carrot, rather than stick approach, with the stick being some form of legislative action. Organisations need to understand that it makes good business sense to do what they can to investigate possible gender pay gaps within their organisation, and rectify it.

You recently released a report (jointly done with Motu) on the relationship between parenthood and labour market outcomes. What were some of the key findings that are relevant here?

The aim of our study was to describe what happens to men’s and women’s labour market outcomes when they have children. This is made possible because Statistics New Zealand has, in recent years, enabled links between de-identified individual data on all the births in New Zealand to data on wage earnings for every person in the country.

So we can see an individual’s employment and wage earnings every month for several years up to the point when they have a child, and then watch what happens to them for a decade afterwards.

We find on average after women have children they’re less likely to be employed and, if they do work, they work fewer hours and have lower monthly wage earnings. These effects are still evident ten years later. We don’t see any of these things for men.

When we look at hourly wages, we find a gender wage gap even between non-parents (5.7 percent), but it’s much larger between parents (12.5 percent).

Finally, when we estimate the effect of becoming a parent on hourly wages, the average women earns 4.4 percent lower hourly wages as a parent than if she hadn’t had children, whereas we find no significant effect of parenthood for men.

The magnitude of this effect is greater for women who are away from paid work for longer: 2.3 percent for women who return to paid work within six months, 6.6 percent for those who return in months 7-12, and 8.3 percent for those who take longer than a year to return.

Our research shows that parenthood exacerbates pre-parenthood gender wage gaps, with time out of work and reduced hours both playing major roles.

It is likely that we won’t see equality in the labour market until it is as common for a dad to stay home with the kids as it is for a mum. While many mothers may want to take time away from work to raise their children, this should be a personal (or family) choice and not the result of traditional gender roles.

You are a judge of the Innovation Award sponsored by AUT at the 2018 YWCA Equal Pay Awards. What does innovation in achieving equal pay look like?

That’s a great question because we know from previous awards that many businesses are innovating to measure and close their gender pay gap and to remove other barriers for female staff to be valued equally.

The award is not just about identifying and fixing gender wage disparities within your workforce, but also innovative employment policies and procedures to prevent them. This can include removing salary bands for entry level roles so that all graduates start at the same pay rate, or maintaining KiwiSaver payments for all staff on parental leave irrespective of gender as ANZ does.

A previous award entrant identified that mothers returning to work could reduce their commute and increase their available office time by getting free priority carparks on site.

It can be a little thing that moves the lever, but we do see that companies with a culture that rewards experimentation, fail-fast methodologies and a collaborative appraoch to problem solving are more likely to be able to innovate with achieving equal pay.

PROFESSOR GAIL PACHECO is a judge of the 2018 YWCA Equal Pay Awards. For more information or to enter:

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