Equal pay for work of equal value: making human rights and employment rights laws work together.

• Author: Hill, Linda

Abstract

This paper backgrounds the policy issues concerning equal pay for work of equal value and offers some thoughts on how human rights and employment rights could work together to ensure pay equity. Renewed interest in pay equity in New Zealand has links to international agendas in that New Zealand has ratified conventions on employment equity for women that are viewed as fundamental rights by the International Labour Organisation (ILO) and the United Nations. Nevertheless, New Zealand has come under criticism for lack of compliance on "equal pay for work of equal value". This paper addresses the question of how an effective policy for equal pay for work of equal value could be delivered under our current legislative frameworks.

INTRODUCTION

Our goal is to build an innovative economy. That means making the most of all our skills and talents ... The decisions of our daughters and grand-daughters should not be constrained by out-moded ideas about what women and the work we do are worth. (Laila Harre, Minister of Women's Affairs, July 2002)

Pay equity is once again on the agenda of government after 12 years tucked at the back of party policies. A discussion document Next Steps Towards Pay Equity was released in July 2002 (Ministry of Women's Affairs 2002a). In October 2002 an additional Human Rights Commissioner was appointed with responsibility for equal employment opportunities, including pay equity. In May 2003, a Taskforce was appointed to develop an action plan on pay and employment equity in the Public Service and education and health sectors.

This renewed interest in pay equity has links to international agendas. As an active participant in the international community, New Zealand has ratified conventions on employment equity for women that are viewed as fundamental rights by the International Labour Organisation (ILO) and the United Nations. New Zealand legislation prohibits gender discrimination in employment and requires equal pay for women and men employed for the same job. Equal employment opportunities are required by law in the public sector and promoted in the private sector.

In recent years, however, New Zealand has come under criticism for lack of compliance on "equal pay for work of equal value". This principle addresses the fact that women and men tend to be employed in different occupations, with work typically done by women rewarded at a lower average rate than work typically done by men.

Equal pay for work of equal value and gender pay gaps were last addressed in 1990 by the short-lived Employment Equity Act, but there have been considerable changes in the employment relations system since then. Can an effective policy for equal pay for work of equal value be delivered under our current legislative frameworks? This paper backgrounds the policy issues and offers some thoughts on how human rights and employment rights could work together to ensure pay equity.

EXPLAINING GENDER PAY GAPS

The gap between women's and men's average hourly earnings has been monitored by Statistics New Zealand since the Equal Pay Act 1972 was passed. (1) By 1977 the removal of all separate male and female pay scales had narrowed the gender pay gap six percentage points (Wilson 1993). There has been just under 9 percentage points improvement in the 25 years since then.

The June 2003 Income Survey showed that women's average earnings per hour were 87.1% those of men (Statistics New Zealand 2003). Annual figures since 1997 show a gender and ethnicity earnings gap. Pakeha women earned on average 85.3% of Pakeha men's earnings in 2002. Maori women earned 89.2% of Maori men's average earnings, 85.7% of Pakeha women's and 73.1% of Pakeha men's. Pacific women earned 99.2% of Pacific men's average earnings, 81.3% of Pakeha women's and 69.4% of Pakeha men's.

A Department of Labour study (Dixon 2000) has identified four contributory factors to the gender pay gap:

* the presence of dependent children in household (responsible for approximately 10% of the gap)

* differences in level of educational attainment (0-10%)

* differences in the number of years in the workforce (15-50%)

* occupational segregation between women and men (20-40%).

This leaves between 10% and 50% of the gender pay gap unexplained. Some progress has been made regarding the first three of these contributory factors, but there is a policy gap when it comes to addressing the fourth factor of occupational segregation.

Policies such as increased childcare provision and the recent legislation on paid parental leave will go some way towards addressing the gender pay gap where there are dependent children in the household. A more equal sharing of responsibilities within households would also help in this respect.

Women's gains in education have also narrowed the gender pay gap since the 1980s (Dixon 2000). Nevertheless, Census 2001 and 1996 data show that at all levels of educational attainment women earn less than men. After five years in the labour market, the gender pay gap across all disciplines was around $10,000 a year (NZ Vice Chancellors Committee 1998, 1999, 2001). As most women graduates are young, this differential is being created before career breaks for childbearing. Investment in education is not offering women the same returns as men, and total cost may be higher for women, as student debt is likely to be paid off more slowly from their lower average earnings (NZ Nurses Organisation 2002, Gordon and Morton 2000). The NZ University Students Association believes this could add 10% to the gender gap in income experienced by the current generation of women students (NZ University Students Association 2002).

It cannot be assumed, then, that the gender pay gap will close as educated young women gain years of experience in the workforce. There are smaller wage differentials by gender among younger workers (Dixon 2000), but research in other countries shows these increase and stabilise in middle age. This pattern is fairly consistent across all levels of educational attainment (McCann 1994, Crampton et al. 1997).

Educational levels continue to be an important factor in the lower earnings of Maori and Pacific people, but within these communities there is no gender difference in educational attainment. Those Maori and Pacific women and men who reach tertiary level perform well. It is in the labour market that gender and ethnicity disparities emerge. Among full-time workers, both Maori and Pakeha women with tertiary education earn considerably less than tertiary-educated men in full-time work, and Maori men earn less than Pakeha men (Maani 2000, Census 2001 data). The Department of Labour study attributed most of the difference between Maori and Pakeha women's pay to the fact that proportionately more Maori women are concentrated in lower-paid female occupations; that is, to occupational differences (Dixon 2000). Maori men are also disproportionately in lower-paying but typically male occupations.

Equal opportunities policies aim to address occupational differences between women and men, and are slowly contributing to desegregation. A 1998 study of trends showed that an even distribution of women and men across the labour market might be achieved in about 75 years (Barnett and Briggs 1998). The Department of Labour study and the graduate surveys show lower earnings in the occupations, professions and sectors in which women are most likely to be employed. This allows women's subject preference to be offered as an explanation of later lower earnings. Recent preference theories focus on work and family balance issues (Blackburn et al. 2002, Hakim 2002), but do not investigate or explain why it is that female-dominated occupations and professions should be worth less than those that employ mainly men, as shown by the Department of Labour.

No current policy directly addresses the link between occupational differences and lower pay for women. This was the policy gap identified in Next Steps Towards Pay Equity (Ministry of Women's Affairs 2002a, 2002b).

EQUAL PAY FOR WORK OF EQUAL VALUE

Why is it that the kind of work women do is worth less per hour on average than the work that men do?

ILO research shows that occupational segregation by sex is an extensive and enduring feature of labour markets, and a major source of market rigidity and economic inefficiency (Anker 1997, 1998). Other studies show that the higher the proportion of women or of an ethnic minority employed in an industry, an occupation, a firm, or even a work team, the lower the average pay (Pocock and Alexander 1999, Lapidus and Figart 1998, McCann 1994). The 2001 Census showed the 10 most common occupations for women (sales assistant, general clerk, secretary, registered nurse, primary teacher, cleaner, caregiver, information clerk/receptionist, accounts clerk, and retail manager) employed 30% of all New Zealand women, while 21% of men were employed in the 10 most common occupations for men (sales assistant, general manager, truck driver, builder/contractor, crop/livestock farmer/worker, labourer, dairy farmer/worker, retail manager, and slaughterer). There were similar concentrations of Maori and Pacific women and men in somewhat different sets of most common jobs, with the four top jobs employing a quarter of all Pacific women (Ministry of Women's Affairs 2002b).

Equal employment opportunity policies may help counter this crowding effect, but do not address the fact that jobs commonly done by women are routinely considered to be worth less than the jobs men typically do. Many occupations in which women are concentrated reflect women's traditional roles in the family: responsibility for children, caring for the sick or elderly, cleaning, cooking and sewing, emotional support and maintaining family relationships. Because of the unpaid nature of women's family roles, their abilities may be seen as "natural" female characteristics, rather than work skills essential to many jobs in the...