About Time: A Look at the Equal Pay Amendment Bill

By Patrick McTague and Jessica Sutton.

The gender pay gap is alive and well in New Zealand at 9.3% according to Stats NZ.[1] This figure has remained relatively unchanged since 2017, however, newly passed legislation may provide the spark needed for a final push to equality for women in this area.

The Equal Pay Amendment Bill passed its third reading on 22 July 2020 and is expected to be signed into law shortly. This Bill has been in the works since 2018, when a previous Bill was rejected in favour of this amendment Bill. The key provisions state that an employer cannot pay anyone less than anyone else who does the same or “substantially similar” work based on their gender, and they cannot pay a workforce which is or was exclusively, or predominantly (60% or more), female less than they would a workforce of men who do the same or “substantially similar” work.[2] The Bill then goes on to lay out how, and by whom, pay equity claims can be raised to make the process more accessible.[3] The purposes stated in this section are “setting a low threshold to raise a claim” and “providing a simple and accessible process to progress a pay equity claim”.

This legislation is a great step forward for women who have historically, and currently, made up the majority in lower paying industries including teaching, care work, and administrative work. Choosing to work in these industries should not mean having to make financial sacrifices when the effort and expertise required in these professions equals or surpasses male-dominated professions which are paid more. These groups now have a framework to argue that their entire industry is underpaid because it is made up predominantly of women, which could mean the beginning of the end of the very real gender pay gap.

Arguments made that any pay gap is based on the choices of women, dismisses the history of women in the workforce and their place in society as determined by men for decades (once they were allowed to work). The first jobs for women were in teaching and administration, then roles closely associated with traditional household work including as a seamstress, housekeeper, and nurse.[4] There was a brief spike in women in manufacturing during the world wars, but when men returned and reclaimed these jobs, women largely returned to their former ‘caring’ roles in the workplace. These types of jobs not only reinforced the message that women were the default carers, nurturers, and cleaners, but became the most underpaid industries when women began to dominate them. It is absurd to argue that it was somehow women’s ‘choice’ to be underpaid, as that was chosen by the men who ran the organizations and industries.

While the Stats NZ figure of 9.3% doesn’t account “for men and women doing different jobs or working different hours” (though we’ve just discussed why these factors are results of patriarchy and therefore should not be any cause to dismiss this gap), another ongoing report by PayScale examines the gender pay gap in the United States and provides results when these factors are controlled for and when they are not.[5] This report tells us that the uncontrolled gap, which takes the ratio of the median earnings of women to men without controlling for various compensable factors, is even larger in the US with 19%, a decrease of 7% since 2015. When controlling for job title, years of experience, industry, location, and other compensable factors, leaving nothing but gender the remaining factor, the gap still exists at 2% (down 1% from 2015). This tell us that regardless of industry, life choices, and external factors, women are still overall paid less than men. And, while 2% may not seem a lot, the report continues to calculate the loss in earnings of salary over a lifetime to be $80,000 for every woman. If you do not control for these factors, and take the real world pay gap in the US, that grows to a lifetime loss of $900,000 in earnings.

We have already noted in a previous article that the pay gap has severe consequences for women of retirement age, often forcing them to continue part-time work in their 60s and 70s to make ends meet. However, the impact on women starting in the workforce or in the prime of their career, cannot be over-stated. Young people are vulnerable at the start of their careers, as they may not yet have the confidence to demand what they are worth, or the knowledge to realise how much payment their work merits. Women may be particularly vulnerable to being financially short-changed as they are socialised to be pleasant and polite, and not to make “un-womanly” demands.

Women in the prime of their career may have the job of their dreams, but statistically are still going to be losing out. Sustained under-payment leads to fewer investments, fewer savings, and fewer life enjoyments for women. And often women will still be expected to carry out unpaid caring work at home during this period, meaning their labour is being undervalued in every sphere of life.

Emotionally, this kind of treatment takes its toll as well. Under capitalism, we inescapably value ourselves through how much we are ‘worth’ in wages. A high-paying job can lead to higher self-esteem. Finding out, or even suspecting, that you are being paid less than a male colleague, doesn’t just undermine you financially, it undermines your self-worth. Women appear less human under capitalism, because they are not treated as being worth as much as men. Moving towards pay equity therefore has practical and emotional benefits for women who have been historically undervalued and demeaned.

Some may wonder why pay equity reform is such a big deal. The modern struggles faced by feminism seem to centre on combatting violence, tackling toxic masculinity, and fighting for political representation. Our own content focus tends to reflect this. However, we cannot forget that the struggles of first and second wave feminists are not over. Women still do not have formal legal equality in certain areas of life, and in particular are still not being equally valued in the workforce. Any step toward true equity and justice is to be celebrated, and once again New Zealand is delivering on this basis.

We can all hope for a positive outcome in September’s election, so this progress can continue.

[1] https://www.stats.govt.nz/news/gender-pay-gap-unchanged-since-2017

[2] http://www.legislation.govt.nz/bill/government/2018/0103/latest/LMS86468.html

[3] http://www.legislation.govt.nz/bill/government/2018/0103/latest/LMS86540.html

[4] https://www.britannica.com/topic/history-of-work-organization-648000/Women-in-the-workforce

[5] https://www.payscale.com/data/gender-pay-gap

Photo by fauxels from Pexels

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