Pay Equity

HUMAN RESOURCES INSTITUTE OF NEW ZEALAND

SUBMISSION TO THE MINISTRY OF WOMENS’ AFFAIRS ON Pay Equity

Contact details:

We do not wish to appear before the Committee to speak to our Submission. We can, however, be contacted at :

Crispin Garden-Webster, Vice-President, HRINZ, 
C/o Level One, 35 Victoria Street,
Wellington,
Business : 04 – 499 2964 
E-mail : [email protected]

Introduction

The Human Resources Institute of New Zealand [HRINZ] is an association of people who are interested or involved in the management and development of people at work.

The Institute's objectives are:

· to encourage and support the development of professional knowledge and competence and high standards of performance among its members within New Zealand;

· to promote within New Zealand understanding of all aspects of human resources management and development and its contribution to the performance of individuals and organisations; and

• to provide within New Zealand an authoritative and influential viewpoint on all matters affecting its members and the management and development of people at work.

Preliminary issues

A number of members of the Institute agree that the issue of ( inter alia ) pay inequity needs to be addressed in the education system. Business and education need to collaborate and raise students’ awareness of the range of professional options open to them and the likely remuneration. If female students target employment in areas that are traditionally female and traditionally low-paid, then the problem will persist. If, in the alternative, female students target areas of employment hitherto the preserve of males, then the pay inequity cycle stands a chance of being broken. As the outflow of nurses continues to increase, so, eventually, will the concentration of minds of those in charge of funding to then increase nurses’ pay and conditions to the extent that nursing ceases to be in the category of low-paid female employment.

In the past, most jobs were of a physical nature and depended upon men, the majority of which were likely to have more physical strength than women. Further, the concept of the single wage earner was the norm with women working in areas that could be described as the ‘caring’ areas of work, such as nursing, teaching, cleaning and care for the elderly/disabled/children. When considering what factors contributed to this, one member said, “The value society places on these roles. The ability of the market/employer to pay and the value they place on that role in comparison to others. eg can hospitals afford to pay nurses more, will their funding sustain increases and how does what they get paid compare to others in the same organisation? Some funding may be being directed to the wrong areas e.g. ratio of admin functions to those that generate revenue.” Also, female access to tertiary education was limited and young women’s professional aspirations were severely curtailed by pressures from many quarters.

These factors can now be said to be inapplicable to New Zealand in the 21^st century. The majority of jobs require little, if any, physical strength. The advent of the single parent and the need for two incomes obviates the argument for the ‘male bread winner’. Data provided by the Ministry of Education demonstrates that female students are outperforming male students and the pattern is repeated in tertiary education. Yet it is to be asked, to what extent the professional aspirations for young women are being answered in the education sector?

• For example there is a shortage in New Zealand of planners and engineers which are traditionally seen as male roles yet there is no reason why women could not be employed if they have the right qualifications. There is an oversupply of librarians which is a traditional female role and is more poorly paid. By the time you look at employment it is to late to fix the problem and trying to align pay for a librarian with pay for a planner bears no reality to the market place.
• Efforts to improve indicators for a population may be directed at raising the highest aspirations, raising the average or raising the minimum. To broaden employment opportunities for Maori, Pacific and immigrant women requires a large-scale adult education campaign, especially in English language skills. A government/employer/union partnership to provide the necessary education through workplaces employing these groups is difficult to plan and implement but would have the potential to make a far greater impact than the purely remuneration approaches discussed in the MWA paper. While education approaches are thought of as ‘slow’, the social impact of such a campaign could occur more quickly than expected, because wider opportunities will be taken up by women acting in their own personal interests.

· The majority of emphasis on the discussions centres around women in general, but particularly Maori and Pacific Island women. However, it appears that the largest gender gap lies with educated women, who five years after completing their tertiary education, note a $10,000 gender pay gap. As this appears to be in the professional jobs, this should be the easiest and first irregularity to correct.

· As far as Pacific Island and Maori women are concerned, they have proved that they can achieve high levels of education. The lack of education for the majority is the root cause of the gender gap and a focus on encouraging higher education AND entering more male dominated industries would eventually lessen the gap.

In the UK the Kingsmill Review found widespread agreement on the need for further action on women’s employment and pay. “This is not simply a matter of equal treatment and social justice. Without such action the education and skills of women will be a wasted national resource.”

Comments

One member comments, that the best thing in the MWA discussion paper as a suggestion for legislation is a proposed requirement on employers to ensure their remuneration systems do not discriminate. This follows the successful approach in OSH and would reinforce the Human Rights Act and anti-discrimination provisions of the Employment Relations Act. It is also suitable to the decentralised structure of employment and bargaining in New Zealand today.

· In support of pay equity nationally I would recommend a three-pronged approach:

- a legal requirement on all employers to ensure remuneration systems do not discriminate by sex,

- a reporting requirement aimed at measuring both gender pay gaps and occupational sex segregation within larger organisations, and, if a regulatory agency is required,

- a small audit agency to spot check the accuracy of statistical information submitted in response to the reporting requirement. Alternative approaches could be a division of IRD, of Statistics New Zealand, or to have these figures audited by organisations’ own auditors in the course of the annual audit.

In my view such an approach would have the greatest potential impact to improve the relative remuneration of women at the average and better than average levels.

· It is my belief that pay comparisons by sex are not widely made or known within organisations for a number of reasons, among them:

- there is no requirement to do this analysis

- they are considered divisive

- lack of suitably skilled staff in smaller companies.

· A requirement to provide figures on occupational sex segregation and the gender pay gap could be a confidential reporting requirement, with public information made available only on aggregated statistics, as with the deposit of collective agreements with the Dept of Labour.

· This would create the missing knowledge in some members of each organisation. There would be discussion, and pressures from staff to share the information and develop actions around their own situation.

· Larger organisations would include most of the public sector by number of employees, without confining action to the public sector as with equal pay, which could act to delay its wider implementation (equal pay: public sector 1960, NZ at large 1972).

· If change resulted from the new requirements in those organisations caught by the legislation, then it would move the market rates, and small employers would have to move their rates for genuine business reasons without having to waste resources in compliance costs.

· Reports required in dollars would be in a language everyone can understand to a far greater extent than job points.

· Examples of reports that could be required from, for example, employers of more than 100 staff or employers large enough to employ at least one full-time human resources professional over and above payroll, could be:

- Numbers of men and women employed (all ‘numbers’ actual headcount rather than FTE)

- Average man’s and woman’s salary (FTE and actual incomes)

- Numbers of men and women employed by salary bands

- Average man’s and woman’s salary within each band (FTE and actual)

- Numbers of men and women employed by occupational group

- Average man’s and woman’s salary within each occupational group (FTE and actual)

- Numbers of men and women employed by occupational group and salary band (FTE and actual)

- Average man’s and woman’s salary within each occupational group and salary band (FTE and actual)

- By ethnicity for groups forming 10% or more of any segment

· This information does not require high-level statistical skills to produce or understand

· The availability of this information in aggregated form would have a substantial effect on internal labour markets in the organisations that produced it, on the wider labour market if widely available, and, I would argue, on women’s bargaining power.

· One member felt strongly that the job evaluation approach is absolutely wrong-headed. Job evaluation is valuable as one source of information about pay within an organisation, because:

- It provides a way to compare levels of skill and significance of work output for staff who know the other jobs quite well

- It avoids direct dollar comparisons and helps avoid envy and ill-feeling within an organisation.

· On the contrary, to attempt to develop a national system to compare not only jobs but job families across vastly different organisations will only result in mystification, disillusionment and cynicism.

· Direct dollar comparisons would be of greater benefit to the market nationally, as a lack of information about what to expect in remuneration weakens women when negotiating for their own pay.

The discussion paper acknowledges that a proposal for a national, gender-neutral job evaluation system is not suited to the structure of employment in New Zealand today. It harks back to older concepts of employment and the Employment Equity Act 1990 which was never implemented. The spectre of a publicly funded government organisation with the mission of establishing and promoting a mandatory national job evaluation system is that of a dead weight on the economy with little genuine, positive change to offer but a welter of information leaflets, forms and technical jargon.

Another member believes that legislation is the only way to ensure compliance. There was also the view that an independent agency would be the ONLY objective method of appraising the value of jobs. Perhaps the Government could highly subsidise the evaluations to ease the burden on the employer. The comparison between a trained nurse and a trained police officer was very valid. The nurses in the public sector are definitely undervalued given their length of training and comparable responsibilities to police officers. Family friendly workplaces that can offer continued career development will encourage employers to invest in women’s career development and receive a return on their investment. Fully funded government child-care could make a huge difference to working mothers. Such a subsidy could well offset the effect of the gender gap in the short term. It is a very difficult issue to resolve in the short term without causing major financial impact on both large and small businesses. The issue should be well publicised for input from those affected. Perhaps an internet based points evaluation system for employers could be effected with employers subject to spot audits by EEO.

From an employer’s perspective, there was acknowledgement that rising wage costs would be a major concern. From a feminist point of view, this member could see opportunities for improvement. Closing the gender pay gap will increase compliance costs, will increase business wage overheads, but the change has to start at some point in time. Short-term pain for long term gain.

Conclusion

The Institute has elicited the views of its members and those views, it may be said, are not homogenous and therefore this submission is an exposition of those views which the Ministry may wish to consider.