Wednesday, February 11, 2015

How to close the gender pay gap

New Zealand First's Tracey Martin highlights the gender pay gap:

New Zealand First Deputy Leader Tracey Martin says the National Government should be ashamed that nothing has been done to improve the gender income gap between men and women under its watch.

“The Salvation’s Army’s latest State of the Nation report entitled ‘A Mountain All Can Climb’, highlights a number of social areas where the government could do better, including the dismal statistics comparing the amount women earn compared to men.

“It quotes the New Zealand Income Survey estimate that women earn about 75% of what men earn with the gender gap unchanged since 2009.

“This is an abysmal state of affairs and shows the government doesn’t care about improving the plight of women in the workplace.

So how can we fix this? Like many countries we've legislated for equal pay, but clearly that's just not enough. Women are still being paid less than men for the same work, despite it having been illegal for over 40 years. And labour inspectors won't even look for gender discrimination unless they don't need to.

One thing we can do is transparency. Here's some stats from Australia:
Keeping pay secret contributes to the gender pay gap. The Workplace Gender Equality Agency analysis shows the pay gap is largest when pay is secret – in an individual agreement (20.6%) and almost non-existent when pay is set publicly by an award (-2.5%). In between awards and individual agreements are collective agreements. Under a collective agreement base pay tends to be public but payments over and above (e.g. performance payments) are secret. The gender pay gap is 16.9% when pay is set by a collective agreement.

And its a similar story in the US. Allowing workers to talk about how much they are paid lets them uncover discrimination and do something about it. Forbidding them lets discrimination fester and grow. The solution to this then seems to be easy: amend the Employment Relations Act to ensure that any pay confidnetiality clause has no effect and that punishing workers for talking about how much they are paid is grounds for a personal grievance case. Both the UK and US have already passed such legislation. Isn't it time we followed suit?