Are we being duped on the gender pay gap?

Friday, 27 August 2021

Eyebrows were raised when an 18 per cent gender pay gap at a major media company was revealed in an independent audit – double Stats NZ's annual figure. But as Alison Mau reports, new research shows gaps of 20, or even 30 per cent are common – prompting calls for legislation to trigger action in the private sector.

Deep in the executive summary of the Maria Dew report is an arresting number – one that readers of the QC's delve into MediaWorks' worrisome corporate culture might not have been expecting.

Dew heard enough complaints about pay from staff and managers during her interviews, to prompt her to ask for a separate gender pay audit. Remuneration consultant Helene Higby put the gap at 18 per cent; much higher than the reported national average. It sounded bad,but new figures released to Stuff show MediaWorks is no outlier when it comes to the pay gap – certainly not in the private sector.

Auckland consultancy Strategic Pay's analysis of 187,000 Kiwi workers, shows an overall pay gap of 18.5 per cent. At CEO level it's higher, at 32.7 percent.

**READ MORE:

* Scathing MediaWorks review reveals 'boys' club culture', bullying and racism

* We pay women 30 per cent less than men overall, here's why

* Can pay transparency reduce the gender pay gap?

**

The figures seem sharply at odds with those released annually by StatsNZ, which last week again reported the difference in men's and women's pay at 9.1 percent; around the same level it's been for a decade.

Some who've done the navel-gazing are not surprised at the discrepancy. David McLean, recently-retired CEO at Westpac, says his experience tells him 9 per cent can't be true.

'I'm sceptical. I think it's much higher.'

McLean launched an audit at Westpac in 2019 and was 'startled' by the results – the overall gap was 30 per cent. The bank was confident it had nailed pay equity – men and women doing the same job, earning the same amount – but it was doing poorly on pay equality. In Westpac's case, 62 per cent of its staff were women, but most of those were clustered in lower-paying jobs, while the high-pay roles like IT and high-level banking were dominated by men.

These structural issues are part of the problem and action to bring women into higher-paying roles, and into male-dominated employment sectors is part of the long-term solution, but it does not completely explain the disparity in the two reported numbers.

WHAT'S THE DIFFERENCE, THEN?

Sector experts say the way the numbers are gathered may be hiding a much bigger pay gap than New Zealand is used to admitting.

StatsNZ measures the pay gap using median hourly pay for men and women. This is helpful because it measures a fixed amount of work, and includes part-time work.

As StatsNZ's Andrew Neal​ explains it: 'We know that more women are in part-time employment so if you use weekly or annual income then that’s going to cause a difference and likely a larger gap. For example, if we use the median weekly earnings from wages and salaries then the GPG (gender pay gap) is 23 per cent in the June 2021 quarter and 20 per cent in the June 2020 quarter.

'While that happens to look closer to the consultancy figure of 18.5 per cent it is inherently misleading given the differences in hours worked.'

StatsNZ must also calculate the gap in a way that allows our experience to be measured against other countries, and Neal points out its estimate is designed to represent 'the full spread' of Kiwi workers.

By contrast, the figures from Strategic Pay's analysis include all elements of pay, not just hourly pay, and that includes the 'discretionary' parts of workers' packages.

Managing director Cathy Hendry says this is a much fairer measure.

'There's benefits, cars, car allowances, insurance, superannuation – and that can all have quite significant value. On top of that there's the variable element [like] bonuses. There's a lot more going on, and you're not looking at the full picture if you're just looking at salary.'

MediaWorks confirmed Helene Higby's pay gap analysis did measure all remuneration.

'This is particularly important when it comes to our sales team,” a MediaWorks spokesperson said. (The Maria Dew report noted further investigation into gender pay gaps was needed in 'Key Account Management roles, General Manager Sales roles, and Content Producer roles'.)

The Dew report also revealed there are pay equity gaps at MediaWorks, which means men and women in some instances are not being paid the same, for the same or similar jobs . The report describes these as a 'job family'.

'MediaWorks does not currently have any formal company-wide remuneration job banding structure, so the Gender Pay Report has made a broad assessment,” Dew explained.

We can do better than broad assessments, say those pushing for meaningful pay equality solutions. Companies with a formal pay structure, like job banding, have a better chance of achieving pay equality than those that don't.

Siobhan McKenna is project director of MindTheGap, an NGO set up in July to campaign for pay equality, and agrees job banding is a crucial starting point.

'It allows for variations in experience, and how long you've been doing the job. When you're in a band of say, $70k to $90k, you start at $70k and you know in your negotiations you can move up.'

MediaWorks has vowed both pay equity and pay equality will be part of its response to the Dew report's findings. It will introduce a banding system, benchmark that against the market, and a five-year gender pay equity plan would follow.

'The immediate focus will be on ensuring any people who are doing the same job, get the same pay,” a spokesperson said.

Stuff asked other major media companies to explain their pay gaps and pay structures.

TVNZ, which reported a pay gap in its 2020 annual report of 2.4 per cent, uses average hourly rates for all permanent employees as a measure. Incentives were not included but were 'reviewed and moderated to ensure equitable relativity between individuals at similar levels of performance”.

A spokesperson said there were now more women in senior roles, which 'in absolute terms' should mean more incentive payments being made to women, than men.

Most TVNZ employees used their own vehicles and paid for their own parking, although some had both as a 'tool of trade' based on their role. Formal pay bands included all permanent and fixed-term contract roles. It was not willing to separate out presenter roles and disclose their pay for privacy reasons and because 'like-for-like role comparisons are challenging', with presenters working different hours and often taking additional presenting roles.

News and radio company NZME would not disclose whether it had a formal pay structure but said it had reviewed its gender pay gap in 2020 and took action to address it. It did not reveal what the gap was.

Stuff said it operates a formal pay structure and measures its pay gap for gender and ethnicity. It was not able to provide details by publication time.

WHAT CAN BE DONE TO CLOSE THE GAP?

When Jo Cribb took the stage for her Wellington TEDx talk in 2017, she suggested her audience do one simple thing – ask their employers directly about their company's pay gap.

Her #JustAsk campaign generated 'quite a lot' of feedback, but the results were mixed, she found.

'Some of them got an answer [but] many of them got fudged – they got told 'we're looking into this' or 'that's a good question' Cribb said from her Wellington consultancy.

Despite suggestions they could use 'safe' ways of asking the question – as an employee group, through their manager, or through a union – many reported feeling afraid of being tagged a troublemaker.

'What does it say about our workplaces when you can't ask that without fear?'

In Cribb's view, the issue is less about numbers, and more about survival.

'The gender pay gap is not just a figure. It's a family's ability to put food on the table. It's the difference in getting the car fixed, or not.'

She notes even within Stats NZ's 9.1 percent figure there are huge disparities, especially for Māori and Pasifika women. Using StatsNZ's model, the gap between Pākeha men and Pasifika women, is a massive 27 per cent.

Pasifika community leader Bernadette Pereira MNZM, says women from the Pacific are 'way behind' other women in job opportunities and pay.

'Most of our women are on factory floors where pay is uneven, poorly waged, and in caring roles where wages are well behind 'living' decent wages. In the mid-professional level, Pacific women who may hold the same or similar jobs with palagi counterparts are paid less than palagi.

'There is no equality or commitment from all sectors of leadership in this country to change [their] work conditions. Please, let's start some action now.'

That action, according to most Stuff spoke to, must now be legislated – publicly reported pay gaps, every year, from private sector organisations. Some suggest we might follow the UK and Australia and restrict that to companies with more than 100 employees. But MindTheGap is pushing for New Zealand to become the first country in the world to mandate both gender and ethnicity pay gaps from all companies.

Despite the passing of the Equal Pay Act almost 50 years ago, employers had no incentive to comply – and there was no penalty when they did not, says McKenna.

'It's still all too common to find employers breaking the law. It's as if [they] don't know they can be substantially fined per breach, or sent to prison, or both.'

She says ideally, annual public reporting of a company's pay gap would be monitored by a dedicated agency for breaches of the laws, and penalise those who don't comply. This was working in countries where the penalties are tough enough – in Australia you might be prevented from participating in government tenders; in France, companies can be fined a percentage of their payroll if they don't report and take meaningful steps to fix the disparities.

Stuff asked employers' group BusinessNZ for its members' views on mandated reporting. Communications manager Kathryn Asare said the organisation had not asked about this specifically, but 'mandated disclosure of their business data beyond that which is required by law' had been resisted in its other surveys.

Asare said BusinessNZ would give its members advice on how to comply with new legislation if it was implemented.

David McLean is one of those who now believes it's time to drop the carrot and pick up the stick.

'There's a naive feeling that we are all trying to do the right thing, and it will correct itself. It won't – you need some blunt instruments.'

He rejects the notion that mandated reporting would be onerous for employers, saying it can be done by downloading salaries to a simple spreadsheet.

IS MANDATED PAY GAP REPORTING LIKELY?

Employment Relations Minister Michael Wood said he was 'interested' in working on pay transparency and hoped to make progress later in the term. He said he was confident StatsNZ used the most appropriate measure 'given the datasets they have available.'

Minister for Women Jan Tinetti said she was developing a women's employment plan, talking to the private sector and was considering mandatory publication of gender pay gap data 'in all sectors'.

'Last year recorded the lowest gender pay gap in the public service for the last 17 years. There are many organisations and individuals in New Zealand who are taking action to close their gender pay gaps and it’s up to the private sector to follow suit,' Tinetti said.

Siobhan McKenna has no argument with that – though she adds New Zealand women have already waited close to half a century for fairness to be delivered. She wants action now.

'Through the FMA the banking and finance sector is being actively monitored on behalf of its customers. We don't wait for banks to dob themselves in so why aren't we actively monitoring the illegal pay equity breaches on behalf of our national workforce?'