Jim Rose: Pay gap widest in top professions

The further up the pay ladder, the more demanding jobs can be. Photo / 123RF

Part of it could be explained by women trading off a comfortable income to have both a career and a family

The gender pay gap is about 18 per cent at the big end of town. The pay gap for the top 10 per cent of full-time earners has been stubbornly high for coming on 20 years. For the bottom end of the labour market, the gender wage gap is barely 2 per cent; it is 6 per cent in the middle.

For those who blame the gender wage gap on an inherent inequality of bargaining power, that explanation does not add up when you consider the workers with the most options, educated professionals and managers, experience the largest gender pay gap - and a stubborn gap at that.

On the other hand, those workers at the bottom and in the middle of the labour market have gender pay gaps that could easily be explained by a small degree of trading off more agreeable hours of work for less pay. The gender gap always reduces considerably for workers who are in 9-to-5 jobs that are not unpleasant, disagreeable or risky, and within a reasonable commuting distance.

But that does not explain the stubbornly huge pay gap for professionals. Part of it certainly could be explained by professional women making the most of their ability to trade off a comfortable income to have both a career and family. But there is more to the story.

The further you go up the pay ladder, the more demanding jobs can be about the hours you work and when you must show up for work. Well-paid workers are indispensable members of the team.

Much of the gender pay gap at the top of the labour market would disappear if professional workers in rat-race jobs were not rewarded with promotions and partnerships for working long hours, being always available and showing up, no matter what, to court, the hospital, office or factory.

They are in jobs that have time-critical tasks that must be done by a specific employee who is well briefed on the task. Even then, some of the gender wage gap will remain because women will still trade off flexible hours for less pay to devote more time to raising a family.

Furthermore, there are systematic differences in the willingness to choose to go into a risky occupation if you are single, married, a parent, a single parent or a single mother.

The notion that parents who are the sole provider for their children are more careful about the risks they take is obvious but some will deny it. That is how hard it is to debate the gender wage gap. The notion that some part of the gender pay gap reflects the freely made choices of women is anathema to some.

Do not jump in too quickly by saying that more maternity leave is a solution to the gender wage at the top end of town. A social policy researcher told me that when maternity leave exceeds about five months, it starts increasing the gender wage gap. The career interruption is too great, key promotions are missed and education and skills depreciate.

Imagine if you were a 30-year-old male worker - about the average age that professional women have children now. Would it be a good career move to take a couple of years' leave?

You would come back reporting to the people you recruited and some of your skills would be a bit out of date too.

An example of this is that sexist hellhole which is Sweden. They have several years' maternity leave, high tax rates and stubbornly high gender wage gaps. Their gender wage gaps at the bottom and the middle of the labour market are three to four times that of New Zealand. If your objective is a zero-gender wage gap, you should rethink your position about supporting more maternity leave.

If your position is equal opportunities for men and women, a zero-gender wage gap may not be your objective. Your objective is women should be free to choose. Maternity leave certainly expands women's options, gives more choices, but it does not necessarily close the gender wage gap.

Jim Rose is an economic consultant in Wellington.