NZ’s gender pay gap at 8.2%: A hidden economic crisis in 2024 – Dame Theresa Gattung

THREE KEY FACTS

• The gender pay gap in New Zealand is currently 8.2%.
• Minister for Women Nicola Grigg has launched a gender pay gap toolkit to help businesses measure and address the issue.
• The toolkit aims to promote transparency and accountability.

This has been a year when many of us have been intently focused on interest rates.

As businesses and households continued to feel the squeeze of the recession, the OCR updates or the banks’ slightest rate moves have been met with a flurry of interest, as even the smallest shift has the potential for a major impact on Kiwis’ lives.

Whether it’s been some welcome relief on mortgages for homeowners, reducing monthly costs for struggling businesses, or keeping interest rates high on long-term deposits for some, the impact of those basis point movements is real and far-reaching.

But there is another critical and somewhat unseen rate impacting us all that has been idling away in the background this year (and for many years before) – the gender pay gap.

Dame Theresa Gattung. Photo / Babiche Martens

According to Stats NZ’s June 2024 data, it now sits at 8.2%, a very slight improvement on last year’s position of 8.6% but overall, still stubbornly stagnant.

When we look at that across the weekdays in the year, today in Aotearoa New Zealand, women effectively begin working for free (on the basis that there are 262 weekdays in 2024, and 8.2% equates to 21.5 days – hence we mark this on December 2).

What’s the big problem though some may ask? What does 8% really matter? Isn’t it just because of all the part-time working mums doing school hours or maternity leave that women take? Well, yes and no.

Firstly, putting 8.2% into more tangible terms, assuming that men and women worked the same amount of hours each week, an 8.2% gap would amount to a weekly gap of $110.13 in cash (using Stats NZ’s median weekly earnings of $1343 for Kiwis as an example).

Over a year that’s $5726.55 and over a working lifetime of 40 years, $229,062. Valuing that in today’s economy, it’s enough to purchase a 512sq m section in Banks Peninsula, a two-bedroom unit in Invercargill, about 75 return flights to London on Air New Zealand or just over six new Toyota Corollas.

Women in Aotearoa are being short-changed.

They are missing out, and actually Aotearoa is missing out too.

Far from just being a gender issue, this is an economic advancement issue. And one we should all start taking more notice of as we look for ways to reinvigorate our economy.

The factors that contribute to our gender pay gap are still many and varied. They range from occupational segregation, through to more complex pipeline and participation issues.

But the differences in education, the occupations that men and women work in, or the fact that women were more likely to work part-time, only explains around 20% of the gender pay gap.

The majority (80%) of the gender pay gap is driven by harder to measure factors like conscious and unconscious bias and differences in choices and behaviours.

The reality is that 8.2% is also actually a somewhat crude indicator as an average of the more striking inequity that exists across different sectors and occupational groups within New Zealand – some far more pronounced than others.

When we look at an industry level, the gender pay gap in professional and administrative services is a more eye-opening 19.9%. For information, media and telecommunications it is 23.2% and for financial and insurance services, it hits 29.3%.

Ethnic pay gaps are far more pronounced as well.

The gender pay gap for Māori, Pasifika, ethnic, and disabled women is significantly higher than the national average.

According to the latest data from Stats New Zealand, the pay gaps for wāhine Māori and Pasifika women have actually increased compared to 2023, now at 15% and 17% respectively, compared to median hourly earnings of all men. When we look at unemployment rates (another measure of economic wellbeing), for wāhine Māori and Pacific women, they are nearly double the overall rate for women.

So, what can organisations do to address the gender and ethnic pay gaps? Is there anything we can actually tangibly contribute, or are the issues too deeply entrenched, too obscure to properly grasp and effect?

The first thing is sunlight, and lots of it.

Measurement and understanding of the pay gaps of organisations and industries is critical if we are going to make progress. Transparency is also key, because what gets measured and shared gets actioned and stays in our focus. We need to be able to hold ourselves and each other accountable.

While a number of New Zealand’s organisations are already measuring and reporting their gender pay gaps – such as the Champions for Change who have all committed to do so publicly and are now driving industry-level initiatives such as the electricity sector – there are still some where this has not seen the light of day.

Yes, we need big ideas and broader initiatives to fully crack this, but measurement and understanding is a critical component.

Nicola Grigg, Associate Minister for Agriculture and Minister for Women.

Last month, Minister for Women Nicola Grigg announced the launch of the Government’s gender pay gap toolkit.

A universal measurement tool and supporting suite of resources that gives all New Zealand businesses a practical way to measure, understand and then take action on their gender pay gap.

While some level of human resource of course is required to put the toolkit into practice, the offering now provides an accessible pathway for organisations of every size and sector to start making their own progress on this issue.

A number of countries in the OECD have already chosen to mandate gender pay gap reporting within the private sector.

More than half have made it a requirement and are seeing positive movement on their gender pay gaps as a result. While we in New Zealand are not there yet, this new voluntary framework is certainly a positive first step in the right direction.

An opportunity for like-minded organisations to join a coalition of the willing and make the final push to close the gap once and for all. Or arguably, be left behind.

When it comes to the gender pay gap, 8.2% might feel easy to brush aside or explain away, but in any other context, an 8% deficit or a rate increase of this level would cause an uproar.

That 8% matters. Not just to women, but to all of us in Aotearoa.

Because it’s not just a women’s issue. It’s an economic prosperity issue.

Not just a matter of fairness, but also a strategic imperative for progress in New Zealand.