Editorial: Pay data transparency needs careful consideration

Ms. Monopoly, launched in 2019, incorporated the gender pay gap into the classic board game. Photo / Hasbro, File

Editorial

EDITORIAL

Employers face compulsory public reporting on pay data, in an attempt to close the gap between men and women and different ethnic groups.

Initially, with robust constraints in place to protect individual privacy, this would appear a good thing. Wage disparities due to bias and discrimination must be addressed.

Mind The Gap lobbyists point to a gender pay gap in New Zealand which has doggedly remained at 9 to 10 per cent - to the disdvantage of women - for the past decade.

It's claimed about a fifth of the difference can be explained by education, occupation choice, age, type of work and family responsibilities. The rest of the disparity, says Mind The Gap, is bias and discrimination.

It is not just women feeling the pinch. Treasury in 2018 estimated Māori were receiving just 82 per cent of what Pakeha counterparts were pocketing.

Wage transparency isn't new or experimental. Australian companies have been reporting this information annually to the Workplace Gender Equality Agency since 2012.

But does it work?

In Australia, women still have to work an extra 61 days to earn the same as the average man. The Sydney Morning Herald recently reported gender pay gap for full-time employees in Australia is 14.2 per cent, only marginally better than at the turn of the century, and 30 per cent for all employees.

As a result, there are calls across the Ditch to mandate companies to further report on progress being made to close the gap.

The NY Times reported in July last year on the results from Buffer, a fully remote social media company, which published every employee's salary online in 2013. Buffer's gender wage gap continued to grow. In 2015, it was around 4 per cent; by 2018 it was inching above 9 per cent, and by 2019 it hit 15 per cent.

Reports in other countries have been more mixed. Denmark has required companies with more than 35 employees to report on their gender wage gaps since 2006. A study examining the short-term effects found reduced the gap by 7 per cent. The trend has since flat-lined however, particularly so in the private sector.

It does appear from international experience that publishing wage data jolts inequities but isn't a silver bullet. What then does the practice do, for the extra compliance on business?

Knowing how much a firm pays its male, or female - or female Maori, for that matter - employees does not change those wages. Most chief executives will already have this information and have decided how much, if at all, it should change.

Wage gap transparency is a step in the right direction, but only a small one and - in some cases, it would seem - only temporary.

That Australia still has a gap 5 per cent higher than New Zealand after 10 years with pay transparency laws should give our legislators pause for thought.

Chasms in pay equity when employee skillsets and responsibilities align are invidious and should be closed, but compulsory public reporting of pay data isn't the quick fix.