The Ministry for Women commissioned a 2017 report focusing on the Gender Pay Gap, which estimates an earnings gap of around 12% between men and women. This works out that the average woman is getting paid 84 cents for every dollar the average man makes.

This study was released to the media, with the NZ Herald running with the rather misleading headline ‘Sexism driving gender pay gap – study‘.

“To put it simply, our research suggests sexism is likely to be a major driver of the gender wage gap,” says Dr Isabelle Sin, of Motu Economic and Public Policy. Photo / Stephen A’Court

Dr Isabelle Sin, of Wellington institute Motu Economic and Public Policy said, “To put it simply, our research suggests sexism is likely to be a major driver of the gender wage gap.”

However, in their own report they admitted 80% of the gender pay gap is attributed to “unexplained” factors:

‘The unexplained residual can encompass any unobserved differences in characteristics or preferences between males and females as well as discrimination against females in the labour market. Therefore, the “unexplained” cannot be unproblematically equated with the extent of the labour market discrimination against females.’

While unconscious bias and gender discrimination are no doubt two of the smaller contributing factors to the gender pay gap, how can Dr Sin claim sexism is the major driver of the 80% “unexplained” difference with little to no evidence in support?

Stats NZ used their own data to compare the difference in median hourly earnings between men and women and found the gender pay gap to be 9.2% in the June 2018 quarter, down nearly 40% since 1998. Labour market manager Sean Broughton said:

“The gender pay gap is a useful measure when trying to understand differences in pay between men and women, due to its simplicity. But this measure is limited. It doesn’t account for men and women doing different jobs or working different hours. It also doesn’t account for personal characteristics that can influence pay, such as qualifications and age.”

With that in mind, let’s look into a few of these factors which are contributing to the gender pay gap.

1. Women on average tend to work lower paid careers such as nursing, teaching, retail and social work, while men tend to work higher paying careers in science, technology, engineering and mathematics (STEM).

Research by Sylvia Dixon (2000) on New Zealand’s gender pay gap estimated that differences in occupational and industrial distribution between men and women accounted for 20 to 40 percent of the total gender pay gap.

2. Women are far more likely to take time out of their career to raise children than men.

A recent study from Denmark, a country considered by many to have some of the strongest social policies in the world and which has a gender pay gap higher than ours at 15%, found childbearing accounted for up to 80% of their gender pay gap.

Childless women have earnings quite similar to men’s earnings, while mothers experience a significant wage gap.

“The unexplained gap in traditional decomposition analyses is often labeled “discrimination”, but our analysis highlights that the unexplained gap is largely due to children.”

“What our evidence shows is that a lot of gender inequality is associated with choices that suggest different preferences,” Kleven says. “The holy grail is understanding whether those preferences are social norms, or something more intrinsic.”

3. Women returning to work after having children tend to work flexible and part-time hours around the children’s schedule.

Research by Claudia Goldin (2014), a well respected Harvard Economics professor, argues that ‘flexibility’ comes at great cost:

“Quite simply the gap exists because hours of work in many occupations are worth more when given at particular moments and when the hours are more continuous. That is, in many occupations earnings have a nonlinear relationship with respect to hours. A flexible schedule often comes at a high price, particularly in the corporate, financial, and legal world.”

4. Personality traits affect career preferences and the ability to negotiate higher pay

Agreeableness is one of the five personality traits of the Big Five personality theory, and is one which women are on average higher in than men. This negatively affects the ability to negotiate for higher pay compared to men who are lower in agreeableness.

Clinical psychologist Jordan B. Peterson explains this best in an interview with Cathy Newman which now has over 11 million views.

What is obvious is that there are a large range of factors contributing to the gender pay gap, most of which are hard to analyse when comparing data across a population. The other stand out point is that most of the difference comes down to choice. Choices such as which degree to study, which career path to follow, which position to work, how many hours to work each week and whether or not to raise children.

Unconscious bias and gender discrimination definitely are factors contributing to the gender pay gap, but to claim the 80% unexplained is mainly due to sexism as Dr Sin has done is intellectually dishonest.

The most interesting point in this whole debate is how Minister for Women, Julie Anne Genter, has publicly said we need to close the gender pay gap, while her own Ministry has a 5.6% gender pay gap in favour of women. Like most circumstances, it is far more likely the contributing factors to this pay gap in favour of women are position, education and hours worked per week, rather than sexist discrimination.

When it comes to possibly the largest single contributor to the pay gap, raising children, there is a large cultural shift currently underway in New Zealand. The most powerful woman in New Zealand, our Prime Minister Jacinda Ardern, and her partner Clarke Gayford among many others are helping normalise men being stay at home fathers. This takes time, and already we are moving fast. As they are finding in Denmark though, to do this effectively there needs to be more direct encouragement for men to take paid parental leave.

A more complex but arguably just as important issue that very few people are discussing is the lack of financial reward and prestige we place on caring careers such as teaching and nursing when compared to those in finance, law and the STEM fields. We must start valuing careers based on their relative contribution to a healthy and thriving society in our capitalist economic system. In New Zealand, initial steps are being taken to address these issues by the current government with increasing numbers of pay settlements, but there is a lot of work to still be done.

In conclusion, there are a large range of variable contributing factors to the gender pay gap, most of which come down to individual choices driven by personality traits rather than discrimination. However, there is still much work to be done to find out what is behind the 83% “unexplained” gap.

Along the journey we must also be weary of the ideological driven agendas currently leading this gender pay gap conversation.

 

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Wake Up NZ is a team of dedicated truth-seekers from all over New Zealand. We are committed to disseminating information that the mainstream media fails to bring to you.

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