By David Chaston
We recently highlighted the rising share wages are as a proportion of national income (GDP).
There has been a clear improvement since 2000 with a brief hesitation during the height of the GFC.
Chart 1
We also showed that rising participation rates are likely to be behind the shift. And it is the female participation in the workforce that is driving that.
Chart 2
In other words, more women in the workforce is helping driving our rise in GDP, but that may be restraining our rise in per capita GDP.
We also know that women are on average paid much less than men. In fact, the difference is embarrassingly large even if it isn't getting larger. In a $284 billion economy, women appear to be paid $25.5 bln less than men.
In other words, if the average pay was the same, our economy would be 9% larger, ignoring the multiplier effects - and likely very much larger with the normal multiplier impacts.
That $25.5 bln is after equalising the unemployment differences between men and women, equalising the participation rate, and equalising the population differences. On a raw basis, and not equalising for those factors, the difference is $31.9 bln.
| as at Dec 2017 | Men | Women | Women | Women | Women | Women | |
| actual | actual | at male popn | at male PR | at male UR | at male pay | ||
| Working age | 1,877,400 | 1,965,800 | 1,877,400 | 1,877,400 | 1,877,400 | 1,877,400 | |
| Labour force | 1,439,400 | 1,301,200 | 1,242,686 | 1,439,400 | 1,439,400 | 1,439,400 | |
| Participation rate | 76.7% | 66.2% | 66.2% | 76.7% | 76.7% | 76.7% | |
| Unemployed | 57,700 | 63,400 | 60,549 | 70,134 | 57,700 | 57,700 | |
| Employed | 1,381,700 | 1,237,800 | 1,182,137 | 1,369,266 | 1,381,700 | 1,381,700 | |
| Average weekly wage $* | $1208.05 | $853.32 | $853.32 | $853.32 | $853.32 | $1208.05 | |
| Total pay in NZ$ bln pa | $86.796 | $54.924 | $52.455 | $60.758 | $61,310 | $86.796 | |
| Difference NZ$ bln | $31.9 | ( $2.5 ) | $8.3 | $0.6 | $25.5 | ||
| cumulative | ( $2.5 ) | $5.8 | $6.4 | $31.9 | |||
* These are the actual averages, mixing part-time and full-time work. The full-time equivalent pay averages are $1285.74 for men and $1047.46 for women.
Participation data is available back to 1986, which allows us to track the experience of various generations over time. For those currently nearing retirement, women made modest gains in participation, and from ages 35 to 50 they won a larger share of employment even as men lost share.The differences are very large, but they are getting smaller. And the improvement is happening relatively quickly.
Chart 3
For those entering the workforce in 1987, the differences are also unacceptably large, but they are closing even faster.
Chart 4
The best way to see this improvement is to the 35-49 cohorts, which are the only common ones in the two sets.
Chart 5
The one thing Chart 4 shows is that women are now participating in the workforce at 'only' 11% less than men at age 45-49 and that is now the closest they have ever been. But in the years leading up to that age, when authority and responsibility peak, they still lag men by over 20%. This is the time when work experience builds and managerial reputations are won.
But even so, with participation rates well over 70% (which is far higher than such rates in Australia, the USA and Europe during those ages) there seems little justification for using participation as a reason why there is not a sufficient talent pool from which to choose.
An important variable not considered here is the nature of the work being done. We will leave that analysis for another day; it is fraught enough for a man to analyse this data and suggest what it means, especially as the data does appear to show reasonably rapid generational improvement.
One data item mentioned above is that the pay differences are closing "relatively quickly". On a full average basis, they have closed from 63% in 1995 to 71.3% today. On a full-time equivalent basis they have closed from 73.7% to 81.4% today over the same period.
But the brutal fact is that "relatively quickly" is nowhere near fast enough. At this rate of improvement, women are going to have to wait until 2070 for equality on this basis.
That is clearly an unreasonably long wait. We need to speed the process somehow, even if some adjustments need to be taken into account for lower participation rates, and fractured experience and job development progress during the ages from 25-40.
62 Comments
“An important variable not considered here is the nature of the work being done.” When all those other important variables are added in the gender wage gap doesn’t exist. How can you draw any conclusion if you ignore important variables?
it’s a touchy subject, but I get the feeling we pretty much have pay parity in NZ at the moment. That doesn’t mean that men and women will get paid the same amount on average especially considering a lot of women with children choose not to advance their career as much as they might without children. Also a lot of the more highly paid jobs tend to be in engineering and trades which is male dominated, while a lot of low paid jobs are in the care industry which is female dominated.
I’m not by any means saying sexism doesn’t exist - and it happens both ways. But as far as I’ve seen, a woman will usually get paid the same amount as a man if they do the exact same job at the exact same standard.
Unfortunately that is often not the case that women who are in equal or more advanced roles will be paid less to male counterparts, even in the same company , (which occurs for many cases in NZ). Especially in technical roles (with increasing discrimination to hiring women as they get older). Hence there is a lot of added pressure for a woman to get a secure role that she can hold for a longer period later on, (ageism being rife). But hey a woman is lucky to even get an interview in engineering and trades. Many employers think children will just magically drop into in an employee's lap in a year regardless of the plans & character of the person, (many recruiters will openly state direction given by employers to align with this bias). With higher chances for discrimination many are discouraged from even choosing career paths flying in the storms of shit that those industries often generate. Not to mention the shameful tech giant ads (like the IBM's hack a hairdryer campaign or Google's ad mentioning women can use a daycare while working instead of talking about any qualities of the work itself). Really it would be refreshing to see companies that focus more on projects & getting things done than employees who waste so much time on politicking, and enforcing superiority & work harassment. Seriously there are no girls on the internet, TOGTFO.
Well this has the potential to be an interesting comment thread...
For a humorous look at the pay gap and reasons behind it - https://m.youtube.com/watch?v=J7GWHgVZJQU
On a serious note, is the pay gap worth looking at with the provided context in the article? As David mentioned “An important variable not considered here is the nature of the work being done.” There are so many factors as to why this pay gap exists, without touching on them all it’s hard to developed a balanced view and often leads a lot of people to come to very surface level conclusions.
It also seems the article is written with equality of outcome being desirable - “But the brutal fact is that "relatively quickly" is nowhere near fast enough. At this rate of improvement, women are going to have to wait until 2070 for equality on this basis.“ Equality of opportunity (in my opinion) should be the only desirable “equality” for a fair and free society.
Also https://www.youtube.com/watch?v=51-hepLP8J4 is a good one, esp since the did you scream, (even when incapacitated), bit is one which has brought down cases for many actual victims of physical attacks.
Probably the most famous interview on the pay gap. https://youtu.be/aMcjxSThD54
But you don't want to imply that men have it easy, many many men go to work and struggle with boredom, the physical demands of low paid jobs and the mental anguish of office politics, along with the worry and stress of trying to support their family.
Many men who do make it, have done it after years of struggle. My eldest daughter learned a profession got very well paid, had a baby at 29 and decided she could live on her husbands wage and be a full time mum.
My wife's sister was an oncologist, gave up in her late 40's to look after her family of four. My wife's cousin was a Gp but she too gave up, this time in her 30's, to become a full time mum.
Women and men make different choices.
http://www.interlude.hk/front/philip-glass-composer-taxi-driver/
Quite a few men have discovered that they can live off their well paid wife's income. Ordinarily they would be drifters moving from one low paid job to the next. often made redundant or even fired however with the emancipation of women and the sexual revolution all sorts of opportunities have opened up for the charming man. He can live the life of an artist or a musician, full time student or just generally be a lazy alcoholic, stoner, bum, these things not being necessarily exclusive.
Indeed if you are destined for greatness you really don't want a mundane job as that spoils the whole look and can be career destroying. No one is going to follow you if you were once an appliance repair man. Better to be a bit of a bum, living on the street, not giving anything to the man, resisting the mediocre life.
However, never have there been better opportunities for such men to find 'alternative' sources of income.
Anyway Zachary's advice for up and coming young men over for today. Got to get back to work.
Yeah for sure, watch this: https://www.youtube.com/watch?v=hU7AewaHr0Q
While I think equal pay for equal work is important I'm more worried about the wage stagnation in the overall economy at this time. It's quite possible we could reach parity but concede a generation or more of people may not experience a higher standard of living than their parents.
Those in the wage bracket above minimum wage saw the lowest growth in wages over a 20-year period, while wage growth in the lowest waged bracket matched that of the highest paid. https://www.stuff.co.nz/business/102812202/minimum-wage-hikes-hits-the-…
What do you expect when you import 3rd work wages? Restrict work visas to well paid immigrants. Makes little difference where they come from or what their qualifications or how many - if they command a big salary then they are not taking the low paid starter jobs from Kiwis and in terms of this article the women trying to re-enter the workforce. A typical part-time job suitable for a mother with children is in supermarkets, cleaning, petrol stations - these jobs have never been well paid but they are getting worse and worse because of international students willing to work for almost nothing.
This is where most people work - obviously get rid of gender inequality among lawyers and academics and journalists but that will hardly budge these statistics.
I'll give you a concrete example of how system creates gender pay gap.
Part-time teachers.
Most part-time teachers are women.
Part-time teachers are paid less per hour of teaching time than full time teachers. That is because full-time teachers are paid for non contact time whereas part-time teachers are expected to do non-contact time for free. A part-time teacher doing 15 hours contact - 3/4 of a full time 20 hour contact load - does not get paid 75% of the salary. It is more like 60%.
That is how you end up with a gender pay gap. The system takes advantage of women - usually mothers - who have to work part-time. They do the non-contact work for free.
No. Most full-time teachers are women. But almost all part-time teachers are women. That is why the PPTA is currently taking a pay equity case about this very issue. Why are they not paid the same hourly rate as the full-timers? If most part-time teachers had been men, I very much doubt they'd be on a lower hourly rate. But because there is this residual attitude of "well it's only a bit of pin money for mothers to get them out of the house" and "they have so much free time they can do their preparation in it without paying them for it" the attitude persists that part-time teachers shouldn't be paid pro rata.
While about 57 per cent of full-time teachers are women, 75 per cent of the part-time workforce is female.
The point is, if you want to explain the persistent gender pay gap in a supposedly gender-blind world of equal opportunity you have to start looking at how the cards are stacked against women through mechanisms like underpaying part-timers. The deliberate underpaying of all - men or women - part-time teachers is unfair. But the situation is tolerated because they are mostly women.
Let's keep focussed on the example you raised without generalising just yet. You argue that part-time teachers are getting underpaid. And you suggest that the reason is that 75% of them are women? How do you make that leap? You must have evidence that you are not sharing yet.
The contract is unfair to ALL part-timers. Who funnily enough happen to overwhelmingly be women. That's how gender pay inequity works. It's not bold and brazen in 2018. If it were that brazen, it would be clearly illegal and prosecuted under the Equal Pay Act.
The system claims it is gender blind. And on the surface it is. But the way it works ends up with male teachers getting more per hour of work than females ones - even though teaching bottom set Year 10 Science on Friday afternoon is equally taxing for both male and female teachers. Maybe the part time female teachers should stop the lesson 10 minutes early. After all, they're not being paid for the full hour. The year 10s would be happy.
You won't like this, but I believe underlying these institutional structures still lurks the old fashioned belief that women's work can be paid less than men's because women aren't true family breadwinners. They are working for a bit of pin money or for personal fulfillment alone.
Cool so before we get sidetracked, can I ask again how do you make that leap? You suggested above that the REASON that part-time teachers are underpaid is that they are 75% women. I just want to know how you make that leap. Surely your answer is not a sarcastic "funnily enough happen to overwhemingly be women"?
I am suggesting that to help close the gender pay gap in teaching you could simply pay ALL part-timers pro rata what full-timers get. You could remove the mechanism that somehow says an hour of contact done by a part-timer is worth less than an hour done by a full-timer.
That way everyone gets paid the same pittance for taking Year 10 Science on Friday period 6. Same arduous, usually thankless -sometimes dangerous - work, same pay. Everyone should be happy! Call it fairness to part-timers. I don't care. In the process it will help women.
What is so hard to understand about biases that are not consciously setting out to discriminate against women but end up doing so?
Ms Third Wave Feminst: "Mr Principal, how come Mr Jones gets $50 per hour for teaching 10B Science on an hour on Tuesdays and I only get $44 for teaching 10C Maths the same hour?"
Mr Principal: "Well Ms Third Wave Feminist, it is because you see he works full-time and you don't - if you chose to work full-time you could get paid $50 too."
Ms Third Wave Feminist: "But I can't work full-time because someone has to take the kids to after school classes and do all the laundry and call the plumber and organize Christmas gifts for the in-laws."
Mr Principal: "Well, Ms Third Wave Feminist, if you want to teach part-time I am afraid that's the deal. You do the same work, but you get paid less.It works out well, because the Ministry saves a lot on payroll"
Ms Third Wave Feminist: "Well, I could get another job".
Mr Principal: " Be my guest, but good luck with finding another part-time professional role in school hours."
Ms Third Wave Feminist: "I guess I kinda have no choice do I?"
Mr Principal: "Nup."
Wow, you impress me so much by answering your own question :O. Good job ;D
Again to recap of what people had been saying it comes down to life choices. If one wants to advance in his/her career then time for family will reduce or one get just get a partner to take care of family chores instead. Something got to give. If you cannot find a suitable partner to supplement you and vice versa then is best to still single and never start a family. After all family is about compromise of choices.
Or perhaps employers could pay equal pay for equal work and men could do a bit more housework to free women to work a bit more it they want to. Women have choices in theory but they are often coerced choices. In many cases it boils down to "you do the housework and look after the kids or we get a divorce cause I'm not doing more to support you to work more - I earn more so logically I get to choose." That's not a choice. I want less constrained choices for my daughter.
Boys, I am afraid the pay equity issue is not gonna die. The UK reporting this week on the gap has been eye opening and there is going to be changes. You can bicker and moan and drag your feet about it and spend hours watching Jordan Peterson videos about male lobster dominance or you can work towards a more family friendly workplace structure that allows both men and women to have more balanced lives, including men making school lunches. What's that tune I hear....."A change is gonna come...."
Make sure you show your comments to your daughters boys. Let them know where you stand on the issue.
Economist Thomas Sowell on the gender pay gap...
Systems that are supposedly gender blind do create gender pay gaps - like the part-time teacher example - by contriving to pay lower hourly rates to part time workers.
However, the main reason women don't progress in their careers or fail to choose high paying roles is cause men don't do enough housework and childcare. Women simply can't do both. So they opt out.
I am training my daughter to never shack up with a man who is not prepared to do his fair share of vacuuming, mold removal, homework supervision and toilet roll changing. The choice of a domestically productive partner - above all other things - will set her free and give her a better, less constrained professional life than her mother enjoys.
I challenge all Kiwi fathers to look at the way they treat their wives regarding boring housework and then look at their daughters and ask themselves if that is how they want their daughter to be treated by their future male partners.
Look, I can think of nothing more wonderful than the stereotypical meticulous, fastidious gay man as a husband. Someone who gets out the cotton buds to clean the grooves in the window frames and puts empty packets in the bin rather than leaving in pantry..... heaven.
Dearest B-Rocker I can indeed say yes and attest to the fact that I am a failed superwoman. I work part-time doing something that does not challenge me much and does not earn a salary commensurate with my education. Both caring for a family and doing the lion's share of domestic chores means I cannot pursue my career as my husband can. I tried to and failed. Someone has to tend the hearth and that is me. I have made that compromise. In some ways it is a free choice, in others a forced choice. In some ways it is liberating - I have an hour or so to myself each day to read about economics - in others it is stultifying, lonely and oppressive. Such is the contradictory experience of being a woman. On balance, I cope with the situation because it is better than destroying a family, but I hope for a better compromise between domestic and public life for my little daughter. This is partly about social structures (affordable childcare) and partly about male female personal relationships and how we bring up our young men to treat women once children enter relationships.
I suggest you also look up "mental load" on google.
Now... I have some washing to fold.
Thanks for sharing your situation (although the condescension is unnecessary "dearest" cs).
I am a full-time worker with a full-time working wife and a young child. We both share responsibilities at home.
All I can say is that you must have a gigantic house with at least 10 children to take care of. Of course, if you clean cracks in the window with a cotton bud in your gigantic house then I can see how this would take some time.
Maybe you should focus your teaching of your daughter on priorities.
I have a suggestion for you, which you will understand via your economics study. It's called specialisation. You should go out and find employment that challenges you, earning a wage that suits your level of education, and then pay for a cleaner to clean your gigantic house.
I applaud your decision to equally share all housework and caring with your full-time working wife. That is fantastic. All power to you. I salute you. You are exactly what women need.
Alas, statistics suggest that you are not yet the norm. Perhaps you will be for my daughter's generation.
Now I really must fold washing!!!!
I really don't get what cs is on about?? Why does it have to be men vs women in pay?? For all I know once you form a family all resources become shared resources and that includes income. What's wrong with one partner does part time and house work with less pay and that other goes full throttle in his/her career so the whole family gets a good income? If you cannot find a partner that supplement you no matter what role you do for the family then is your failure in spouse seeking. Is your life choice!!!
@cs. I believe that men and women should not be limited in their roles, in this case the domestic role and the career. It's ain't a given that the woman gets one and the man the other.
But we all make compromises as a result of the decisions we have made. Having kids means a couple has less money and less time. It's just a reality and nothing wrong with it. On balance I prefer having had the kids and the resulting demands on me. (somedays I have the reverse view, but that's also part of the human condition.)
Maybe your man is not a domestic Adonis, but that's a decision you made. And maybe because of pay inequality you got the short straw. That's wrong and should change.
As for gender roles ? I point out those mornings on skifield roads where the male (me) was the one who rolled in the mud and slush and ice and fought and struggled with the cursed chains and tyres. There was no question whose role that was, and I don't seek social change on it - nor even a 'couple negotiation'.
Agreed on the roles. Agreed on the compromises. Life is a compromise, full of tensions, full of ambiguities. Pay inequity does tend to make women working less the logical choice. This is a problem. The choice women make becomes a bit of a forced choice rather than one freely chosen.
Male female relationships vis a vis housework' tend to be very different pre and post children. The time off a woman takes on the birth of a child seems to cement her into the domestic realm and things from that point on aren't quite what she signed up for originally but are hard to change. Some women chose to divorce and go it alone. But that is a hard road these days especially. Once again, you have choices, but fraught ones. I admit that men do get assigned some nasty maintenance tasks. But, not to personally disparage your contribution to the skiing holiday - they tend to be rarer tasks - whereas the"female" ones like homework supervision or school lunches tend to be daily ones.
Represention policies of anykind are often some of the most sexist and racist policies ever made. But I know you two are taking the piss out of it ;). Good day and thank the goodness we did not go down the Canadian road. 50/50 in cabinet minister roles rather than who is most suitable for serving those roles. SO LOL.
Age 25 to 40 women are having families....how can that be speeded up. Why can't economists factor families into their statistics, they are so inhuman.
" We need to speed the process somehow, even if some adjustments need to be taken into account for lower participation rates, and fractured experience and job development progress during the ages from 25-40."
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