The gender pay gap is a high level indicator of the difference between women and men’s earnings. The gender pay gap compares the median hourly earnings of women and men in full and part-time work.
In 2014, there was a gender pay gap of 9.9 percent.
Since the late 1990s the gender pay gap has been steadily reducing (see the table below).
Gender pay gap
Source: Statistics New Zealand: New Zealand Income Survey
Why is there a gender pay gap?
The causes of the gender pay gap include:
- occupational segregation (the clustering of female and male workers in particular occupations e.g. nursing, and similarly at the industry level e.g. health care and social assistance). Female-dominated occupations tend to be lower paid than those dominated by men. Vertical segregation is also a cause (where there are a higher proportion of men than women in senior better-paid positions).
- different patterns of participation in the paid workforce, principally because women spend a greater proportion of their time on unpaid and caring work than men. Women spend less overall time in the workforce than men (a combination of time outside the workforce and part-time work). The accessibility of well-paid part-time or otherwise flexible work arrangements is one issue: part-time work is paid less than full-time work on average. When women return to the paid workforce from career breaks, they may not be able to access flexible work at the level of role they previously held.
- unconscious bias (stereotypical views about gender that can negatively influence decisions about recruitment and career progression of women in the workforce).
Previous New Zealand research (from 2000) found that most of the gender pay gap (between 40 and 80 percent) could be ‘explained’ by differences in four variables: differences in occupation and industry of employment, differences in the amount of work experience between women and men, and women’s qualifications relative to men. The remainder was ‘unexplained’, which is commonly thought to include some level of discrimination that works against women.
However, the ‘explained’ portion of the gender pay gap can also be influenced by societal expectations of women, including that women will be the primary care-givers in families, and the appropriateness of different types of work for women and men.
Given the range of causes, there is no one solution to the gender pay gap. Addressing the causes of the gender pay gap requires sustained action over time, including at the level of societal expectations for women and men. This requires collective action from a range of participants including workers, employers, careers advisers, business leaders and employee groups and the government.
Measuring the gender pay gap
There are different methods of measuring the gender pay gap. One measure is to compare the mean hourly earnings of women and men in full and part-time work rather than the median. The gender pay gap can also be measured by average weekly earnings.
Another related measure is the gender wage gap used by the OECD, which compares the median hourly earnings of women and men in full-time work only. Using this measure, New Zealand’s gender wage gap is currently the lowest in the OECD at 5.6 percent.
The Ministry for Women measures the gender pay gap using the median hourly earnings of women and men in full and part-time work because:
- hourly earnings allow for the comparison of pay for the same fixed period of work, whereas women and men work different amounts of time over a week (approximately one third of women work 30 hours or less). Fluctuations in the hours worked between men and women can alter a weekly earnings measure without any underlying changes in hourly pay.
- the median is less likely to be skewed by very high wages and so better represents the differences between a typical female and male employee.
- Statistics New Zealand also favours using the median hourly earnings of women and men in full and part-time work, and explains its reasons for doing so here.
- Regardless of how the gender pay gap is measured, a gap remains between the earnings of women and men. The gender pay gap, combined with differences in work patterns between women and men, leads to significant differences in outcomes: in 2014, women earned $300 less per week than men and had lower lifetime incomes compared to men.
The overall gender pay gap can also mask important differences in outcomes for groups of women. For instance, Māori and Pacific women have lower rates of pay compared to both women and men of other ethnicities.