Fair Pay in New Zealand
There are only a small number of Covid-19 cases in New Zealand, the small island nation in the south-west Pacific and home to more sheep than people. That’s not the only thing that’s small right now, as the gender pay gap is also comparatively small. But why is it that despite the rainforests and palm beaches, conditions are more like Scandinavia?
New Zealand is a pioneer: in equality matters this colonial state was the very first to introduce women’s suffrage back in 1893 – 13 years before Finland, which was the first European country to introduce it. Another few decades went by before the first woman was elected to the New Zealand parliament – but since the parliamentary elections in 2017, the proportion of women in government has been a respectable 38%, and the country is now led by women. As the head of state, the Queen is represented by Governor-General Patsy Reddy and the government itself has a woman at the helm: Prime Minister Jacinda Ardern.
Ardern, who at 37 when she took office was the second youngest female head of government, is making headlines at the moment as she guides her country through the Covid-19 crisis with confidence and assurance. After an initial surge in infections, Ardern decided on an early and radical lockdown for all 5 million New Zealanders. This slowed the spread of the virus to the extent that it was all but eliminated: no new infections have been reported since the beginning of May.
A right to Equal Pay since 1960
In matters of fair pay, New Zealand’s approach has also long been more decisive than that of many other countries. In the public sector, the Government Service Equal Pay Act has ensured equal pay since 1960, and equal pay has been enshrined in law for everyone else since the Equal Pay Act in 1972.
It was on this legal basis that office workers from the New Zealand Clerical Workers’ Union took legal action in 1986 to have their pay equalised. Office-based workers were earning considerably less than the construction workers employed by the same employer, even though they claimed the activities they undertook were of equal value. According to their argument, the lower pay was attributable solely to the fact that it was predominantly women who were employed in the offices, (90% female staff), whereas it was mainly men who were working in construction. The equal pay action failed, since the 1972 law related to equal pay for the same work, but not for work of equal value. However, as a result of the court case, the Department of Labour commissioned a study that examined comparability and created a new basis for comparison.
So in 2013, when a female employee working in a care home sued for higher pay because she attributed the lower wages paid to those caring for the elderly to the fact that it was predominantly women doing that work, it was possible to demonstrate the systematic discrimination, and the court ruled in favour of the claimant. As a consequence, trade unions and the government announced their intention to create pay equality for all 55,000 people employed in caring for the elderly and the disabled, and to equalise hourly wages.
In order to achieve equal pay for all employees, in 2018 New Zealand’s trade unions, employers and the government once again met to draft a new law. The Equal Pay Amendment Bill is intended to curb gender-specific wage discrimination in sectors where women predominate and was passed in August 2020.
Transparency becomes obligatory
But as in other immigration countries, the gender pay gap does vary according to ethnic origin: women of European origin earn more than those of Asian origin, or Maori women. Since New Zealand’s businesses have so far not been compelled to publish their pay gaps, the differences in pay remain largely invisible. For that reason, the national Human Rights Commission launched the so-called Demand Pay Transparency Petition, which is intended to close the gender and ethnic pay gaps. To this end, companies with over 100 employees will be required to report on internal pay differences and the distribution of women and men across the various levels of hierarchy, and an independent Equal Pay Commission will monitor compliance with transparency obligations and the implementation of equal pay in companies.
Leading by example
Even without the new law and its statutory transparency requirements, New Zealand has been able to halve the pay gap since 1998: in 2018, the median gender pay gap stood at 9.3%. In the Global Gender Gap Report, New Zealand is in 6th place, after the fair pay world champion Iceland and the Scandinavian front runners Norway, Sweden and Finland.
The fact that it has not yet been possible to close the gap is down to a lack of transparency in pay structures, but also due to outdated role models - even in New Zealand. After starting families, women still often stay at home, with all the consequences for women’s participation in the labour market in general, and for those on lower incomes in particular. But Prime Minister Ardern is doing far more than simply issuing clear messages to consign the clichés of yesteryear to the depths of the South Pacific Ocean; she has a different way of doing things. As one of just a few female heads of government, she's actually had a baby during her term of office. And that certainly didn’t stop her from governing – unlike most men in office. So she didn’t think twice about travelling to New York, to attend the UN General Assembly accompanied by her young family. And in the Covid-19 crisis, this working mother is setting an example in yet another way: in order to show solidarity with all New Zealanders, she automatically cut her own salary and those of her colleagues in government.
FPI - What we do
Why does the gender pay gap prove so intractable? What is standing in the way of fair pay for all? What do companies need to do in order to put sustainable pay strategies into practice?
Knowing about the pay gap and being willing to rid the world of the unjust state of affairs are evidently not enough to actually ensure fair pay. It is right here ...