Last week鈥檚 move by the government to amend pay equity laws, using parliamentary urgency to rush the reforms through, caught opposition parties and New Zealanders off guard.
Protests against the have , driven to some extent by disappointment that an apparent political consensus on the issue has broken down.
In 2017, the National-led government passed a forerunner to the current legislation for the health sector only, the . Later, in opposition, National also the Labour government鈥檚 Equal Pay Act in 2018, as well as the Equal Pay Amendment Act in 2020.
That legislation was designed to extend a pay equity process to all occupations and create a clearer pathway for making pay equity claims. With both major parties seemingly aligned, some 33 pay equity claims were under way.
Those claims 鈥� 鈥� involve the education, health and social services sectors. As such, the government would have to meet the costs of successful claims.
This explains why one rationale for the law change has been that the claims were . The other rationale (preferred by Finance Minister Nicola Willis and Workplace Relations Minister Brooke van Velden) is that the in determining the validity of some claims.
In reality, both the cost and the policy framework allowing equity claims to proceed are interrelated: the more permissive the framework, the higher the potential cost to the government and employers.
But while equal pay for equal work is the goal, it鈥檚 important to understand that equal pay and pay equity are not the same thing.
Equal pay is about making sure men and women are paid at the same rate in a specific occupation.
Pay equity, on the other hand, involves a more complex process. It aims to between famale-dominated industries and other sectors using specific criteria. And herein lies the core of the argument.
Comparing different work sectors
According to van Velden, the framework for comparing different kinds of work was too loose, or simply not realistic:
You have librarians who鈥檝e been comparing themselves to transport engineers. We have admin and clerical staff [鈥 comparing themselves to mechanical engineers. We don鈥檛 believe we have that setting right.
On the surface, this may seem logical. And previous provided to the government suggests the recent law change will move New Zealand鈥檚 framework into line with other countries.
But using a between types of work in different industries or sectors remains central to any pay equity claim.
That鈥檚 because pay equity seeks to make visible and fix the deep, structural inequalities that have historically seen women鈥檚 work undervalued compared to men鈥檚 work. It鈥檚 about ensuring jobs that are are paid similarly, as a way to achieve gender equality.
Women鈥檚 employment is still concentrated in lower-paying industries and occupations, so comparisons have to be made with other sectors.
The factors used to measure that relativity are known as 鈥渃omparators鈥�. Rather than using tools developed and tested under the previous legislation, the 鈥渁 hierarchy of comparators鈥�, with a preference for comparators to be chosen within the same industry or occupation making the pay equity claim.
Comparators are selected to help compare the nature of different kinds of work in male-dominated and female-dominated industries. This is based on an assessment of skills, experience and qualifications, level of responsibilities, types of working conditions and degree of effort.
The assessment is completed through with workers in comparison occupations. It uses resources such as Employment New Zealand鈥檚 to of those comparators.
Different kinds of cost
The subjective nature of valuing different kinds of work is part of the problem, of course. But only part of the gender pay gap can be attributed to objectively measurable pay differences within specific industries. Pay equity is about addressing both the objective and subjective elements contributing to that gap.
We鈥檒l need to carefully monitor the new system to see whether its narrower comparator requirements affect its capacity to close the gender pay gap.
Treasury鈥檚 concerns also need to be considered. The former budget allocation of NZ$17 billion over four years suggests the costs of settling pay equity claims may be considerable.
On the other hand, they may be bearable. Last year in the United Kingdom, for example, Birmingham City Council was effectively bankrupt and . In the end, the costs were not as high as initially anticipated.
Finally, focusing exclusively on reducing fiscal cost risks other costs rising instead. Women who are paid less than they should be will struggle to put food on the table, pay back student loans, get onto the property ladder, contribute to Kiwisaver and afford their retirement.
Without pay equity, in other words, there is less economic activity in general.
, Lecturer, Sociology, Social Policy and Criminology, ; , Senior Lecture in Sociology and Social Policy, , and , Senior Lecturer in Human Resource Management,
This article is republished from under a Creative Commons license. Read the .
