Surprise! New Study Finds the NZ Pay Gap Mostly Caused By Sexism

Science finally tells women what we've known all along.

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28 August 2017, 10:16pm

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"Ever consider men get paid more because they do better work?"

Earlier this week Hillary Barry read this tidbit out on the Breakfast show, from a commenter discussing the show's coverage of the Hollywood pay gap.

Altogether, the all-male top ten actors earned almost triple the combined earnings of the top ten women."Ponder that, ladies!" she said. "New Zealand women earn 12 percent less because they're just a bit rubbish at their jobs!"

But it's a question that floats around conversations on the gender pay gap like a bad smell: maybe men earn more because they're just… better? Harder working, more efficient, taking less time off. New research designed to account for the 'why' of the wage gap tells us that's not the case. Differences in the kinds of industries women go into and their ability to negotiate accounted for less than a fifth of the discrepancy, meaning a whopping 80 percent of the pay gap is down to "unexplained differences"—or, as the researchers put it, "pure sexism".

As of 2016, New Zealand's Ministry for Women puts the gender pay gap at 12 percent, meaning women on average earn 88 cents for every dollar made by men.

Causes for the gap have previously been hard to pin down, with many attributing it to women choosing lower-paying careers, or because women are more likely to work part-time, or—in the realm of internet commenters—because women simply aren't as bright or aren't working hard enough.

The study of NZ pay data between 2001 and 2011, conducted by Motu Economic and Public Policy Research has for the first time addressed all of these points at once. The researchers found that women were "statistically indistinguishable from men in terms of productivity," but earned, on average, only 84 cents for every dollar their male colleagues did. Unlike most studies, the Motu researchers didn't look at education or age when judging the value or productivity of women employees.

"We looked directly at how the output of similar firms varies with the gender mix of the employees, and used this to infer the relative value male and female employees add to their firms," said one of the researchers, Dr Isabelle Sin. This is the first time a study has measured productivity in this way, and is the first time the researchers have been able to confirm what women have known for a long time.

"To put it simply, our research suggests sexism is likely to be a major driver of the gender wage gap," said Sin.

And the more experienced you are, the higher the wage gap.

"We found no evidence of a gender wage-productivity gap for young women, a 16 percent gap for women aged 25-39, a 21 percent gap for those aged 40-54 and a 49 percent gap for older women."

Some industries were particularly bad, especially in sectors with little to no competition, like rail.

The Motu study went further, looking at how much women's pay could be linked to their choice of career, and their ability to bargain for wages and pay rises. It found seven percent of the pay gap could be explained by women choosing less lucrative industries such as hospitality. "If you add in the fact that women also tend to work in low-paying firms, we can say that 12 percent of the overall gender wage gap is due to the particular industries and firms where women work," said Sin.

That means less than a fifth of the gender pay gap can be explained by career choices women make.

As to the suggestion read by Barry on the Breakfast show, the Motu study found that productivity differences accounted for "at most" two percent of the gap.

The study concludes that 80 percent of the pay gap was caused by "unexplained differences".

In other words, even considering career choices and productivity differences, women in the same industry doing the same work were paid 84 cents for work which would have earned their male colleagues one dollar. The reason they earn less is "pure sexism."

In other news, water is wet.