Pay gap reporting could net larger wages for low paid

Lower paid employees could get a pay hike of as much as $1700 a year if businesses start reporting their pay gap according to a new study. 

Analysis applying what the impact of pay gap reporting has been in other countries to New Zealand showed that a woman earning the current median wage ($26.37) could receive $12.80 - $35.77 a week more.

The report from the MindTheGap campaign analyses public pay gap reporting impacts in seven countries and shows mandatory reporting can reduce gender pay gaps by between 20-40 percent.   

MindTheGap co-founder Jo Cribb says the international analysis showed that where pay gap reporting became mandatory, men and women’s wage growth was brought into line while more women were hired and promoted within companies. 

She says it’s time for New Zealand businesses to step up and start acknowledging and registering their pay gaps. 

“What this analysis found is that a substantial amount of the current pay gap is related to employer behaviour. The national pay gap has sat at around nine percent for well over ten years.  For this to decrease, business leaders need to address the gaps in their own organisations.”

Dr Cribb says while an increase of up to $35 may not sound like a lot, it could make a difference to the lives of low paid employees. 

“$35 dollars a week is an extra eight loaves of bread, or five dozen eggs or another twelve litres of petrol.  That could make a difference in many lives.  We literally can’t afford to waste any more time addressing this issue.”  

Dr Cribb says businesses should also be aware that pay gap reporting could have a wider impact on their company.  

“Increasingly, consumers are making spending decisions based on pay gap data reporting.   Women are also more likely to apply for jobs with companies with lower pay gaps.”

There is also widespread public support for pay gap reporting. A poll shows that more than half of New Zealanders (58%) believe that large businesses should be required to share any pay gaps regularly and publicly. (women 62%, men 54%).   A similar amount said they were concerned about large pay gaps and 68% agreed large businesses should be required to make pay gaps known to job candidates. 

Mind the Gap is calling for the Government to work with businesses to agree on a standardised approach to reporting and introduce pay gap reporting legislation with urgency.   Mandatory reporting is already in place for the New Zealand public service. 

So far 55 out of an estimated 5000 companies with more than 50 employees are reporting their gender pay gaps on The MindTheGap campaign’s Public Pay Gap Registry. Seven of those are also reporting their Māori pay gap and their Pasifika pay gap. 

Read the full report

About MindTheGap

MindTheGap is an alliance campaign backed by the Clare Foundation. The MindTheGap group believes that pay gaps for Māori, for Pacific peoples, for gender, disability communities and other ethnicities shouldn’t exist in Aotearoa NZ. And its registry aims to normalise pay gap reporting so that everyone is paid fairly for their work. 

The founders of the campaign are Jo Cribb and Dellwyn Stuart. More than 20 allied organisations stand with MindTheGap in support of the Pay Gap Registry and new legislation.