Bold new moves by the New Zealand stock exchange aim to back women at work. But are we getting enough out of our “skinny economy”?
Alasdair Thompson, bless him, might end up a pin-up boy for women’s rights in New Zealand. Since the day he blurted out something odd about women being paid less because of what he suggested were their monthly problems, the hoary old issue of the gender pay gap has gained an energetic new lease of life. Even Thompson’s sacking as head of Employers and Manufacturers Association Northern hasn’t doused the issue. The assumption women have equal opportunities in New Zealand – easy to make when we’ve already had two female prime ministers – is under fierce challenge.
Ironically, Thompson’s blurt is goading business and political leaders into faster action on gender equity. Change was already in the air, with influential male business leaders pushing the view that we need a rapid increase in the number of women in management and on boards, because businesses are missing out on valuable talent. But what’s new is now they seem ready to do something about it:
- All publicly listed companies will have to declare how many female directors and senior managers they have under a rule change the New Zealand stock exchange is to propose, potentially to take effect by June 2012.
- The Institute of Directors is to launch a mentoring programme for women in December aimed at increasing the number of women on boards of stock-exchange-listed companies. It will enlist up to 30 chairmen and senior directors of major companies to work with experienced and qualified women in a year-long programme to foster “board-ready” women.
- New Zealand’s economic output could rise 10% if women’s labour and talent were fully tapped, a report by Goldman Sachs has concluded. The financial services firm calls for a “closing” of female and male employment rates; women to be encouraged into non-traditional occupations; women to be given more incentives to stay in work; the availability of affordable childcare to be ensured; and women to be encouraged into leadership.
If Thompson was one goad for women’s rights, the other was the thought that Australia might steal a march on us. The Australian corporate sector is undergoing an unlikely metamorphosis – the percentage of female board members on that country’s 200 biggest listed companies has jumped 50% in a year and a half, and a third of all new directors appointed this year have been women.
All this action came after a stock exchange recommendation that every listed company establish a gender diversity policy and annually report on progress in meeting the policy’s objectives. As of the beginning of this month, 12.7% of Australia’s top-200 listed companies’ directors were women, compared with 9.3% in the top-100 listed companies here.
The proposed new rules for the New Zealand stock exchange will go out for consultation early next year as part of its biannual rules review process, then in draft form to the Financial Markets Authority, and finally to the Commerce Minister for sign-off, says chief executive Mark Weldon. New rules could be in force from June 2012.
“What we intend to seek feedback on is a proposal that would see companies required to report on or disclose the gender and other diversity make-up of board and management.”
The wording Weldon is proposing is tougher than Australia’s in several ways: reporting would be mandatory, and it would go beyond gender to look at diversity in general, including ethnic representation.
“We’re a very skinny economy, four-and-a-half million people. If we don’t create good pathways or accessible opportunities, or if we systematically exclude large parts of the population, whether women or immigrants, then we are both unduly limiting the size of the talent pool and unduly putting a handbrake on growth in a globalised economy, where diversity of views and experience is really valuable.”
The stock exchange moves are part of a global change in business thinking about the value of women, prompted in part by soul-searching in the wake of the global financial crisis.
Weldon says more diverse boards are better at responding to times of major change and upheaval, when blinkered thinking could be dangerous. “Those things are better dealt with by a challenging environment with many, many different viewpoints and questions. When you get groupthink you get a high degree of risk.”
A 2010 McKinsey study in the United States found that across all industry sectors, companies with the most women on their boards of directors strongly outperformed those with no women: return on equity was 41% up, and operating results were 56% better.
Is the new-found appreciation of women’s worth by male business leaders likely to turn around the persistent undervaluing of women’s work and contribution in New Zealand? Or will there remain a stubborn strand to the gender pay gap, because women who are mothers don’t always want to work the way men do?
New Zealand already has the third-lowest gender pay gap in the world, with a 13% difference between average male and female hourly rates. This gap is mostly a result of several big factors. One is the occupations women tend to go into. Many female-dominated jobs, such as caregiving, nursing and retail, have been historically poorly paid compared with male-dominated jobs with similar levels of skill and responsibility. Another is time taken out of the workforce to have children, with the loss of seniority that entails.
Women’s greater tendency to work part-time also plays a role, as those jobs are often seen as “mummy-track” jobs with stagnant pay and few promotion opportunities. Of women in the workforce in New Zealand, more than four out of 10 work part-time.
Internationally, researchers reckon that factors like these account for 50-80% of the gender pay gap. The other fifth to a half of depressed wages is unexplained, perhaps a result of discrimination, the career downgrading when women become mothers, or women’s lack of confidence in asking for promotion or a pay rise.
Some startling research out of America has confirmed that if they don’t have children, women can blitz men on earnings. Young single, childless women in big cities are earning at least 8% more than their male peers in 147 out of 150 US cities, according to a study last year. They were earning 20% more in Atlanta and Memphis, 17% more in New York City, and 12% more in LA.
London School of Economics sociologist Catherine Hakim says at least some of the gender pay gap is that many women choose not to push hard in their careers because status and high pay are not as attractive to them as they are to men. Instead of bargaining for more pay or promotions, women are often negotiating for flexible hours or part-time work.
Hakim says the big differences in pay are not between women and men, but between those who are hard-driving careerists and those who are looking for something else in life. Her research suggests women are much less likely than men to be careerists.
In Britain she found only 14% of the women saw work as their first priority, whereas 52% of men did. Most women (69%) valued both work and family, compared with 48% of men. Another 17% of women put family as their top priority. For men, that proportion was too small to measure. Similar results have been found in Germany, Spain, Belgium and the Czech Republic.
‘The people at the top of organisations will always be the careerist people,” says Hakim, citing Christine Lagarde, the former French finance minister and mother of two who has just been named the new head of the International Monetary Fund. “The kind of dedication that people like her give to their jobs – moving from Paris to Washington at the drop of a hat. Not many women in the world, as well as not many men, are going to be prepared to do that no matter how big a promotion.”
If Hakim is right, then mentoring programmes to put more women into management and governance roles will help, but only for those women interested in climbing the career ladder. They won’t do much to close the overall gender pay gap.
These important differences between the orientation of men and women to work explains why a generation of highly educated women have failed to close the pay gap, says Hakim. “The idea that access to university qualifications changes everything is just simply not the case, because preferences, family roles, children – all these things – count as much as they ever did and always will.”
The overall point she is making is that when women earn less, or don’t rise to the top, it isn’t always because they are victims. Often, they are doing what they want.
In New Zealand, in the fields of medicine, accountancy and law, women with plenty of choices are carving out different career paths to men. And that may not be all bad. Women are often constructing family-friendly jobs where there were none, and well-paid ones, too.
In medicine, women are over-represented in general practice and less likely than men to be specialists or surgeons, occupations that attract higher pay but demand longer hours. GP practices where female doctors work part-time are now common.
In law, the failure of women to storm the heights of the profession in big numbers is routinely seen as a defeat. But it is also a sign many working mothers are making intelligent choices not to be like their male colleagues, who sacrifice their closeness to their family to work punishing hours.
The proportion of judgeships held by women has stalled at about 25%, which Equal Employment Opportunities Commissioner Judy McGregor calls “a matter for profound regret”. But one of the unacknowledged reasons is that women are holding back.
Donna Buckingham, co-ordinator of the Women’s Forum of the New Zealand Law Society and an associate law professor at the University of Otago, says her impression is that some women who are eligible do not put themselves forward, and that others who are shoulder-tapped are deferring it until their children are older.
“If the job is Whanganui and you live in Dunedin, you have three children under 15 and your husband’s work is not transferable to Whanganui, then you’re going to say, ‘Not right now. I would not be a very good judge with these pressures at this point.’”
Of course, some women, in superhuman style, can do it all, making other working mothers feel like they aren’t trying hard enough. Buckingham sees exceptional young women in her classes. “Some of these women will happily go back to work three months after having a baby, hire a nanny, work the long hours, be 10 pounds lighter than before they were pregnant, will give amazing dinner parties and run at 90 miles an hour.”
Women like these are the exception, however. In teaching, for example, women seem diffident about the top jobs, despite their strength of numbers. Women make up about 60% of secondary school teachers, but just 30% of principals.
A 2003 research paper found some discrimination from boards of trustees, with some saying they wanted male principals as role models for pupils to even out the heavy representation of female teachers. But the author also found women were less likely to apply for principal positions than men, citing work-life balance reasons.
PPTA women’s officer Jane Benefield says women are less confident about going for principals’ jobs, and usually won’t apply until they are overqualified. Her impression is that women also see the job as unattractive, as having a heavy workload, and as being more difficult than men think it is.
University of Auckland sociology professor Maureen Baker says societal conditioning plays a big role in the choice not to go for the top.
“If you believe that it’s your job primarily to look after the children in the house, and if your mother, your mother-in-law and your husband reinforce that, after a while you’re going to say, ‘What’s most important to me is that my children are well cared for and that I have an interesting career, but I don’t care if I don’t get to the top.’ Your perceptions and ambitions are shaped by what is presented to you as a desirable female life.”
Baker believes outright discrimination is a much smaller element of the pay gap these days. Instead the primary factor in lower pay for women is being a mother, the so-called “motherhood penalty”.
“It’s not gender so much that causes the trouble in the pay gap; it’s being a mother and opting out of the paid labour force for a particular period of time,” she says. Research has found employers and co-workers tend to view mothers and pregnant women differently from other workers, seeing them as less reliable and less committed to their jobs.
According to Facebook chief operating officer Sheryl Sandberg, the problem is that once young women start even thinking about having children, they slow down on their careers. She exhorts women to keep their foot on the career accelerator until the last moment.
“Don’t leave before you leave” was one of her key messages in a speech to ideas forum TED in December on why so few women make it to the top. That way women can have more career choices later, and better earnings to buy in childcare and other help. Her other two messages for women are: “sit at the table”, which means taking your place at the table as a decision-maker in your workplace rather than modestly sitting in the background; and “make your partner a real partner” on the home front.
And in their excellent book Through the Labyrinth: The Truth About How Women Become Leaders, Alice Eagly and Linda Carli argue that women often do not realise how much career momentum and future earnings they lose when they take time out to be mothers. “Many women may not fully understand the advantages of maintaining employment despite substantial family responsibility.”
EEO Commissioner McGregor says no silver bullet exists to close the gender pay gap, but women would be paid better if employers had to track female and male earnings. She has proposed legislation that would require employers to keep a record of differences in remuneration between men and women. Research indicates some women are paid less from day one of their jobs, such as female social workers at Child Youth and Family, who on average start on lower salaries than their male colleagues, according to a 2008 report. Male commerce graduates also report starting on salaries $5000 higher than women with the same qualifications (although it is not known if they are going into similar jobs).
Each solution to the gender pay gap holds up a mirror to a set of values. For Goldman Sachs, the ideal society would harness women’s full value to the economy by a “closing” of men’s and women’s rates of employment. That means women would need to work like men: some 145,000 women would have to go back to work instead of caring for children, and another 200,000 would have to switch from part-time work to full-time work. Is that really what women want?
But there is another, more optimistic scenario that would acknowledge that the worth of both men and women goes beyond their role as economic units. For decades now, women have tried to mould their untidy lives around work. Bosses have doled out part-time and flexible work under sufferance.
If – finally – businesses decide women really are valuable, then they will woo them with the sort of jobs women often want – flexible ones. If the way women work becomes truly valued, then flexible and part-time work will become respectable in the workplace, even for important jobs.
Such jobs will also become more attractive to men. Only then will it become acceptable for men to throw off the one-eyed career focus that is such a feature of their gender. Only then will they become more interested in sharing full family responsibilities with women. And only then, when women and men are seeking the same things from their work and their lives, will there be real hope that the gender pay gap can close.