The gender pay gap

NZPA report:

A new study of graduates with bachelor degrees has revealed that men start earning more than women a year after starting work.

Women’s Affairs Minister Pansy Wong said today her ministry’s study used data from Inland Revenue and looked at the difference between the income of male and female graduates between one and five years after they started their employment.

The pay gap started developing from the first year, and after five years it ranged between 1 percent and 20 percent, with the biggest difference in management and commerce.

“While the income gap varies between different fields of study, no matter what area of study is pursued an income gap has emerged between men and women … and it is quite a significant gap,” Ms Wong said.

“The bottom line is that a bachelor’s degree held by a woman should be worth the same in the marketplace as one held by a man.”

It is disappointing there is a pay gap between male and female graduates, so soon after entering the work force.

The fact that overall average female pay rates are only 88% of male pay rates, has never convinced me this is due to discrimination.  The reality that many women take time out of the workforce when their children are young, makes it unlikely one will ever have the average pay rates the same. There is also the issue of different professions having different gender compositions.

So in a way the overall average pay rates for men and women, are not very useful – just as overall crime rates are also not very useful.

But the study referred to by Pansy Wong, does lend credence to the theory that there is discrimination in pay rates. You would expect a female and male commerce graduate who both enter the same profession to be attracting the same pay rates – at least in the initial years.

The ministry was using the extra $2 million it was being given over four years to increase its ability to address the gender pay gap, she said.

Part of this would be the ministry working with universities to recruit up to 6000 students graduating this year who would be tracked over the next 10 years.

That would also be worthwhile research – far better to track a large group of students, than merely to just compare the average wages over all occupations.

I’m generally reluctant to conclude discrimination, and look for other factors, because discrimination is just so plain stupid. I can’t understand how anyone would think someone is more or less capable in a job because of their gender, and would pay them less. Mind you, I think the discrimination might be subconscious, rather than a conscious decision.