Gender pay gap – real but not all discrimination

A sensible and balanced view on the gender pay gap and the reaction to a report on it last week from Dr Rachel Hodder : THE GENDER PAY GAP IS NO MYTH, BUT NOR IS IT ALL DISCRIMINATION

Whenever controversial issues are debated, the loudest voices are often the least informed.

The quickest and loudest are often poorly informed.

Nowhere is this more evident than in the gender pay gap debate.

Last week, the Ministry of Women released an excellent report examining gender pay differences in New Zealand. The reception of the report was disappointing, but not surprising. It would seem that many of those arguing about the report had either not read it or not understood it.

The proponents lauded the report as undeniable evidence that women are paid 10% less than men purely because of discrimination. On the other side, critics rushed to rubbish the paper claiming the pay gap is a myth and only exists when researchers fail to account for obvious differences.

Both sides are wrong, but both also contain a nugget of truth. This report does provide strong evidence that the gender pay gap is indeed real. However, the report does shed light on factors beyond discrimination that may explain the gap.

With pay discrepancies there are always going to be multiple factors.

The critics pointed out that there are important factors that can account for wage differences. Personal characteristics, household characteristics, age, education, occupation, and industry will all matter in how much someone gets paid regardless of gender. Without accounting for any choice or circumstance factors, the average woman gets paid 12% less than the average man.

The authors know this too and so they controlled for these factors. The pay gap persisted. They showed that a woman will get paid 10% less than a man with the same age, ethnicity, education, occupation, industry, marital status, number of kids, full time status, etc.

That 10% is called the ‘unexplained’ component of the wage gap. This is not a failure of the model, as some critics claimed. Nor is it necessarily all caused by workplace biases, as some proponents claimed.

Women are also more likely than men to choose child care over advancing their careers (and earnings), at least temporarily.

What that 10% represents is the difference in pay that men receive when they have the same identifiable characteristics as women. The 10% can then be broken down into the different factors that affect men and women’s pay differently.

The pay gap is not caused by women choosing lower paying careers. The authors controlled for that. There is still a gap.

There may still be important differences within occupations and industries that the study cannot observe. Surgeons are paid more than paediatricians but in the data they will both be counted as professionals in the health care sector.

However, the study showed that women actually receive slightly higher returns to industry and occupation choice than men. In other words, the wage gap looks bigger, not smaller, once you control for these factors.


The report proponents did miss some of the important details too.

First, the paper clearly demonstrates that there is no pay gap at the bottom end of the income distribution. If anything there appears to be a slight bias in the opposite direction, particularly for younger women.

So females start at least as well off.

Moving up the distribution, the gap increases and less can be explained by observable factors. Which would seem to point towards a glass ceiling effect. Women have roughly equal opportunities at the early stages of their careers but face a tougher climb up to the top of the ladder. However, the glass ceiling is not entirely imposed by sexism.

A separate report released by Statistics New Zealand showed that the gender pay gap is much larger for parents compared to non-parents. This report confirms that differing pay effects from household characteristics explains about half the pay gap. For better or worse, mothers are much more likely to spend time out of the workforce for child-rearing than fathers. This can have a dramatic effect on career advancement.

Women are more likely than men to choose to take time out from their careers.

The biggest factor that affected the pay gap was the difference in pay as it relates to age. Older men get paid much more than older women. This could partly be explained by the same motherhood penalty that may have enduring effects throughout a woman’s career.

It may also be picking up cohort effects. Sexist attitudes from decades ago will have enduring effects on the income distribution.

As more women get into management and salary and promotion deciding positions sexist bias should diminish – unless women tend to be biased too.

As society gets more progressive these effects should diminish.

The critics claiming the pay gap is a myth should pay more attention to quality research in the area. There is a wealth of research demonstrating unconscious bias against women. It would be absurd to suggest that discrimination does not cause some of the pay gap.

However, accepting that such discrimination exists does not mean accepting all the proposed policy solutions. Both sides seem to miss this crucial point. There is nothing inconsistent with acknowledging a pay gap but disagreeing that Government must fix it. Some policy cures can be worse than the disease.

The best way to address the gender pay gap will be determined by informed, rational analysis. Something not offered by those who don’t bother to read the research before commenting.

It takes time to get informed comment from people who take the time to read reports properly rather than react to headlines. By the time that happens most vocal critics are likely to have moved on to other issues.

Weka Farm rule 1

Weka is a regular at The Standard who often takes major offence at anything she deems to lean towards sexism or racism, so you might thing she is a champion against prejudice and discrimination.

But she’s a selective champion against discrimination, and hypocritically chooses to actively discriminate against people she disagrees with (I guess) politically.

I’ve been happy to let Shane post here, he wanted to get information out and I support anyone trying to do that whether I agree with them or not. I like to promote free speech and informed discussion.

Shane links to his post here from elsewhere, including The Standard. When he started doing that he was jumped on and lambasted by a small but vocal number of regulars there, simply because of the association with me. Some of them said they were interested in what Shane wrote about but wouldn’t follow the link because it was to here.

So Shane set up his own blog and started provided a link to that as an alternative for those who were too bloody minded to come here. But even that isn’t good enough for Weka.

Today Shane posted at The Standard:

My last blog post on medicinal Cannabis for a while, this time not based around pain, but the Anti Nausea and appetite stimulating effects and their positive impact on a patient suffering from HIV

Alternate address for those not fond of beige.


Sorry, but have stopped reading until the entanglement with Pete George is gone. By all means post on his site too, but when you link like you do, here of all places, it’s a distraction and plain rude (I suspect you don’t fully understand the extent of the trouble PG has caused here).


To this day I am still blissfully unaware sorry. I only sign in to write my piece, then i’m out again until next week…


I think it’s been pointed out to you a number of times. My comment isn’t about you posting at yawnz, it’s about how you link here. Your choice of course.

Weka doesn’t seem very blissful but she is unaware of the trouble her active intolerance of others might cause. It’s not just or necessarily because she disagrees (as demonstrated by this pettiness against Shane), with me it seems to be little more than she decided long ago that I was someone who should be shut out and shut up.

Of course everyone can choose to themselves which links to follow but Weka’s obsession with trying to discourage anything to do with me is bizarre.

But it’s not uncommon at The Standard, they make an art form of discouraging any participation or association with any voices they want to shut out and shut up.

I believe Weka is a promoter of the Green Party. She gets support from within her wee Standard clique but that association doesn’t do any credit to the Greens amongst the much wider audience who read The Standard.

Weka Farm rule 1: Discrimination is forbidden unless I don’t like them!

The Queen may challenge conservative loyalties

Newstalk ZB: Queen expected to back pledge promoting gay rights

The Queen is expected to back a historic pledge to promote gay rights and gender equality, in one of the most controversial acts of her reign.

During a live television broadcast she will sign a new charter designed to stamp out discrimination against homosexual people and promote the empowerment of women.

The Queen will sign the new Commonwealth Charter and make a speech explaining her passionate commitment to it.

Insiders spoken to by the Daily Mail say her decision to highlight the event is a ‘watershed’ moment – the first time she’s clearly signalled her support for gay rights.

Time to review our links with the monarchy? Or should we congratulate the Queen on making socially relevant comment?

Promoting “empowerment of women” and homosexual rights may not go down well amongst her more conservative fans.