Behind the Numbers Part 3

Introduction

Here at Professionelle we believe in shedding light in murky corners. That means looking deeper than the well known facts that are dished out regularly. In the case of New Zealand's gender pay gap it means it's not good enough to know that men are better paid than women and leave it at that. We need to dig into how much better paid they are, in which occupations, and, of course, why.

This is the third and final article in our 'Behind The Numbers' series and is based on 2001 census data. As soon as the Stats Department releases comprehensive numbers for the 2006 census, I'll refresh this analysis.

In these articles I examine in detail seven professional occupation groups I believe are relevant to you, our users. These groups are:

1. CEO or managing directors not in the public sector
2. Information Technology managers
3. Advertising and public relations managers
4. Human resources managers
5. Accountants
6. Management consultants
7. Barristers and solicitors

In the first two articles I looked at how much women and men were getting paid in these occupations according to the 2001 New Zealand census data. And what I found was staggering.

Key facts so far

• Professional women were better educated than the men in our target occupational groups.
• Men, as predicted, were getting paid more, and in some cases substantially more, than professional women across all the occupations.
• The biggest pay gap was for barristers and solicitors where the median income for male solicitors was $42,137 higher than that of female barristers and solicitors.
• The proportion of men earning over $100k was generally double or more than the proportion of women. The ratio was lowest for HR managers and highest for accountants.

Too depressing

I should tell you that my usual approach to doing such analysis is to crunch all the numbers first, figure out what's going on, and then to write all the articles in one go. But I found this exercise so depressing that I ended up doing one round of analysis, writing the article and needing a break. Every time I worked on a piece, I was truly surprised at what the numbers showed.

This article is my last attempt to peel off the onion layer that will reveal a good explanation for why men are so much better paid than women. The obvious hypothesis is that it's all to do with women being much more likely to work part time.

Do professional women get paid less because they work part time more?

In the table below I outline the pay gap for the seven occupation groups and the % of men and women who reported working over 40 hours a week for each group. As you can see, the proportion of men who worked over 40 hours a week is consistently greater than the proportion of women. But, does this fully explain the pay gap? These professions are paid salaries after all, not hourly wages.

Occupation	Gap between men and women	% of men who worked over 40 hours a week	% of women who worked over 40 hours a week
Information Technology Manager	$14,118	91%	80%
Human Resources Manager	$7,877	95%	85%
Advertising and Public Relations Manager	$21,000	93%	80%
Barristers and Solicitors	$42,137	89%	77%
Management Consultant	$18,658	74%	60%
Chief Executive and Managing Director	$27,419	90%	64%
Accountant	$18,857	78%	54%

In a further attempt to clarify things, I created two indices:

1. I divided the median salary of women in each occupation by the salary of the men in that group to get an index.
2. I divided the proportion of men working over 40 hours a week by the same proportion for women to get a second index

My logic was that if indeed the reason men were getting paid more was because they were more likely to work full time, then the ratio in the first index should roughly equate to the ratio in the second index. In other words, I hypothesised it's all a question of hours of work, not pay rates per hour. If, however, the income index turned out to be below the hour index it would mean that women are paid less than men per hour, even allowing for women's greater propensity to take in part time work.

Take a look at the next table that compares these two indexes for the seven occupation groups:

Occupation	Pay gap	INDEX of median women's income/ median men's income	INDEX of women working >40 hrs/ men working >40 hrs
Information Technology Manager	$14,118	81%	88%
Human Resources Manager	$7,877	87%	89%
Advertising and Public Relations Manager	$21,000	71%	86%
Barristers and Solicitors	$42,137	54%	87%
Management Consultant	$18,658	72%	81%
Chief Executive and Managing Director	$27,419	63%	71%
Accountant	$18,857	69%	69%

Well, there you go. That makes for extremely interesting reading!

What's the Root Cause?

The pay gap for HR managers and accountants can be largely explained by the % of women working part time. For the rest, we have to conclude that the fundamental pay rate per hour is tilted against these professional women. And in the case of barristers and solicitors it's tilted as steeply as the south face of Mt Cook!

I've controlled for full time versus part time and for comparability of work by using specific occupations. We know from an earlier article that women are more highly educated than men in these occupations. We're running out of the usual excuses. One of the last possible reasons could include men being, on average, older in these occupations, so their income reflects longer careers. Unfortunately, I couldn't find Census data that showed detailed occupations by age, sex and income.

The age argument aside, we're only left with a behavioural explanation: women don't ask for pay rises as aggressively as men. In case that's true, we'll post advice on how we think women can systematically and successfully approach salary negotiations and pay rise reviews - but that will have to wait for another day!

Your Views

What are your thoughts about these numbers and the drivers behind them? Were you surprised? Do you think 2006 numbers will reflect a similar reality? We'd love to hear from you so please e-mail us on comments@professionelle.co.nz

Do you want to go digging for yourself? Check out:

http://www.stats.govt.nz/census/2001-census-data/2001-incomes/default.htm

© Professionelle Ltd 2007