The Position of NZ's Professional Women in the Third
Millenium
In May and June 2007 , we had articles and comment about the
position of professional women in New Zealand published in the New
Zealand Herald's The Business. One piece covered our
findings about trends in the pay gap for professional women this
century. Other commentary reflected our investigation into whether,
with the departure of Gattung and others, NZ was seeing the end of
a "Golden Age" of women CEOs. In this feature piece, we blend this
published material together.
New data
These recent pieces draw on newer data than was available when
Galia wrote her three-part analysis of the pay gap. One key source
we used was the annual NZ Income Survey which runs up to 2006. The
second was a special request we made to Stats NZ for information
from the only partially-released 2006 census. This gave us numbers
and pay by gender of the specific job categories for public and
private sector CEOs.
Professional women definition
First of all, who do we mean when we say 'professional women'?
We mean exactly the sort of women who are members of the
Professionelle community, i.e. academics, accountants, barristers,
CEOs, consultants, corporate managers, etc etc. Working with the
constraints of our data sources, however, we have to use a somewhat
broader definition. The Income Survey covers professional women in
two main occupation groups:
- 'Professionals', which includes accountants, lawyers and
scientists and also public sector employees like nurses and
teachers.
- 'Legislators, Administrators & Managers' which includes
MPs, corporate managers and public and private sector chief
executives, among others.
Growing numbers
There are about 180,000 women in 'Professionals' and another
75,000 in 'Legislators'. Combined, these two groups comprise almost
30% of NZ's working women and their numbers are growing at over 3%
each year, faster than for any other occupation group for women.
(Professional men are growing at the same rate, but are eclipsed by
male technicians and by trades workers).
There are far more women CEOs around now than a decade ago, too.
The fastest growing group of women CEOs is in the private sector.
Here the number of women employed has seen a huge 31% compound
annual growth rate over the decade to 2006. Female CEOs in local
government and central government have grown at around 11% and 5%
compounding, respectively.
These rates, well above the numbers for professional women in
general, sound encouraging. However, the numbers for male CEOs have
been growing too, and the net result is that women have only
increased their proportion strongly among Chief Executives - Local
Government. This is the one CEO group where women have breached the
50% mark (see the graph below). In the private sector, the
proportion of women CEOs has actually shrunk from 22% in 1996 to
19% in 2006, at a time of very rapid growth in this occupation
group.
No Golden Age
A final, depressing observation on women CEOs is that, taken
overall, their numbers have grown considerably slower than men over
the last ten years - 19.6% compounding versus more than 25%.
Consequently, men chief executives finished the decade even further
ahead on numbers than they started at in 1996. If we look at the
ratio of male chief executives to their female counterparts, the
ratio worsened as follows:
1996: 2.2 men for every woman
2006: 3.4 men for every woman
So much for the Golden Age of women CEOs!
Higher education, higher pay among women
Professional women - those in the broad Professional and
Legislator occupation groups - have invested substantially in
themselves through education. Almost 45% of them have tertiary
qualifications, compared to only 10% of women in all the other
occupation groups. These are the women who have increasingly filled
the ranks of graduates from law and commerce degrees - a key hiring
pool for the management track in both private and public
sectors.
This educational attainment probably explains why they earn more
than women in other job groups. Professional women earn the most at
$22/hour (median), while the legislators earn the next highest rate
at $19.50. By contrast, all other women's median hourly pay is only
$13.50/hour. So where's the problem?
Pay inequity alive and well
The problem, of course, is they're still paid less than their
male peers. Thirty five years after the feminist revolution of the
seventies, pay inequity is still with us for high achieving,
well-educated women. It's a hard fact to swallow.
How much are they behind men in these two occupational groups?
In 2006, median weekly earnings across all age groups for
professional and legislator women were about 70% of their male
peers'. Of course, part time work is one of the causes of the gap,
even though far fewer of these women work part-time than women
overall do - only about 20% of them work part-time versus 35% of
all women; nevertheless, part time work means fewer hours and that
does contribute to the weekly pay gap.
We corrected for that, however, by only looking at median hourly
earnings. This shrinks the pay gap to about 80%. On 2006 pay rates,
however, that still equates to about $10,000 a year!
Women CEOs paid less, too
And the story for CEOs is no better. As the graph below shows,
public sector women CEOs received two thirds of the pay of their
male counterparts in 1996 and this situation remained utterly
unchanged in 2006. The situation improved for private sector women
CEOs - but only because men's pay fell. Two wrongs don't make a
right; we don't want to see men's pay reined in either!
One issue may be the part time versus full time argument - but
we don't know of any part time CEOs or Managing Directors (of
either gender)!
You'll remember from the analysis above that the penetration of
women among Local Government CEOs has grown strongly. Can you guess
which CEO group received the lowest salary in 1996 and 2006? Of
course you can, even before looking at the next graph. It's local
Government CEOs. The median salary for women in this group was
$35,500 in 2006. This is well down in real terms on the $37,500
they received in 1996. Private sector male CEOs, by contrast earned
a median salary in 2006 of over $82,000.
The public sector pay gap data presented seem somewhat ironic,
considering the gender of our Prime Minister and several of her
cabinet colleagues, and in light of a 2003 taskforce launched by
the Labour Government into this issue!
Pay gap drivers
The reasons why women in general face a pay gap have been widely
covered, most recently in the Ministry of Women's Affairs 2002 Next
Steps in Women's Pay Equity. To recap briefly, the main drivers
noted were lower educational attainment, fewer years of work
experience (typically due to reducing work hours to care for
dependants) and the higher proportion of women in lower paid
occupations. Other commentators have also pointed to women's
apparent lack of assertiveness when it comes to negotiating entry
pay and raises.
There's an aspect of this pay gap for professional and
legislator women that's astonishing, however. Since 2000, their
median hourly pay gap has worsened. This century, it has
trended down almost one percentage point a year. For 15-24 year
olds, the trend since 2003 has been even more sharply negative. In
those three years, young professional women have seen the gap widen
by over a point a year and for professionals the rate has been
twice that - see graph below.
Better performance on drivers
None of this deterioration makes sense when we look at how women
have progressed on the drivers of pay inequity listed earlier.
The educational attainment of women in these two occupations has
increased rapidly. For example, the proportion of professional
women with tertiary education since 2000 has grown eight times
faster than men, to now almost match them, according to the New
Zealand Income Survey.
It's no news that women are having their babies ever later, too.
Two thirds of New Zealand's babies in 2004 were born to mums over
the age of thirty, and the 40-44 year old cohort of mothers is the
fastest growing. That means women are staying longer in their
careers and amassing more work experience than ever before.
We can't assess shifts in the relative mix of occupations until
more data becomes freely available from the 2006 census. As to the
suggestion that women don't push for pay, it's hard to see why that
should have deteriorated in the last few years.
Impact of childcare costs
Whatever is fuelling the widening pay gap for professional and
legislator women, employers should be concerned. Women's pay has a
direct impact on their ability to keep working full time. We've
said it before on this site: if women don't earn enough to afford
really good quality childcare it's harder for them to decide to
stay on at work. High quality care means a very low ratio
baby-adult arrangement, like a nanny or in-home care. That can
easily cost $60,000 in pre-tax income. It's not hard to see that
the $10,000 mentioned above would make a material difference to the
professional working mother's trade-offs.
One way traffic
Once these women step out into less traditional work
arrangements, the chances increase that they won't return to full
time work. Anecdotal evidence from our female Professionelle
members is that participation in conventional (i.e. full-time and
part-time work) falls from a high of almost 90% for 26-30 year olds
to a low of just over 50% for 41-45 year olds. That's a lot of
talent being lost to employers, to say nothing of sunk recruiting
and professional development costs. The men who stay on and rise
into more senior, high-paying positions cannot logically all be the
very best candidates, but instead represent the best available
after female contenders have left.
Expensive Loss
New Zealand's population pyramid is currently tightest for those
aged 25-35 - precisely the age group that at its younger end is
absorbing companies' development time and expense and at its upper
end is eroding as professional women finally begin families.
Employers who want to win in this tight talent market surely need
to check their own pay gaps, and figure out if they can afford to
ignore them.
Slip-Slidin' Away
It's clear that among employed women, the occupation groups that
comprise professional women have been doing well this millenium in
terms of their numbers and their absolute levels of pay. Female
CEOs are also rapidly increasing in number. However, the relative
position to professional men and male CEOs currently appears to be
headed in the wrong direction, despite professional women steadily
improving their performance in terms of education and length of
career. As Paul Simon sang, "The nearer your destination, the more
you're slip-slidin' away."
We don't know when or if the slide will reverse, but we'll keep
watching the trends and reporting on them. In particular, we're
keen to find data that is as recent and as directly comparable
between the genders as possible. That way we hope to avoid the
recent angry exchanges you can read about in
Business Week's blog, that were triggered by an article
reporting on persisting pay gaps.
What do you think?
Can you contribute to this issue? What have you seen and
experienced? Please let us know at feedback@professionelle.co.nz
Data Sources
- New Zealand Income Survey June Qtrs 2000-2006
- 1996 and 2006 Census data sourced from Statistics NZ on three
occupation groups relating to chief executives and the top layer of
management:
- 11211 Chief Executive - Central Government
- 11212 Chief Executive - Local Government
- 11311 Chief Executive and/or Managing Director
Demographic Trends 2005 (for maternity data and population
pyramid)
- Labour Market Statistics 2000, and 2006 (for education data by
occupation group)
- Census of Population and Dwellings 2001 (for full time versus
part time participation by gender and occupation)
- Ministry of Women's Affairs "Next Steps in Women's Pay Equity",
2002
- Professionelle's registered member database
© Professionelle Ltd 2007