Ethnic pay gap needs action now

27 Jul, 2023
Ethnic pay gap needs action now
Professor of Economics Gail Pacheco

It’s time New Zealand takes action to close the ethnic pay gap.

That’s the challenge laid down by Gail Pacheco, Professor of Economics and head of AUT’s NZ Work Research Institute.

Together with Dr Bill Cochrane from the University of Waikato, Gail has examined the factors that contribute to pay gaps between Māori, Pacific and Asian pay workers.

They found that the pay gap between European and Māori was 19% for men and 12% for women. The Pacific pay gap was 24% for men and 15% for women compared to Europeans.

The analysis accounted for factors often attributed to ethnic workers including being younger, less educated on average, or working in industries that are lower paid than their European counterparts. The study found that only a fraction of the pay gap for Pacific people could be attributed to these differences.

Despite comprehensive data modelling, the researchers found significant portion of pay gaps experienced by Pacific peoples could not be explained.

In fact, the data suggested only 27% of the pay gap for Pacific males and 39% of the pay gap for Pacific females could be explained.

Polling by Talbot Mills Research found that nearly two out of every three Kiwis consider pay gaps to be a "significant" or "very significant" issue, and only a small minority (8%) of New Zealanders oppose the introduction of policies that would mandate pay transparency in companies.

Gail Pacheco says when it comes to the ethnic pay gap, the evidence is clear and the time to act is now.

“The government can't and mustn't rely solely on the goodwill of employers to act on this vital human rights issue. The measurements are there, as are the solutions. The public support is there and most importantly, we know the problem can be managed. What are we waiting for?”

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