Did business leaders just pledge not to violate the most basic equal pay principle, & we’re happy about it?

Did Australian business leaders just pledge not to violate the most basic equal pay principle, and we’re happy about it?

Last week, 122 Australian business leaders publicly committed to closing the gender pay gap in like-for-like roles within their organisations. To support others to do the same, Male Champions of Change released an accompanying resource, the Closing the Gender Pay Gap Report . According to the press release, it offers a step-by-step guide to ensure “equal pay for equal work”.

This collective pledge and resource were positively received. Here at Women’s Agenda, Georgina Dent rightly praised the guide for including a whole section that renders null and void the multitude of excuses business leaders offer to justify not conducting an equal pay review or denying the existence of a gap within their organisation.

Indeed, this bit of the report does make for particularly cheerful reading. But my eye kept going back to the bit where the CEO’s pledged to tackle “like-for-like” gaps in their organisation and ensure “equal pay for equal work”.

Did I read that right? Did 122 of Australia’s top business leaders essentially take a collective pledge not to violate the most basic equal pay principle that was established via a landmark 1969 Commonwealth Arbitration Commission decision in which the full bench unanimously accepted the principle of equal pay for equal work: you can’t pay Paul and Sally differently for doing the same job. And we all seem to be happy about that?

Before I proceed, I would like to clarify one thing. This is not going to be a blanket criticism of Male Champions along the well-trodden path of “why do we need men who want extra credit for helping to achieve gender equality”. By and large, I’m with Annabel Crabb, who praised Elizabeth Broderick for creating MCC and leading change by making gender equity a contest. MCC has done some good things to accelerate the pace of change, and this may well be one of them.

But this particular initiative left me scratching my head. Now that I’ve spent some time unpacking it, conferred with a few experts and devoted a not insignificant amount of my weekend to stewing, here’s where I’ve landed. (Thanks Women’s Agenda readers for your patience, as I’ve taken a few days to work this out and get back to you.)

What took them so long?

In case I misunderstood, I closely re-read the press release, and found the following: “this report encourages leaders to conduct like-for-like pay gap analysis as this lens enables leaders to identify if men and women in their organisation who are doing the same role (with the same accountability, breadth and difficulty, and with similar performance expectations) and with equivalent competence and experience are being paid differently”.

Bingo, so I did get that right. Isn’t that the most basic first principle of equal pay established in 1969? They say they have decided to focus on like-for-like differences because it’s where Male Champions of Change have the power to tackle the gap within their organisation ‘immediately’.

Well, yes. But why is this worthy of celebration? Nearly half a century after the principle of equal pay for equal work was accepted, isn’t that the least we can expect? Those doing the same job should not be paid differently. Employers have had it within their gift to tackle these like-for-like differences ‘immediately’ for decades. What’s more, it might have been a good idea to get on with it sooner to avoid equal pay claims.

The last chance equal pay reporting saloon? 

The more I thought about it, I realized there was an elephant in the room here, which wasn’t mentioned in the MCC press release, the report or any of the accompanying news coverage (or at least the coverage I saw). Employers have been encouraged to voluntarily analyze their pay roll for pay gaps (like-for-like and otherwise) for some time now. The Workplace Gender Equality Agency has long provided support and resources. But according the WGEA, only 27 percent do.

The cynic in me can’t help but suspect that this might be the last chance voluntary equal pay review saloon. Do business leaders know they need to improve that figure and get others to voluntarily comply before the government (perhaps a Labour government) loses patience and introduces mandatory equal pay reporting, as happened in the UK this year? Many UK employers are quaking in their boots fearing many “BBC moments”. (It’s worth noting that in the UK, it was a Conservative government that lost patience.)

I also wondered if these 122 business leaders were going to publicly disclose what they uncovered? A quick call to the MCC press office answered that question. Some may, like Ernst and Young already do (bravo EY). But some won’t.

Now that kind of “radical transparency” would certainly change things. Without it, I fear this might be a wink and a nod: “trust us” we will measure this and do something about it. The public or those who work for a particular organization and are affected by the gap may not know the true extent of the problem.

The risk of perpetuating the myth that there is only one ‘real pay gap’ 

There was one other thing about the focus on “like-for-like” gaps that concerned me. Warning, equal pay jargon and geekery ahead.

We all know there are many different drivers of the gender pay gap, including the kind of like-for-like sex discrimination that sees men and women paid different amounts for doing the same job.

The thing is, in 2017 like-for-like difference account for very little of the overall gap. A joint report from the Diversity Council, WGEA and KPMG released last year, She’s Priceless, the Economics of the Gender Pay Gap, put ‘Sex Discrimination” down for 38 percent of the pay gap (up from 35 percent in 2009). Years not working accounted for 21 percent, industry segregation 19 percent, and occupational segregation 11 percent.

The Diversity Council’s “sex discrimination” category, however, accounts for lots of different kinds of sex discrimination, including pregnancy, passing over women for promotions or not interviewing them for top jobs in the first place — not just like-for-like pay differences.

While the Diversity Council was unable to further break down this figure to quantify the extent to which like-for-like differences account for the remaining gap in Australia, research from the UK and Europe is indicative.

According to data for 8.7m employees worldwide gathered by Korn Ferry, a consultancy, women in Britain make just 1% less than men who have the same function and level at the same employer. In most European countries, the discrepancy is similarly small. The Australian Human Rights Commission has said  that it is “rare, but not unheard of, for women to be paid a lower base wage then men doing the same jobs”.

Those who peddle the “pay gap doesn’t exist” myth would very much like to focus the debate on this relatively small like-for-like difference, suggesting this is the “real pay gap” and the only one that really matters.

They claim that the ’national pay gap’ figure, which is calculated by the WGEA and sits at 15.3 percent according to figures released last week, is a nonsense figure because it doesn’t reflect like-for-like employees in the same or comparable roles. The WGEA figures is indeed a population wide figure that looks at the difference between women’s and men’s average weekly full-time equivalent earnings, expressed as a percentage of men’s earning.

In response to this, advocates for measuring the national pay gap in this way have long said it better captures the overall position of women in the workforce and the full suite of drivers of the pay gap. It also points our attention to the variety of actions necessary to tackle it, not just the blunt instrument of legal redress for like-for-like differences (which, again, has been around since 1969 and has only gotten us so far).

My concern is that this MCC initiative may inadvertently narrow the debate to a relatively small part of the overall problem and thereby play into the hands of advocates of the “pay gap doesn’t exist”/ there is only one “real pay gap” camp.

See, the they will say, the ‘real’ gap is small, job done. Just don’t pay Bob and Sally differently for doing the same job, and you’ve done your bit. The rest is down to women’s “choices”.  The it’s a myth peddlars would much prefer it if we didn’t broaden the debate and tackle all those other thorny issues, like the undervaluing of women’s work, or the fact that women shoulder the lion’s share of caring responsibilities. You know, the kinds of things that legal precedent can’t necessarily tackle, but where culture and structural change is needed.

“Later” is now

In the midst of my “is it just me” moment, I reached out to a few experts for their point of view. In general, I was met with a more pragmatic response.

Alexandra Grayson a Principal at the Maurice Blackburn law firm who manages the industrial relations practice acknowledged the complexity of the issue. She said, ‘There is still much work to be done to properly address the issue of the gender pay gap in Australia. But campaigns like the Male Champions of Change are an important part in this process that should be supported and encouraged to ensure that closing the gender pay gap remains a top order priority for businesses right across Australia.”

Catherine Petterson, the Operations and Communications Director of the Diversity Council Australia said, “It makes sense that they are trying to get all Australian organizations to commit to equal pay (i.e. like-for-like) first, with a view to then lifting the bar/level of sophistication at a later stage to encourage organizations to start thinking about pay equity more broadly – otherwise it’s a bit overwhelming for organizations just starting out in the area and trying to get their head around what to do.”

I know, I’m very hard to please. I don’t want to take the air out of the Male Champions of Change tires on this one. They should be encouraged. If it does make a difference, then I will be the first to congratulate them.

But I can’t help asking, and sorry if the I sound like a broken record, why are some organizations ‘just starting out in this area’. For me, “later” is now.

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