Most of the Pacific pay gap is unexplained - study

Racism, discrimination and unconscious bias are likely behind damning new research which has revealed most of the Pacific pay gap is unexplained.

A report launched by the Human Rights Commission's Pacific Pay Gap Inquiry found that only 27% of the pay gap for Pacific men could be explained, and 39% for Pacific women.

Most of the gap couldn’t be explained, with 73% of the pay gap for Pacific men and 61% of the pay gap for Pacific women unexplained.

The Green Party is calling on the Government to pass legislation to increase pay transparency in light of this research.

Jan Logie, Green MP and spokesperson for Workplace Relations and Safety, told 1News the lack of explanation pointed to discrimination or unconscious bias.

“So we’ve known for a long time that there’s been a gap between men and women and between Māori and Pākehā, and Pasifika and Pākehā.

“This latest research shows us that the largest part of that, the reason behind those gaps, can’t be explained.

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“And that is an absolute call to action because it’s shocking the level of discrimination that’s been normalised across our labour market.”

Logie said her Employment Relations (Information About Wages) Amendment Bill would “be a good step forward” for the Government to take.

Her bill would require employers to advertise the pay rate for a job, that they can’t prevent employees discussing pay and would allow interviewees to ask about average pay for each role.

READ MORE: Stark reality of gender pay gap laid bare in latest statistics

“It evens up the playing field and puts the responsibility on the employer where it should be to ensure that everyone in the workplace is being paid fairly."

Logie said it would help remove unconscious bias, avoid exploitation and ensure employees have the information they need when negotiating pay.

In a statement on Tuesday, Saunoamaali’i Karanina Sumeo, Equal Employment Opportunities Commissioner, also put the unexplained pay gap down to discrimination.

“This research provides further evidence about what we’ve long suspected – the bulk of the Pacific Pay Gap can’t be explained and is at least partly due to invisible barriers like racism, unconscious bias and workplace discriminatory practices.

“Pay gaps exist because we perpetuate the entrenched disparity it needs to survive. Our current systems simply aren’t set up for Pacific, Māori, ethnic minority workers to feel respected, supported and to thrive in the workplace.”

Researchers used a wide range of observed factors to test which could explain the pay gap. These included job characteristics, education levels, number of household dependants, and regions where people lived.

The research shows that the portion of the gap that cannot be explained is attributable to several factors. These include non-observable factors such as area of study and personal preferences for non-wage aspects of the job.

The report ‘Empirical analysis of Pacific, Māori, and ethnic pay gaps in New Zealand’, is the first in a series of reports published by the inquiry.

It comes after Stats NZ in June released it's latest numbers on gender pay gap. Overall, the national gender pay gap is coming down. In 1998 it was 16.3%, where in 2021 it was 9.1%.

For Māori and Pasifika women the gulf is 14% and 20% respectively. The pay gap also exists at every stage of earning. Over a lifetime, on average a man earns nearly $1 million more than women.