New research scrutinises New Zealand’s largest pay rise for women

New research scrutinises New Zealand’s largest pay rise for women

March 28, 2019

New research by the New Zealand Work Research Institute at Auckland University of Technology (AUT) and the Human Rights Commission has for the first time revealed the challenges and advantages of New Zealand’s largest pay increase for women.  

“The Value of Care – evaluating the impact of the 2017 pay equity settlement of the aged residential, home and community and disability sectors” examines the impact of the $2 billion pay equity settlement, which increased pay for 55,000 workers in a female dominated workforce who had largely been paid the minimum wage. 

Nearly 70 staff, including both managers and care and support workers, across the aged care, home and community care and disability support sectors spoke to lead researchers Associate Professor Katherine Ravenswood and Dr Julie Douglas about the impact of the pay equity settlement.  

“This research is world leading. It is especially rare for a female-dominated sector to receive a large pay rise. Now, for the first time we can understand the impact of paying carers a living wage,” says the Equal Employment Opportunities Commissioner Saunoamaali’i Dr Karanina Sumeo. 

“There are some heart-warming stories of how the pay settlement has dramatically affected workers. One carer told us she was able to buy glasses for the first time while another was able to afford a visit to the dentist. It’s these simple everyday improvements that enhance the quality of life,” says Dr Sumeo.  

The research has also revealed pay increases for the sector were welcomed universally by employers and workers as long overdue recognition.   

“What this research shows us is this workforce really appreciated the recognition of their work and skills,” says Associate Professor Ravenswood.   

“They’d been underpaid and underappreciated for so long. Many had struggled to make ends meet on their low wages. Now they can go to the doctor, have a holiday away from home, and some can even reduce their hours so they can spend time with their own family,” she says.

“The pay equity settlement values their work as it should be and says that these women are an important part of our society”.  

Interestingly, the research has uncovered some unintended consequences from the settlement.  

“We were dismayed to find that the way the pay equity settlement was implemented means some managers and organisations have reduced employees’ hours. The result is some workers are financially worse off and have less certainty in their work” said Dr Douglas.  

“We also found that, in reality, the new financial value of the work wasn’t accepted, and some managers gave more work to their care and support workers, or even delegated nursing tasks to them because they were now paid more” said Associate Professor Ravenswood.  

The researchers expect that as the 2017 Pay Equity Settlement continues to be implemented, some of these issues will resolve as people understand previous low wages were caused by gender discrimination, not what the jobs were actually worth. Some policy changes to funding and other requirements under the settlement will also smooth the way for this settlement and any future ones.  

“What these issues highlight is that the sector, in both clinical and non-clinical roles is underfunded. I urge the Government to implement the recommendations of the research, including developing a clear and consistent funding model, which fully funds the sector”, says Saunoamaali’i Dr Karanina Sumeo.  

The Human Rights Commission, NZ Work Research Institute and Careerforce funded the research. 

Click here to download the report.


Notes:  

From 1st July 2017 onwards, 55,000 state-subsidised care and support workers received a pay rise under the Care and Support Workers (Pay Equity) Settlement Agreement.  

This pay settlement, which was a result of the Kristine Bartlett successful equal pay claim, removed wage discrimination based on gender for care and support workers.  

The $2 billion settlement is being introduced over a five-year period and will see workers’ wages increase up to $27 an hour during that time.  

“The Value of Care” research examines how the settlement impacts the retention and recruitment of carers, composition of the workforce, carer’s financial status, use of government support and choices around rostering and hours of work.  

About the New Zealand Work Research Institute (NZWRI):

The New Zealand Work Research Institute (NZWRI) conducts enquiry-driven research to explore the issues affecting people and work. A multidisciplinary team conducts analysis of both national and international issues that ticks the box for both academic rigour and relevance to change makers in business, government and the community in general.  

NZWRI is based at Faculty of Business, Economics and Law, Auckland University of Technology (AUT). 

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