Yesterday’s news of a major settlement for aged care workers is a big win in the fight for pay equity in New Zealand. Now it’s time to close the loopholes that could prevent women with children benefitting from the deal, says Dr Jess Berentson-Shaw.

In announcing that the female-dominated aged care and caring work force will have its pay equalised with similar male-dominated industries, Health Minister Jonathan Coleman and the government have done an astounding thing. They have made a public statement that they value (some aspects of) gender equity in New Zealand.

Lets talk about the significance of the public statement. Online and in real life there can be serious scepticism that those in female-dominated industries, like aged care and nursing, are 1) doing equivalently skilled work to those in similar but male-dominated industries, and 2) being paid less for it because they are doing “women’s work”, which is deemed inherently less valuable.

Many will agree that women should be paid the same as men for the exact same work, but stop short (and even vehemently oppose) the idea that men and women in similarly skilled roles in different industries should be paid the same. That we pay less for women’s work because we don’t value women the same way we value men in New Zealand is just too challenging a notion. I agree it is a pretty unpalatable truth and perhaps, for some, too much at odds with how we like to see ourselves: a society that treats everyone equally.

While some of us understand the evidence regarding “occupational segregation” and want to do something about it, for others the research showing that discrimination against “women’s work” is a significant issue (driving about 30 percent of the gender pay gap) will not touch their belief that it is a fabrication or even paranoia. But what might touch them is the government’s new stance. While feminism may be a dirty word to many in the government, with this settlement it has acted in a decidedly feminist way, even if had to be dragged there.

With this move the government has shown that the message about pay equity (equal pay for work of equal value) will be acted upon. It is an enormous win for all those individuals and organisations, including the unions, that have worked incredibly hard for many years to be heard. It is something all New Zealanders will benefit from. Gender equity remains an important New Zealand value.

Is this also an investment in low-income families?

By equivalising the pay for those in the caring workforce and employed in the public sector, the government is giving a boost to some of New Zealand’s hard-working and undervalued women.

According to Jonathon Coleman, “For the 20,000 workers currently on the minimum wage of $15.75 per hour, it means on July 1 they will move to at least $19 per hour, a 21 percent pay rise. For a full-time worker, this means they will be taking home around an extra $100 a week, which is over $5,000 a year.”

For each woman involved it is recognition of her hard work.  Yet many women, especially in the low-paid workforce, have children. Does it mean a win for them too?

Research is clear, women are heavily over represented in the family poverty data. In part that’s because of the gender pay gap but it’s also a result of the way our current social support system fails them. For a mother on a low wage, facing rising accommodation, food and transport costs, and an unworkable support system (both welfare and Working for Families), a pay increase like this may not actually make much difference to her family’s wellbeing. Which seems a bit nuts, right?

The devil of these things is in how a myriad of complicated tax and support policies actually interact with the money coming into a family. It can be death by a thousand exceptions and adjustments. While a $100-a-week pay rise for families on low incomes is a significant amount, many of these families will be receiving Working for Families (WFF). This matters because the impact of the pay rise on their overall economic situation may not be as rosy as it is painted, due to the ghastly “effective marginal tax rates” or EMTR.

The EMTR is what you “effectively” pay in tax once all your different forms of income, support payments, abatements on supports, etc, are activated. For those in work and getting WFF, an increase or indeed decrease in working hours can effectively increase their tax rate to a point where it eats away all the additional gain. It happens because we have a rule that says you must work a minimum number of hours to first receive the rebate and another rule that says the more hours you work or money you earn the smaller the rebate becomes.

Add in the accommodation supplement, which counts as income too, and then student loan repayments, and the EMTR ratchets up. Another factor: WFF is only indexed to inflation on a pretty irregular basis. Without totally confusing those of you lucky enough not to have to navigate these systems, the take home here is that a pay rise is no guarantee of a better economic situation for low-income families with children. It could be though.

If the government wants to build on its newly minted commitment to gender equity it could do something meaningful for all the low-income women working, raising children and struggling to keep their heads up in an environment of rising costs and insecure, low-paid work. Working for Families could work so much better to really assist these families. We could also look to something really progressive for families and support them with a basic income, like we do our elderly and like we used to with the family benefit.

We could call them something other than “feminist” policies if that helps make them palatable to the majority. But regardless of labels, we just need to do them and do them now. Yesterday’s announcement has shown that with encouragement and enough pressure, progressive policies can be fought for and won by citizens in New Zealand.

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