The Ethnic Pay Gap In New Zealand’s Public Sector

A new study reveals significant ethnic pay disparities within the top tiers of New Zealand’s core public sector and district health boards.

New data obtained under the Official Information Act (OIA) shows a pattern of ethnic pay disparities across the public sector, as well as a gap in employment policy rhetoric and practice.

There was disproportionately lower representation of Māori and Pacific peoples across all DHBs, compared to the national population. And they were significantly less likely to earn more than $100,000.

“This failure to promote Māori and Pacific staff to the top tiers of the public sector is consistent with definitions of institutional racism,” says Dr Heather Came, Head of the Public Health Department at Auckland University of Technology (AUT).

“From this study, we now know that entire government departments have, at different times, had no senior Māori or Pacific staff,” she says.

“This suggests that our public and health sectors do not have the benefit of Māori and Pacific expertise, even though improved outcomes for these groups is often a government priority. The absence of this crucial and high-level input may be contributing to the problems we continue to see in health, education and the justice system, for indigenous and ethnic minority communities.”

The study, published in the International Journal of Critical Indigenous Studies, aimed to identify the extent of ethnic pay disparities among senior management in the public sector.

Ethnic pay data was collected under OIA from 28 core public service departments (CPSDs) and all 20 district health boards (DHBs). While the State Services Commission (SSC) publishes workforce data on public service employees earning six figures or more, there is no breakdown by ethnicity.

Researchers analysed the total number of full-time equivalent staff by ethnicity (Māori, Pacific, or Other) focusing on those who earned more than $100,000. The findings provide a snapshot of the ethnic pay gap at four points in time (2001, 2006, 2011, and 2016) over a 15-year period.

Core Public Service Departments (CPSDs)

FTE staff from 2001-2016

• The proportion of Māori and Pacific CPSD staff mirrored the general population, with slightly higher representation of the latter.
• The proportion of CPSD staff who identified as Māori decreased 4.9 percent (from 14.3 to 13.6 percent), while those who identified as Pacific increased 64 percent (7.5 to 12.3 percent).
• In 2001, only 14 (of 26) CPSDs had Māori staff who earned more than $100,000, which increased to 21 in 2006, 23 in 2011, and 26 in 2016.
• In 2001, only four (of 26) CPSDs had Pacific staff who earned more than $100,000, which increased to 9 in 2006 and 18 in 2011, and reduced to 16 in 2016.

District Health Boards (DHBs)

FTE staff from 2001-2016

· There was disproportionately lower representation of Māori and Pacific peoples across DHBs, compared to the national population.

· While the proportion of Māori and Pacific staff at DHBs earning more than $100,000 increased (from 0.5 to 2.7 percent and 0.5 to 1.4 percent, respectively), the ethnic pay gap remained consistently high.

· On average, Māori and Pacific staff at DHBs were significantly less likely to earn more than $100,000, (56 and 71 times, respectively) compared to the Other ethnic group.

The key recommendations of the study include improved government data collection on ethnic pay gaps and a review of human resources (HR) practices within the public sector.

New Zealand has had equal-pay and anti-discrimination legislation for decades. From 1988, all state sector chief executives were required to be good employers and have an Equal Employment Opportunity (EEO) programme. It has been argued that the scheme’s initial success was dependent on monitoring and enforcement, which was eroded by the major state sector reforms of the 1990s.

Dr Came says, improved ethnicity data collection is critical if we are to implement EEO policies. It is also necessary to enable analysis of progress towards the desired outcomes.

“While this study provides some important new quantitative data, we also need more qualitative research about ethnic pay disparities. We need to look at why HR teams persist in not recruiting or promoting Māori and Pacific staff to senior roles,” she says.

“Furthermore, we need to understand from Māori and Pacific peoples why they are not necessarily putting themselves forward. Is it a matter of cultural safety or an absence of the appropriate skills and expertise?”

Higher education is a critical pathway into employment within the public sector, particularly for senior roles. Ensuring that Māori and Pacific peoples leave university with academic qualifications that enable them to be recruited to senior roles is part of the solution.

“We need to acknowledge and address everyday racism within Crown institutions. A system change approach is the most promising option, given that we know ad hoc diversity programmes are ineffective. Let’s name institutional racism and engage with this systemic challenge,” says Dr Came.

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