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Why pay equalisation is bad news for women

By Kris Sayce - posted Wednesday, 10 March 2010


Again, whether you like it or not, many male employees are likely to think it “unfair” if they're getting paid the same wage as a female employee who takes six month's maternity leave, or is away once a fortnight to take care of a sick child.

Or if you want more stereotypes - doesn't work on the weekend, or in the evenings, or has to pick the kids up from school, etc ...

We all know that's a stereotypical view of the female employee, but the fact remains that the majority of male employees are likely to have those thoughts, even if they're new age metrosexuals.

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The consequent knock-on effect of pay equalisation is that it could harm the employment prospects for prospective female employees. How so?

For a start it could mean fewer female employees are employed by businesses. If there is still the perception that male employees expect a higher rate of pay to female employees then it's possible that employers will be less inclined to employ females on the same wage.

The other potential knock-on effect is that male employees shift employment to workplaces that offer higher wages, pushing out higher paid female employees.

We note an article from The Age newspaper last year, "Male teachers shifting schools". According to the article:

Educators were perplexed about the drift of male teachers to non-government schools ... Australian Education Union president Angelo Gavrielatos was equally puzzled ...

Reasons they give is that perhaps male teachers are being enticed to private schools at the expense of public schools.

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Again, we have no idea whether that's true or not. The article quotes Independent Schools Council executive director Bill Daniels, "It's not a concerted effort by us and I can't imagine why the figures would be that way".

Well, one potential reason is the phenomenon we've mentioned above. That male employees are conditioned to expect a higher wage than female employees. If the state schools system mandates equal pay for male and female teachers, and male teachers consider it to be “unfair” then surely there's a greater chance that male teachers will seek higher paying jobs.

One way of doing that is to seek employment in the private education sector where wages are usually higher.

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First published by Money Morning on March 9, 2010.



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About the Author

Kris Sayce is editor of Money Morning. He began his financial career in the City of London as a broker specializing in small cap stocks listed on London’s Alternative Investment Market (AIM). At one of Australia’s leading wealth management firms, Kris was a fully accredited adviser in Shares, Options and Warrants, and Foreign Exchange. Kris was instrumental in helping to establish the Australian version of the Daily Reckoning e-newsletter in 2005. In late 2006, he joined the Melbourne team of the leading CFD provider in Australia.

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