Mind the migrant pay gap

Workplaces need to address the bias and barriers to equality faced by migrants in New Zealand. By Maretha Smit.

If you were an engineer working in New Zealand in 2018, your place of birth could have made a $10,000 difference to what you earned.
Pay gaps relating to gender, ethnicity, age and disability have generated significant discussion in New Zealand in recent years but very little research has been done in the migrant space until recently.

Last year Diversity Works New Zealand commissioned a report that looked into labour market outcomes for different migrant groups in our working population.

It revealed that, on the whole, there seems to be equity between migrants and non-migrants – which means that there is no overall pay gap between workers born in New Zealand and workers born overseas.

But the same can’t be said for equity between migrant groups based on country of birth.

In 2018, engineering professionals from the UK, South Africa, and Northern America all earned an average wage above $45 an hour. In contrast, engineering professionals from India, China, and Polynesia all had hourly wages below $40.

These findings were not limited to the engineering profession – across most industries, migrants from South Africa, Northern America, the United Kingdom, and the rest of Europe all earned a higher average hourly wage than migrants from Asia, the rest of the Americas, Polynesia, Melanesia, and Micronesia.

Even when the data was adjusted to compare migrants with similar levels of skills, English language ability, time spent in New Zealand and age, those born in places like Asia and South America earn significantly lower average wages than migrants from Europe and Northern America.

Our migrant pay gap study, undertaken by business and economic research experts BERL, was only a first look at the data – it raises more questions than answers and further research into this issue needs to be done.

But what it does do is afford us the opportunity to look at the barriers and bias that are factors in these inequities and what organisations can do to mitigate their impact.

There are many contributing causes to pay gaps including the level of skill required to do particular jobs and the opportunity for people from specific groups to enter into leadership roles. Migrants from non-western countries face barriers with respect to both of these.

Barriers to moving into leadership are often those caused by bias and discrimination.

At the core of unconscious bias is the notion that we are all predisposed to being more accepting of people who look like us and think like us.

In a country that takes a predominantly western approach to business, one of the final frontiers to removing these barriers is our ability to accept into our workplace circles of safety people with a totally different culture and a different way of thinking to our own.

Leaders need to address bias at a personal and organisational level as one of the foundational steps in creating an inclusive workplace. This is not a quick fix – it requires an ongoing commitment and is integral to the work our organisation does with workplaces across the private and public sector.

When it comes to being appointed to highly paid, highly skilled jobs, migrants come up against systemic and institutional barriers, including recognition of qualifications through professional bodies.

Migrants from English speaking, Western countries can transfer their qualifications to the New Zealand labour market more easily than migrants from other countries, which is something that needs to be addressed.

Many migrants don’t get sufficient support to attain a level of English language proficiency required in a New Zealand workplace.
Immigration settings and the inequities introduced by means of various visa types also have a role to play.

Fees to study in New Zealand, for instance, are higher for those on certain visas, which may impact an organisation’s ability to support a worker to further their knowledge and skills. Our visa and immigration settings shouldn’t impact an organisation’s ability to be inclusive.

Lack of pay transparency, particularly during the recruiting process, is another contributing factor – allowing migrants to see pay bands for roles they are qualified to fill may counteract a cultural reluctance to negotiate a fair salary for the job being offered.

We cannot ignore the fact that the New Zealand experience is simply part of a story of global inequity. Much like other Western countries we are, in essence, importing a pay gap in relation to certain communities – we turn to our traditional trading partners to bring in highly skilled workers but rely on non-western countries to fill other talent shortages.

More than a quarter of our population, and nearly 39 percent of our working age population, was born overseas as of the 2018 Census. Our migrant cohort is extremely diverse and brings a wide variety of skills to our labour pool.

We can do so much better by these migrants and by the industries that rely on a migrant workforce. By addressing the institutional barriers that drive these inequities, we can become an example of best practice to countries across the world that are currently grappling with this as a matter of social cohesion and sustainability.  

Maretha Smit is the chief executive of Diversity Works New Zealand.

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