New Zealand women's employment outcomes: the relationship between working shorter hours and low paid, female-dominated occupations
2. The Characteristics of Prime-aged Employees who Work Fewer than Full-time Hours
Hours of work, gender and low pay
Figure 5 below shows the highly different patterns of hours of work for prime-aged male and female employees. Particularly noticeable is how many prime-aged employees worked at least a 40-hour week. Nearly seven in 10 prime-aged workers (68.3%) - almost all prime-aged men (87.1%) and almost half of prime-aged women (48.7%) - worked 40 hours or more a week, and only a small proportion (13.3% of all prime-aged workers) worked between 30-40 hours a week.
Figure 5: Weekly hours of prime-aged male and female employees, March 2008
While prime-aged men with low hourly earnings were more likely to work short hours than all men, they were still predominantly full-time workers. On the other hand, nearly half of all prime-aged female employees worked less than 37 hours a week, and more than eight in 10 prime-aged employees working less than full-time were women.
Fewer low-paid females worked 37 hours or more a week than women on average, which points to the concentration of women with low hourly earnings amongst those who work fewer than full-time hours. While women are more likely than men to be amongst the 5% of the workforce with a second job, the small proportion of women second-job holders would not significantly alter the overall pattern.
An estimated 289,900 prime-aged employees worked less than 37 hours a week. An estimated 243,600 or 43.5% of all female employees aged 25-54 (37.2% of female employees aged 25-34, 48.1% of those aged 35-44 and 44.7% of those aged 45-54) worked less than 37 hours per week, compared to an estimated 46,300 or 8% of male employees aged 25-54. Of all female employees working less than 37 hours per week, 34.2% worked less than 20 hours per week, 36.9% worked more than 20 and less than 30 hours and 28.9% worked more than 30 and less than 40 hours.
In addition, the labour force participation rate for prime-aged women was more than 15 percentage points lower than the labour force participation rate of prime-aged men. In the March 2008 quarter, 76.1% of prime-aged women and almost all (91.6%) of prime-aged men were in the labour force.
Occupations where employees work less than full-time
Employees working less than full-time hours are concentrated in female-dominated occupations. In 2006, over half of women working part-time (30 hours or less) worked in jobs that were more than 70% female (Lynch, 2008). Figure 6 below shows that prime-aged women employees who work fewer than 37 hours a week were more heavily concentrated in the large occupational groups of clerks, and service and sales workers than are all women.
Figure 6: Occupational distribution of prime-aged employees March 2008
Less than full-time workers were more likely than women as a group to work in elementary occupations and in agriculture and fisheries. Prime-aged men who were employed less than full-time were also more likely to be in elementary occupations and service and sales, but also to be professionals or technicians/associate professionals.
Prime-aged women and men who worked less than full-time had similar proportions of their workforces employed as professionals or technical/associate professionals, but the proportion of all women in these jobs was higher than was the case for women working less than full-time. The opposite was true for men.
Figure 7: Ethnic composition of employees by gender, hours and low pay, March 2008
Being employed less than full-time and low pay
For both men and women, working less than a full-time week is associated with a higher probability of being low paid. An estimated 154,000 or 27.5% of all female employees aged 25-54 are low paid (on an hourly basis), but an estimated 94,400 or 38.7% of female employees aged 25-54 and working less than 37 hours are low paid. Smaller proportions of European women employees working less than 37 hours a week are low paid (36.6%) compared with European/Maori (41.4%), Maori (61.5%), Pacific (54%) and women of other ethnicities (40.9%).
An estimated 80,100 or 13.8% of all male employees aged 25-54 are low paid, and a higher proportion (40%) of male employees than female employees who work less than 37 hours per week are low paid, although there are very few men (an estimated 18,500) in the low-paid and less than full-time group. Employed Maori, Pacific and women of other ethnicities are more likely to work full-time than European women and are therefore a smaller proportion of the low paid, less than full-time female workforce than of the low-paid female workforce.
Hours of work, pay and the desire to work more hours
Figure 8 shows the prime-aged employees most likely to want to work more hours are men who work less than full-time (30.7%) - particularly men who work less than full-time and are low paid (39.4%). Nearly one in four women who are low paid and work less than full-time (22.9%) also want to work more hours. Overall, more prime-aged women (47,100) than prime-aged men (44,300) want to work more hours, which reflects the large numbers of prime-aged women who work less than full-time.
Figure 8: Proportion of prime-aged employees wanting more hours of work, March 2008
Hourly pay
Figure 9 shows the percentage of prime-aged male employees, prime-aged female employees and prime-aged females employed less that 37 hours a week who earn at different levels.
Figure 9: Distribution of hourly earnings of prime-aged employees, March 2008
The proportion of prime-aged male employees (7.7%) earning $50 an hour or more is nearly three times as high as the proportion of prime-aged female employees working less than 37 hours who earn $50 or more an hour (2.8%). Interestingly, over one in 12 female employees (8.9%) working less than 37 hours earned $30-50 an hour, although this was half the proportion of all prime-aged male employees earning at this level (17.8%).
At the low-paid end of the scale, 13.9% of prime-aged female employees working less than 37 hours, earned $12.50 or less per hour in March 2008 compared with 4% of prime-aged male employees. Nearly one in three (32.6%) of all prime-aged male employees earned between $20-30 per hour compared to just over one in five (21.2%) of prime-aged women working less than 37 hours a week. All up, a third (33.9%) of female employees working less that 37 hours a week earned $15 or less an hour compared with under a quarter (23.7%) of all prime-aged female employees and 11.6% of prime-aged male employees.
Hours of work and qualifications
The link between pay and qualifications is well established. Moreover, there is a substantial consensus in the literature that the premium paid for high-level skills will continue to rise. With more women gaining qualifications than ever, it is important to ensure that these women have access to jobs that fully use their skills.
Part of the reason for the lower average hourly earnings of prime-aged women who work less than full-time is that their qualifications profile differs from that of other prime-aged women. In particular, prime-aged women who work less than 37 hours are less likely than those who work longer hours to have a bachelor's degree or post-graduate qualification (19.7% compared to 30.4%) (Figure 10).
Figure 10: Highest qualifications of prime-aged employees, March 2008
The impact of qualifications on low pay
As Figure 11 shows, the lack of qualifications increases the likelihood of low pay for both men and women, whether they work full-time or not. However, qualifications are far less of a protection against low wages for prime-aged women than they are for prime-aged men. Figure 11 shows that, for female employees who work less than a full working week, higher than average levels of low pay is the norm except for those with a bachelor's degree or post-graduate degree. Even with university qualifications, 16% of prime-aged female employees are still low paid.[6]
Figure 11: Proportion of prime-aged employees who were low paid by qualifications, March 2008
Nearly two out of three (63%) of prime-aged women employees working less than 37 hours a week with no qualifications were low paid in March 2008 compared with 29% of prime-aged males with no qualifications and 40% of prime-aged females with no qualifications who were working 37 hours or more a week. Nearly half (47%) of prime-aged women employees working less than 37 hours a week with lower school qualifications (School Certificate or NCEA level 1) were low paid - three times the rate of prime-aged men with lower school qualifications (16%). Over a third (37%) of prime-aged females working less than full-time with vocational or trades qualifications were low paid - more than three times the rate of prime-aged men with these qualifications.
Other characteristics of prime-aged employees working less than full-time
Women working less than full-time have a similar distribution across the sectors as women working 37 hours or more. Women (57.3%) are less likely than men (71.5%) to be employees in the private sector, but this gender difference is less for those working less than 37 hours (56.6% women, 62.3% men) due largely to the men who work less than 37 hours being less likely to work in the private sector.
Both women and men working less than full-time were slightly more likely than all employees to work in workplaces or business units with less than 50 employees at the location, with women more likely than men to work in smaller workplaces. Low-paid women (87.2%) and women working less than full-time (88.2%) were slightly less likely than all female prime-aged employees (90.4%) to work daytime hours.
Temporary/permanent status of prime-aged employees
In March 2008, 7.2% of all prime-aged employees reported their jobs were temporary. This was significantly higher for women (9.7%) than men (4.8%). Male employees working less than 37 hours per week were the most likely to be temporary employees - 19.1% compared to 13.4% of all women and 17.6% of women who were low paid who worked less than 37 hours a week.
Employer-funded education and training
Working less than full-time and being low paid are associated with less training for prime-aged women (Figure 12). This is consistent with findings from the literature on low-paid and part-time work. At the extreme, the proportion of prime-aged men receiving employer-funded education or training in the last 12 months (35.7%) was double that of prime-aged women who were low paid and worked less than 37 hours a week. Most employees reported that they received no employer-funded study or training in the previous 12 months.
Figure 12: Proportion of prime-aged employees who received some employer provided training in the previous 12 months, March 2008
In terms of the time devoted to training, prime-aged men were more likely to receive training and had more days of training than prime-aged women.
Women who worked 37 hours or more had a slightly higher rate of training than men who worked 37 hours or more[7] and reported a similar distribution of training time, and therefore the overall gender difference is due to a lower volume of training among employees who work fewer than full-time hours who tend to be women. However, women who worked less than full-time were more likely than low-paid women to have received training - whether or not the latter groups worked full-time (Figure 13). Some of this lower incidence of training among women employed less than full-time and low-paid women is likely to be due to differences in employment continuity. Part-time and low-paid employees are less likely to work on a full-year basis than full-time and higher paid employees (Dixon, 2007).
Figure 13: Training received by prime-aged employees in the last 12 months, March 2008
Family and household circumstances
In March 2008, just over 40% of prime-aged employees (462,800 of 1,139,000) were parents or caregivers of at least one child under 14. Low-paid women (52.3%) and women working less than full-time (54.7%) were more likely than all female employees (39.8%) to be parents or caregivers. The reverse was true for men where all male employees (41.4%) were more likely to be parents or caregivers than low-paid men (33.7%) and men working less than full-time (33.5%).
Figure 15 demonstrates most low paid women are not in families with children and whilst most women working shorter hours have dependant children under 14l, a substantial proportion of this group do not. Female sole parents are more likely to be low paid and/or work less than full-time, than all prime-aged women.
Figure 14: Prime-aged employees parental status, partner status and whether partner is employed
Welfare, low pay and less than full-time employment
Low pay can discourage people from taking on employment by making employment or taking on extra hours of employment not worthwhile.
Studies of the children of working-age beneficiaries (the majority of whom are female sole parents) show that some parents are out of the workforce for significant periods. One in five children turning 15 in 2008 had been supported by a main benefit for seven or more years, with an estimated one in 10 children supported by a main benefit for 11 or more years (Wilson and Soughtton, 2009). Given the much higher labour force participation of sole parents with qualifications, part of the reason for so many sole parents to be out of work is likely to be the level of pay they can access.
Cycling in and out of low-paid work is also common. More than half of the Social Welfare beneficiaries who moved off benefit and into work in 2001/02 received some further benefit income in the 2 years following their move off benefit, and the group had relatively high levels of part-time and/or part-year employment, with many new jobs being short-lived. Non-beneficiaries who also had a background of no job or a low level of employment had slightly better but largely similar outcomes to those of the group who moved off benefit and into work. Changes in hourly wages were not possible to ascertain from the data set used (Dixon and Crichton, 2006).
As Figure 15 shows, 40.2% of prime-aged women who work less than full-time and are low paid are receiving some government transfer income, with nearly a quarter (23.9%) receiving income support from Work and Income (such as a benefit, family support payments or an Accommodation Supplement) to bolster their earnings, and 14.1% receive a working-age benefit.
Figure 15: Transfer payments, low pay and working less than full-time employment, June 2008 Income Survey data[8]
Overall, prime-aged female employees (3.7%) are four times as likely as prime-aged male employees (0.8%) to be receiving a benefit and around three times more likely to be receiving some welfare support from Work and Income (10.1% compared with 3.8%).
This data shows that low pay for prime-aged women is associated with more costs per employee to government in terms of welfare support and tax expenditures such as Working for Families.
[6] The relatively few (46,300) prime-aged men who work shorter hours are, on average, even more likely than women to be low paid if they have qualifications.
[7] 39% of women who worked 37 hours a week or more and 36% of men in this hours group received employer-funded study or training.
[8] June 2008 data was used as this was the closest Income Survey data to the March 2008 SoWL and HLFS data.
