This piece is part of Apolitical’s spotlight series on the care economy, in partnership with the Wilson Center. It also appears in our public health newsfeed.
Updated | Kristine Bartlett started working as a caregiver 25 years ago. The owner of the motel she worked at, in Lower Hutt, New Zealand, decided to turn it into an old-age home. She made $9.95 (US$6.91) an hour. Nearly a quarter-century later, she still earned just above minimum wage — until last year, when she got a 45% pay rise.
Bartlett, 68, was the plaintiff in and public face of a landmark equal pay court case, brought by New Zealand’s service and manufacturing union E tū, and based on a 1972 Equal Pay Law that requires employers to pay female and male workers equally for work of an equal value.
The union argued that due to gender biases, care and support workers have historically been underpaid relative to the skills, effort and responsibility care work entails. It resulted in a $2.06billion (US$1.4billion) negotiated settlement that will bring Bartlett and thousands of other home care workers substantial pay rises.
The deal sought to correct one major driver of the pay gap between women and men — occupational segregation. It did so by raising wages for care workers to the level of those paid for similar types of work performed mostly by men. It also mandated employers to support workers in achieving formal qualifications that recognise their skills and move them along a clearly defined career path.
The settlement was the first step towards addressing this historic inequality, and has sparked a wave of other claims from female-dominated professions such as librarians and school support staff.
Everyone on the same page
The case was brought in 2012 by Bartlett and the union against her employer, Terranova Homes and Care Limited. Terranova was joined by the New Zealand Aged Care Association (NZACA), the national group that represents the country’s residential care homes. Bartlett alleged caregivers are paid below what a rate might be if this work were not performed by women; Terranova responded that it paid its four male employees the same as its 106 female employees.
“The settlement was the first step towards addressing a historic inequality”
The courts repeatedly found in Bartlett’s favour, ruling that any final legal decision should take into account the pay levels of men in other industries, not just what men in Bartlett’s own industry make.
But by 2015, the union, the employers and the government (which contracts with and funds privately operated care homes), moved to an out-of-court settlement process. Employers and the state were keen to avoid a court judgement that would slap a dollar amount on the value of caregivers’ work without their input, and the unions wanted to get a pay rise as soon as possible, and feared the legal process could drag on.
The three parties were more or less on the same page in agreeing that care workers deserved higher earnings, so the devil was in the details.
The union had gone into negotiations with a target of $26.00 (US$18.07) per hour for all workers in aged residential care and home and community support. The funding would come from government coffers, since the government contracts with care providers. Employers wanted government funding to cover the increased wages fully.
The negotiations began in 2015 with the three parties — employers, unions and the government — at the table. The following year, the tripartite talks split into two bilateral channels, with employers working directly with the government on funding concerns, and the unions focusing on wages and qualifications.
The legal basis for identifying an equitable wage in New Zealand — that is, equal to a similar job done mostly by men — is to examine a job purely based on the skills, responsibilities, conditions and degrees of effort required, divorcing it from historic associations with one or another gender.
In theory, that means identifying “comparators”: majority-male jobs with comparable levels of effort, skill, and responsibility.
Those comparators were largely ignored during the negotiation, since the unions knew what they wanted. The comparators would come back into play only if negotiations failed and the matter was settled in court. Identifying comparators is also a useful theoretical exercise when trying to understand how gender bias affects the value of certain jobs.
But the negotiations were more focused on the unions and the government trying to find an agreement that would both give the workers a significant pay hike and still be affordable.
In negotiations between the representatives of employers and the government, the key issue was whether the latter, which pays private companies and non-profits to perform care services, would increase funding enough to cover the employers’ costs of higher wages.
Julie Haggie, CEO of the Home and Community Health Association (HCHA), said that concern was especially acute for the providers she represents, who take care of people in their homes or in their communities. Their funding and contractual arrangements with the government are more piecemeal than the residential care sector, and they support more clients.
“Pay equity is not a scientific process that will give you a universal truth”
To understand how proposed pay increases would impact this workforce, the Ministry of Health gathered an enormous amount of information on workers’ actual wages and hours. It modelled the funding that it would need to provide under the unions’ proposed wages. It was a complex exercise.
“Because there are so many variations across the country in terms of what’s paid in the contract, we had to do it on more of a complicated, actuals basis,” Haggie said.
In the final settlement between the unions and the government, signed in May 2017 and passed into law the following month, care workers from three sectors — aged residential, disability and home- and community-based support — received the same wages. The settlement also resulted in recognition of their skills and tenure and provided a way for them to increase their wages by gaining formal qualifications. The agreement will be extended to include mental health and addiction care workers from July this year.
Starting July 1, 2017, they began receiving $19.00 (US$13.20) an hour for Level 0 workers, moving up to $23.50 (US$16.33) an hour for Level 4. The wages rise incrementally each year, reaching a top rate of $27.00 (US$18.76) an hour for Level 4 workers in July 2021. In 2022, the settlement expires and the union may seek to renegotiate.
Too many skills?
Skills and qualifications were one area in which both the unions and the government agreed there should be more formal recognition and support for workers to continue their training.
The union saw undervaluation of care work as tied up with the lack of formal credentials. Government negotiators also recognised the aged care sector workforce must be equipped to handle the increasingly complex needs of New Zealand’s population.
They arrived at a two-tiered system to address both new and incoming workers, and highly experienced workers who had not achieved formal qualifications due to what John Ryall, assistant national secretary of E tū and the lead negotiator on the union’s behalf, said was a lack of support from employers.
Both Haggie and NZACA CEO Simon Wallace said the employers feared not being able to match staffing levels with their workforce needs, and were seeking some sort of lever of control when they were still part of the negotiation process.
That ultimately didn’t make it into the settlement, and Wallace said employers now have more workers with Level 4 qualifications, the highest possible, than they actually need. The settlement had been based on a projection of 14% of workers having Level 4 qualifications. But less than a year on, that number is near 26%, according to employment survey data supplied by Wallace, more than double what it was in July 2017 when the settlement went into effect.
Lower turnover, still very few men
Both employer and union representatives said raising wages had led to lower turnover in the workforce.
Haggie also noted that many women in the field are ageing out of the workforce themselves, and the sector as a whole faces a recruitment challenge. The higher wages have not succeeded in attracting more young people to the profession, nor men, Wallace and Haggie said.
The success of the settlement set a precedent for others in related fields. Ryall said E tū had also successfully completed a settlement for about 3,500 disability vocational workers and another for 3,800 community mental health support workers.
There have been a few hiccups in the first year of implementation. A few small residential care homes, mostly in rural areas, closed down. In part that’s because the per-bed “averaging” system in the funding agreement between the ACA and the government is less advantageous to small homes with fewer beds and lower occupancy rates, and in part because these homes have a higher share of Level 4 caregivers than other facilities due to long-serving staff, Wallace said.
Wallace added that the second year of funding will account for the higher-than-expected share of top-earning care workers, and expects fewer financial difficulties for his members as a result.
Ryall said the union is closely watching how employers implement the settlement, noting that some had tried to pressure higher-paid workers to leave or tried to change job titles to get out of the settlement. And Wallace remains concerned about the long-term effect of having more costly Level 4 workers than employers deem necessary.
Ryall said the union was fortunate to have, in the government, an interlocutor genuinely interested in reaching a satisfactory conclusion. Minister for Women Julie Genter said ensuring all women are paid fairly is one of her top priorities, despite it posing a fiscal challenge in cases where the government is the funder.
Ryall also advised others seeking to achieve similar results to think broadly about what “equity” means in context, as the skills and responsibilities involved in jobs are constantly changing.
“It is important not to get too bogged down with comparators and believing that pay equity is a scientific process that will give you a universal truth,” he said.
As for Bartlett, she received a private settlement from the government, separate from the sector-wide $2.06 billion one. Both Kiwibank and Next, a women’s magazine, named her New Zealander of the Year. But her biggest satisfaction is having helped raise wages on behalf of her hard-working peers, who she refers to as “the girls.”
“From $14 to that jump is absolutely… it’s just incredible,” she said. “And the girls are all happy with it, so yeah, I’m happy.” — Anna Louie Sussman
This article has been amended to clarify which agreement contained the per-bed “averaging” system.