The long struggle for pay justice just got longer

As someone who has spent a fair amount of my adult life working for social and economic justice, fairness and equality, my heart absolutely sunk to read the article Public agencies ‘finding it unaffordable to increase pay ranges’.

There is a lot within this article that is deeply concerning, and I want to cover it all. I think it’s crucial we hold a spotlight up to what is happening here and its ideological underpinnings. Asking the right questions of those in power is particularly important at this time.

Misleading language

The comments from the Public Service Commissioner Sir Brian Roche paint a picture of a demanding and overindulged Public Service workforce. Consider the following statement from the Commissioner:

“Tenure based pay progression is the most acute: even without budget guidance agencies are finding it unaffordable to increase pay ranges in addition to the increases generated by existing tenure-based pay progression”

This comment gives the impression that workers are somehow double dipping in the pay they receive and how it increases. This is an easy story to tell if you don’t look closer at what is actually going on. Pay movements in collective agreements usually cover two things:

1) Annual adjustments to the pay range

This adjustment ensures that the value of the current salary is not lost. Negotiations will usually agree a percentage change that is in line with inflation or as close to as is possible. This is not a pay increase. Annual adjustments prevent or limit a real world decrease in pay. Simply put, if these adjustments were not present in collectives every year you work the money you earn would buy you less.

2) Tenure based step increase

Tenure based pay sounds fancy and like an enormous privilege. However, in practice it’s pretty much common sense. When you enter a job, you get placed onto the step that best reflects your current skill and experience. If you continue working in that job, you will continue to grow and learn, becoming more proficient. Annual steps reflect the fact that you become more experienced and knowledgeable, adding more value to your workplace. It is about fair and reasonable compensation for skill, responsibility, effort and experience. As employees “continue to enjoy pay increases until they reach the salary maximum” so do employers enjoy employees who are more skilled, experienced and responsible. This is not a one-way bargain.

Sir Roche also comments that

“…the pay progression scale has no employer discretion to limit who may or may not receive it”

This is partly true, for good reasons as I will touch on next. Sir Roche’s comment, however, implies a state of affairs where employers are having to increase the pay of poor performers and are helpless to do anything about this. This is a common false narrative. Firstly, many tenure-based pay systems have clauses which postpone movement up the pay scale for those on an active performance management plan. This allows the employer and employee to work through any performance issues prior to the pay movement. Secondly, there is a wealth of evidence which demonstrates that attempting to manage performance through pay is ultimately ineffective. It can enhance stress and pressure on the employee while ignoring the real causes of poor performance. Evidence shows that employees work more effectively when they are supported to develop and improve.

Leaping backwards on gender and ethnic pay gaps

The limits that tenure-based pay system place does place on employer discretion are in fact completely by design. Discretion, or the ability for managers to make their own choices about who does or does not receive a pay increase allows space for bias and discrimination to be part of decision making. The more discretion, the greater the chance gender and ethnic pay gaps will be created or exacerbated.

The Commissions own guidance on remuneration states that

“Remuneration frameworks with fixed salaries for entry and prescribed progression within roles involve limited discretion and high levels of transparency and, therefore, gender and other forms of bias are unlikely to influence salaries.”

“Remuneration frameworks involving higher levels of discretion are more prone to bias”.

So, it seems clear that we know and agree that tenure-based pay systems are a key part of an evidence-based solution to gender and ethnic pay gaps. Yet these tools are coming under pressure once again. It is startling that the Commission claims that you can remove or limit tenure-based pay and “manage any risks regarding discretionary increases”. It is akin to claiming that we can remove the guardrails on a swing bridge and just ‘be careful’. We know that the guardrails work, people have taken great care to build them and make them useable- why would we take them away?

The great myth of affordability

It cannot be ignored that tenure-based pay systems are under the microscope “because they are unaffordable.” What is really meant by this? ‘Unaffordable’ in this context is not a question of whether the Government does or does not have funds available. Rather it is a statement about what the Government values. That is where the line of affordability and unaffordability is truly drawn. Tax cuts for landlords is an example of something that is valued and therefore was deemed affordable. Unaffordable therefore really means deliberately underfunded and I encourage you to reread the article with this in mind.

I’ll leave you to contemplate whether exerting pressure on key structures that help close gender and ethnic pay gaps is acceptable in order to fund things they value more highly. Whether it is ok to ask women and people of colour to wait yet again for pay justice in service of ‘affordability’

My own answer is absolutely not, and Work Ethics will be continuing to work for social and economic justice and stand with all those doing the same.