Although the gender wage gap has been documented for decades, and despite initiatives such as Ontario’s Pay Equity Act, the Human Rights Code and other policy initiatives aimed at addressing the issue, little progress has been made. While the gap has decreased since the 1980s, progress began to slow in the 2000s. According to a 2017 Labour Force Survey, women working full time in Canada still earn $0.87 for every dollar earned by men. What accounts for this persistent gap?
Below, we’ve curated a primer of our best research and insights on this subject.
The gender wage gap is the difference between women and men’s pay. It can be measured in many different ways, but the most prominent are: by hourly earnings, weekly earnings, and annual income. Most people think the wage gap comes from women being paid unequally for the same work, but this only accounts for a small portion of the gap (~95 cents). The bigger source of the gap comes from “job segregation” where women end up working in lower paid job categories or industry sectors (this is the ~87 cents that most people talk about). For women of colour, that number decreases to 64 cents, and for transgender women it’s estimated to be even lower. Because more women than men work part-time, when comparing total annual wages, an even larger gender wage gap exists (~70 cents), primarily because women more often work part-time in order to accommodate care work responsibilities.
The gender wage gap matters not only because it’s a stark example of the gender inequity that still persists globally (even in more egalitarian countries such as Denmark or Iceland) but also because it has a tangible impact on the economic outcomes of many women. Lower earning power means many women are at risk of falling into poverty, particularly if they have children, and are less able to save for retirement leaving them especially vulnerable as they grow older.
We know that the gender wage gap is caused by a variety of factors: occupation (women tend to be employed in lower-wage occupations and lower-paid industries) and part-time vs. full-time work (more women than men work part-time). Many of these factors are driven by the “motherhood penalty,” where gendered expectations about care responsibilities push women into lower earning, more flexible roles (such as part-time work), keeping them from advancing to senior leadership. Direct gender (and racial) discrimination accounts for an estimated 10-15% of the gap.
As a result, it is unclear how effective pay equity and pay transparency legislation will be in closing the gap. To learn more about this, click here.
The gender wage gap varies by race and ethnicity. According to The 2011 National Household Survey, when full-time median employment income is analyzed there is a ~92 cent wage gap between visible and non-visible minority women and a ~72 cent wage gap between visible minority men and women. Earnings disparities are evident among transgender individuals as well. The 2011 Trans PULSE survey finds that while 71% of trans people in Ontario surveyed have at least some college or university education, about half make $15,000 per year or less.
One major cause of the wage gap is job segregation. A whole host of factors conspire to segregate women into occupational fields that pay less, such as childcare and retail. Within firms, this might mean that women end up in internal, back-office roles rather than external or revenue-producing roles. Women also confront a motherhood penalty. Mothers are perceived to be less competent, and the time they take off work to have children decelerates salary raises and promotions.
People looking to get ahead in their jobs must often work long hours, but the gendered allocation of family responsibilities prevents women from being able to do this, especially since women are more likely to be single parents than men. As a result, jobs requiring employees to work long hours produce some of the largest wage gaps.
Dionne Pohler on the gender wage gap and what we’re missing
In this video, Assistant Professor and GATE Faculty Research Fellow, Dionne Pohler explains the origins of the gender wage gap, and why she thinks a basic income guarantee could be one solution, of many.