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January 9, 2020 – Wage gaps between men and women and white, Indigenous, and visible minority groups persist, despite a wide range of federal and provincial legislation intended to close them, according to a new report from the C.D. Howe Institute.

In “A Work in Progress: Measuring Wage Gaps for Women and Minorities in the Canadian Labour Market,” authors Tammy Schirle and Moyosoreoluwa Sogaolu provide figures for wage disparities that persist among groups working full-time in the private sector.

The report finds that the hourly wage gap between men and women in 2019 was still 19 percent, although down from 27 percent in 2000. According to Schirle and Sogaolu, a large part of the gap is attributable to differences in men’s and women’s job characteristics. For example, men in the private sector are more heavily represented in higher-wage industries like oil and gas, while women are more heavily represented in lower-wage industries such as retail services or accommodation and food services.

The authors go on to compare the 2015 annual earnings of Canadian-born men and women who are white, Indigenous, and members of visible minority groups. The estimates suggest that white women (working full-time, full-year) earned roughly 30 percent less than white men. Visible minority women earned 17 percent less, and Indigenous women earned 44 percent less than white men. The gap between white men and visible minority men is smaller, at 8 percent, as is the gap between white and Indigenous men (at 18 percent).

After adjusting earnings gaps to account for group differences in demographic and job characteristics (including education, industry, and occupation), there remain substantial gaps between Canadian-born white men and all other groups of Canadian-born men and women with similar characteristics.

The authors also examine earning gaps for recent immigrants who landed in the previous 10 years or less. When adjusted for education and select job characteristics, the earnings of all visible minority men are lower than those for white men, and adjusted gaps are larger than the unadjusted gaps, most substantially so among recent immigrant visible minority men (40 percent).

Some of the difference in average earnings between white men and racialized groups of men and women can be explained by inter-group differences in various characteristics that are valued in the labour market, note the authors. For example, part of the difference in average earnings between white men and Indigenous men relates to differences in educational attainment. “However, the adjusted gaps reflect the gap that remains unexplained, and we see that differences in human capital investment (education and training) do not help explain differences between white men and all other visible minority groups of men and women,” said Schirle.

 “Pay equity legislation has generally been ineffective in the private sector, as comparisons across male- and female-dominated job classes at the same company can be challenging” said Schirle. “Employment equity legislation could work to improve representation of women, Indigenous peoples, and visible minority groups in higher-paying occupations. However, the existing Employment Equity Act only applies to workers in federally regulated firms, who represent a small fraction of private-sector workers. When you take this into consideration, the shortcomings of such policies start to become apparent."

“Some progress has been made in the last two decades,” Schirle added, “but it’s an enduring problem. Policymakers should look at boosting access to child and elder care as well as incentives for both parents to use job-protected parental leaves. Policy must also be directed towards improving education and training opportunities across fields in which women, Indigenous peoples and members of visible minority groups are underrepresented.”

Read the Full Report

For more information contact Tammy Schirle, Professor of Economics, Wilfrid Laurier University; or David Blackwood, Communications Officer, the C.D. Howe Institute at 416-865-1904 ext. 9997 or dblackwood@cdhowe.org

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada's most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.