Canada's Gender Wage Gap is Shrinking

With the release of the latest data on the pay gap between men and women in Canada, there's good news and not-so-good news.

On the upside, the gender wage gap is shrinking. In 20 years, from 1998 to 2018, the gender gap in hourly wages has declined by 5.5 percentage points — from 18.8 per cent to 13.3 per cent.

On the downside, there's still a gap.

According to the data, women between the core working ages of 25 to 54 earned $26.92 per hour in 2018, while men in the same group earned $31.05 — a $4.13 hourly difference. Put another way, women earned just 87 cents for every dollar men did in 2018.

"Given that women in Canada have surpassed men in educational attainment, diversified their fields of study at post-secondary institutions, and increased their representation in higher-status occupations, the persistence of gender-based wage inequality warrants continued attention," the researchers said.

The research report, released by Statistics Canada on Oct. 7, identifies a number of factors related to both the narrowing of the gap and the continued existence of the gap. Overall, the report attributed the narrowed gap largely to changes in the distribution of men and women across occupations, higher educational achievements by women and a reduced number of men in unionized jobs. On the flip side, researchers said the gap still exists largely because of the distribution of women and men across industries and a higher portion of women holding part-time work.

Let's take a closer look at a few of the factors.

Higher Education

According to the latest data, women overall are now more educated than men — a factor that contributed to the smaller gap. Compared with 20 years ago, more women now hold at least a bachelor's degree versus their male counterparts. Since workers with higher education earn more on average, Statistics Canada said the increase in educational attainment by women accounted for 12.7 per cent of the decline in the gender pay gap since 1998.

Career Choice

Despite the gains made in education, the statistics show that career and industry choice are big factors working against women when it comes to higher wages. Some occupations have boosted women's average earnings, such as those in law, social, community and government services, education, business and financial services. However, women lost ground in other occupations, including natural and applied sciences, administration and financial supervision. Here, men not only outnumbered women, but also saw faster wage growth. Women also lost out in high-paying sectors such as construction, manufacturing, mining, quarrying and oil and gas extraction, all of which tend to be male-dominated.

The Hours

According to the data, women are more likely to work on a part-time basis compared to men, an ongoing contributing factor to the gap. While that data shows fewer women worked part-time in 2018 (16 per cent) than 1998 (21 per cent), more than three-quarters of part-time workers are still women.

Union Coverage

Researchers said part of the reason for the narrowing of the gap is because men's earnings are coming under pressure. The number of men employed in union jobs decreased, especially in manufacturing which saw a slump during this reporting period, while the proportion for women — typically in healthcare, social assistance, and education — was stable.

The researchers noted that since union coverage usually means higher average wages, the decrease in the proportion of men with union coverage was a factor in the shrinking gender wage gap.

Did you know...

According to the World Economic Forum's 2018 Global Gender Gap Report, the most challenging gender gaps to close are those related to economics and political empowerment. On the economic front, the World Economic Forum projects it will take 202 years to close the economic gap between men and women globally.