Gender wage gap has not been closing: Report to the Ontario government

September 8, 2016 Christina Catenacci Accessibility Standards, Employee Relations, Employment/Labour Standards, Health and Safety, HR Policies and Procedures, Human Resources, Human Rights, Payroll, Recruiting and Hiring, Standard for Employment, Training and Development, Union Relations, Wages and Compensation

The gender wage gap steering committee recently submitted its final report to the Ontario government (Minister of Labour, Minister Responsible for Women’s Issues)—the main finding was that the gender wage gap has not been closing and the government must take action. Further, the committee stated that there is much that employers can do immediately in order to ameliorate the situation.

As can be seen from the committee’s 2015 background paper to the Minister of Labour,
there is no question that gender wage gap exists—the committee concluded that although women in Ontario have made significant progress in labour force participation and education, they still: earn less than men; are over–represented in lower paying occupations; are in disproportionately more minimum wage and part–time positions, and are underrepresented in many high paying jobs that have been traditionally male–dominated. The committee found that the key factors associated with the gender wage gap involve discrimination, occupational segregation, caregiving, workplace culture, and education.

In the recent 2016 report, the committee provided recommendations on how to address the issue. But first, the committee made the economic case for closing the gender wage gap. More specifically, the committee pointed out that by addressing the barriers that limit women’s full contribution to the economy, society benefits, including increases in consumer spending and tax revenue, decreases in social spending and health care costs, and getting a better return on investments in education. In fact, the committee stated that by not taking any action, Ontario will experience higher costs.

How big is Ontario’s gap? According to Statistics Canada, it is: 14 percent (average hourly wages); 25 percent (average annual earnings, full–time, full–year workers); 29 percent (average annual earnings for all earners including full–time, full–year, seasonal and part–time workers).

What does this mean? According to the committee’s expert report, a qualified working woman who has same socio–economic and demographic characteristics (education level, age, marital status), and experience in the workplace (job status, occupation, and sector) as a man, on average receives $7,200 less pay per year. Doing the math, this amounts to $18 billion of foregone income per year for all working women in Ontario (about 2.5 percent of Ontario’s annual Gross Domestic Product). Moreover, the expert approximated that closing the gap could lead to revenues from personal and sales tax that increase by $2.6 billion. They also estimated that government spending on social assistance, tax credits, and child benefits could decrease by $103 million, due to the projected increase in families’ income.

If that were not enough, the committee also pointed out that there is a human rights case for addressing gender inequality given international human rights conventions that affect Canada (including the International Labour Organization Convention 100, the Convention Concerning Equal Remuneration for Men and Women of Work of Equal Value, and the United Nations’ Convention on Elimination of All Forms of Discrimination Against Women), along with the country’s own legislation. In Ontario alone, there are several statutes that are engaged, including the Human Rights Code; Equal Pay for Equal Work provisions of the Employment Standards Act; Workplace Violence and Harassment provisions of the Occupational Health and Safety Act; Pay Equity Act; and the Accessibility for Ontarian’s with Disabilities Act.

In the past, the gender wage gap was attributed to women having less education; however, in recent years, there have been significant increases in women’s levels of education and there is still a gender wage gap. Simply put, other factors are involved, including gender stereotyping, bias that is conscious or unconscious, and discrimination. In fact, the committee pointed out that, when women enter male–dominated fields, their pay decreases. Correspondingly, in jobs where the pay is more and the prestige is higher, men outnumber women. Societal gender norms and biases appear to influence the value of jobs and wages more than a one’s personal career choice.

Some of the main problems highlighted in the research involve: there are insufficient options for child and elder care causing women to perform more unpaid caregiving and less paid work; the sectors and jobs where women and men work are differently valued (with work done by women being undervalued); and there is gender bias and discrimination (intentional or unintentional) in business practices that can prevent women from achieving their full economic potential.

Recommendations

The recommendations are grouped into five parts. The first is balancing work and caregiving. Recommendations in this category involve investing in child care, providing support for elder care, and allowing for parental shared leave policy.

The second concerns valuing work. Recommendations involve simplifying pay equity laws and addressing female–dominated sectors and pay equity.

The third involves workplace practices. Recommendations in this part include increasing pay transparency, performing a gender workplace analysis, and having more women on boards.

The fourth is challenging gender stereotypes. Recommendations involve raising social awareness, improving education and career development, and expanding skills training opportunities.

The fifth entails other ways the government can close the gender wage gap. Recommendations in this category involve performing a gender–based analysis, examining government contracts and procurement, and providing help accessing employment standards, pay equity, and anti–discrimination laws.

In the conclusion of the report, the committee stated:

This report is a call to action.

The Ontario government tasked the Steering Committee with developing recommendations for a wage gap strategy to close the gap between women and men in the context of the 21st century economy…

Of necessity, government will have to lead many of these recommendations, but this is not a strategy that can be accomplished by government alone.

There is much that employers can do immediately, they should publicly commit to:

Close gender wage gaps in their organizations, and begin to take corrective action;

Create respectful workplaces, free of violence and harassment; and,

Show leadership in promoting pay transparency.

Consequently, the report calls employers to action as well—is highly recommended that employers review their policies to ensure that everything is being done to create respectful workplace that is free of violence and harassment. Further, it is important to have policies allowing for transparency so that things can be scrutinized and corrective action can be taken if there are any issues. Employers who are leaders in this area also have the advantage of having a more progressive workplace, which is a major selling point for the best employees. Employers who take steps to improve the workplace in this regard may actually find that their workplace experiences greater morale, less turnover, and a more productive workforce.

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Christina Catenacci

Christina Catenacci, BA, LLB, LLM, was called to the Ontario Bar in 2002 and has since been a member of the Ontario Bar Association. Christina worked as an editor with First Reference between February 2005 and August 2015, working on publications including The Human Resources Advisor (Ontario, Western and Atlantic editions), HRinfodesk discussing topics in Labour and Employment Law. Christina has decided to pursue a PhD at the University of Western Ontario beginning in the fall of 2015. Read more

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