Gender wage gap is decreasing … but is it decreasing enough?

January 14, 2011 Christina Catenacci Human Resources

I just read a Statistics Canada report stating that the gender wage gap has recently been decreasing. The report briefly noted that between 1988 and 2008, the wage gap narrowed throughout the wage distribution. However, the gap shrank the most at the lowest end of the wage distribution and shrank the least at the upper end. Also, although women dramatically increased their representation in high-wage occupations such as management, there were still significant gender wage gaps within these occupations. Further, the wage gap among university graduates remained at 16 percent over the 1998 to 2008 period. In a nutshell, I think we still have a long way to go.

I have addressed this issue before, seen here, here and here. Essentially, the reports discussed in my previous blogs suggest that women remain underrepresented relative to their male counterparts despite the fact that they form a highly educated and skilled labour pool. This is especially true in the case of women in higher level management and professional positions. And let’s not forget that the earned income gap has been attributed to motherhood and workforce attitudes about motherhood, whereby women appear to face wage penalties that have nothing to do with their skills, education and experience. These findings are not at odds with this new StatsCan report.

Some good news coming out of the study was that within the younger worker groups, there were less significant differences in gender wage gaps. This means that attitudes may be starting to change…but still, in my view, we have a long way to go.

The study aimed to determine some of the reasons the gender wage gap has been decreasing. Suggested reasons include:

• Female workers are not yet in upper management positions because they first had to show increased representation in lower-level positions before transitioning into management
• In terms of education, there are persistent differences in the fields of study chosen by men and women; women are still choosing fields such as education and the humanities rather than male-dominated fields such as mathematics and engineering
• When examining real wages on an hourly basis, the gap decreased
• The Canadian economy experienced structural changes such as the shift away from manufacturing jobs, and this had a significant impact on the unionization rates which led to the lower earning power of men
• While women’s real wages were increasing, men’s real wages were only minimally increasing or declining
• Since older men are much less likely to hold management jobs in 2008 than their 1988 counterparts, and since managers generally earn higher wages, there was a significant decline in the gender pay gap
• The wages of men and women in age cohorts stopped diverging as they aged, and this could be attributed to differing career paths: first, as women’s children age, they may be able to devote more time and energy to the paid labour market by accepting promotions or acquiring training; second, female workers have traditionally been viewed as more likely to quit and be absent from work, but since evidence has shown that there is little gender difference in permanent quit rates and absenteeism, the wage gap within a given cohort may have narrowed or remained stagnant since quits and absenteeism could no longer be viewed as important explanations for women’s lower wages
• For younger workers, the increasing educational attainment of younger women and their move to higher-paying occupations like health and education accounted for a significant narrowing of the gender wage gap
• The correlation between the wage gap and age has always been present, but it has weakened with each successive year (there is less of a gap with younger workers); this suggests a “cohort replacement effect”, whereby as younger cohorts replaced older ones, the overall gap declined simply because the gap was smaller in new cohorts than in those that preceded them

What do you think?

Christina Catenacci
First Reference Human Resources and Compliance Editor

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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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age cohorts, career paths, cohort replacement effect, compensation plan, compensation planning, Employment equity, gender wage gap, income gap, Statistics Canada, Stats Canada, stereotypes, wage distribution, wage gap, Wage inequality

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