Straddling the Gender Pay Gap

Despite legislation and good intentions, we are a long way off from equal pay.

By Shelagh McNally

It’s 2016 and Canadian women make 27 per cent less than men. That means that for every dollar a man earns, a Canadian woman earns 73 cents. Still, that’s an improvement. In 1951, when Ontario passed the Female Employee’s Fair Remuneration Act, the gap was 49.5 per cent. In 1987, when Canada passed the Pay Equity Act, the gap was 36 per cent.

In the last ten years, pay equity has been mostly stagnant. The Status of Women has stated “when it comes to the salary gap between the sexes, women have hit a brick wall.” And compared to the international community, we are lagging behind. The United Nations has put Canada on notice for its “persistent inequalities between women and men.” Last year, the World Economic Forum gender-gap ranking put Canada at 30, well behind Rwanda, Nicaragua, Burundi, Slovenia, and Bolivia. In 2006, we were ranked at 14.

Why has progression stalled? How has the problem remained unsolved for over two generations? The roots for pay inequity run deep. And with a multitude of contributing factors, unraveling and addressing the issue is complicated.

Studies show the notorious second shift plays a part. According to Stats Canada, women spend an average of six hours a day doing childcare and housecleaning while men spend less than three hours.

“Women do a large share of unpaid work. This constrains their time for paid work hours so we see women taking part-time or shift work with flexible hours. These typically have lower wages,” said Kate McInturff, Ph.D. Senior Researcher, Canadian Centre for Policy Alternatives.

In 2013, 70 per cent of part-time, minimum-wage workers were women—a proportion that has not changed in 30 years.

The mommy penalty is another contributing factor. Research conducted at Cornell University by Shelley J. Correll found that working mothers were consistently rated as less promotable, offered lower starting salaries, viewed as less competent, less qualified, more distracted and less committed to the job.

Michelle Budig, a sociology professor at the University of Massachusetts found similar results in her 15-year study into the parenthood gap. Having children actually boosted a man’s earnings by six per cent, while decreasing a woman’s salary by four per cent for each child. The research company Payscale found women’s salaries stall at age 30—about the same time women start their families.

Another problem is the clustering of women into particular fields with chronic low pay—a phenomenon sometimes referred to as pink-collar work, or the Pink Ghetto. Typically health, education, management, public administration and social sciences all offer lower salaries than architecture, engineering, technology, mathematics, computer, and IT industries. Women make up only 9.2 per cent of those higher paying sectors.

“It’s hard to determine if these fields are underpaid because we undervalue the profession or if the low wages are because women are doing the work,” said McInturff.

Education doesn’t seem to be solving the problem either. The average a construction worker with a high school diploma (another male-dominated field) earns $44 thousand annually while an early education worker earns $20 thousand after completing a two-year degree.

According to the Council of Canadian Academies, women outnumber men as undergraduate and masters students and represent nearly half of all PhD students. However, they make up only 32.6 per cent of all faculty members and earn 4.5 per cent less than male professors.

While the disproportionate share of unpaid work, choices related to motherhood, and the Pink Ghetto all have a major impact, these factors aren’t enough to explain widespread wage inequality. Another cause has been singled out as deserving some blame: women themselves.

Some experts place the pay gap on the shoulders of women because we don’t negotiate for higher wages. The US National Bureau of Economic Research found that women only negotiate salary when it’s specifically stated in a job application whereas men negotiate for more money whether or not it’s an option.

However, salary negotiations may not be as straightforward for women as they are for men. Women working for minimum wage don’t have the luxury of negotiating a pay raise. Research at Harvard conducted by Linda Babcock found that female candidates were consistently penalized for starting negotiations. While men asking for raise were congratulated for being “straightforward leaders,” women were labeled “bitchy, aggressive, and greedy.” After negotiations ended, the women were often given lower work evaluations. Women who put the needs of the organization first while taking on the same outlook as their bosses were the most successful since they were perceived as “nicer and more caring.” Hannah Riley Bowles, a Senior Lecturer at Harvard Kennedy School, also found there were potential consequences for women when they do negotiate a raise—people don’t want to work with them.

“I don’t think we can shut down the gender pay gap by just focusing on individual women and their negotiating skills,” said Alex Johnston, Executive Director, Catalyst Canada. “The focal point has to be the organization and corporate culture.”

McInturff agrees it’s too much to ask young women with an entry-level position to bring up the gap. “It’s got to come from the company itself and senior women in a position to make policy,” she said.

Change may come because the gap is getting harder to ignore. In 2013, Catalyst published a report on MBA graduates from top business schools around the world after following their careers for several years. There was an undeniable global pattern: female MBAs automatically receive $4 thousand less than their male counterparts despite having the same degree, skill sets, and experience. In Canada the news was even more shocking. Our female MBAs earn $8,167 less, start out at lower job levels with fewer opportunities for mentoring, and receive fewer high-profile international postings.

Despite this dismal news, Johnston is optimistic about closing the gender pay gap in Canada. In fact, she believes we are closer than we have ever been.

“The conversation is much different that it was 20 years ago. We have the hard evidence and what are we going to do about it? There’s never been a better time for change with so much discussion going on. We’ve never been more aware of unconscious bias and patterns,” said Johnston.

While not a silver bullet, unconscious bias training is being touted as the best solution to the gender pay gap. It involves getting managers and bosses to recognize their blind spots when it comes to the workplace, pay, and evaluations.

“One reason there has been so little progress is that you first have to know that the problem exists. We see nice people making discriminatory decisions reluctant to admit to the problem,” says McInturff.

The Royal Bank of Canada, BC Hydro, and Deloitte are just a few of the companies offering the training. Perhaps, just as environmental responsibility became a cornerstone for healthy corporations, so to will programs tackling unconscious bias. Companies are realizing closing the gender pay gap creates a more productive work place.

Pay transparency is another solution being brought to the table. Opening up the books to see the black and white figures tends to bring change quickly. When McMaster University completed its two-year pay study, each female faculty members received a cheque for $3,515—the difference in pay.

Until the culture catches up, what can individual women do? Mostly stay positive. Both Johnston and McInturff agree playing the blame game is not productive.

“No high-functioning business can ignore this issue,” Johnston maintains. “It’s about pointing out the patterns and turning them into teachable moments to create inclusive leaders. Change is happening.”