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The Gender Pay Gap has been making headlines for decades – so how much progress has been made?

By Liz Bernier

Seventy-four cents on the dollar. That’s a figure cited almost endlessly in conversation about the Gender Pay Gap. For every dollar earned by a male worker, a female worker earns an average of 74 cents.

That infamous stat was born of a 2011 Statistics Canada report, which found that the gender wage gap in Ontario was 26 per cent for full-time, full-year workers (a.k.a., 74 cents). It’s become a two-digit indictment of the institutionalized barriers to gender parity in the workplace.

But fortunately, we’re not on a fixed income here.

That stat has seen some positive movement over the past few years. More recent Statistics Canada data – this time, from 2015 – puts the figure at about 87 cents nationally for full-time, full-year workers: so for every male-earned dollar, women are now pulling in 87 cents.

There is some variability in the numbers, because the size of the wage gap depends on the measure of earnings that is used – and there are many intervening factors at play. But regardless of how one slices and dices the measurement criteria (accounting for part-time workers, measuring salaries vs. hourly wages, etc.), the outcome is always constant in one respect: there is more than a 10-cent-on-the-dollar gap between female workers and their male counterparts.

No matter which calculation is used, the gap clearly exists, reports the Canadian Women’s Foundation.

So what does a 13-cent difference truly amount to? Well, consider this. If a woman is earning the median annual salary in Canada – around $51,000 per year, according to a 2017 Workopolis report – and she works standard, full-time hours. Dusting off some algebra skills, that means her male counterpart would be earning about $58,620. That extra $7,620 per year is striking enough in isolation, but over a 35-year career? That turns into an earnings gap of $266,700 (without even accounting for raises, promotions and other income changes over time).

But regardless of how one slices and dices the measurement criteria, the outcome is always constant in one respect: there is more than a 10-cent-on-the-dollar gap between female workers and their male counterparts.

That gap is likely to widen when we account for intersectional identities, like women who are also a racial minority or women with LGBT identities, according to research by the Economic Policy Institute.

A number of underlying factors have been identified when we look at why the wage gap exists. Differences in workforce participation, women being overrepresented in lower-paying jobs and industries, overrepresentation in part-time work, the “motherhood penalty” identified by researchers and the earnings/career progression lost during maternity leaves or time off to raise children are some of the frequently cited factors. However, an estimated 10 to 15 per cent of the wage gap remains unexplained, and is generally attributed to gender-based wage discrimination, according to the Pay Equity Commission of Ontario.

What can employers do to close the gap?

According to the Government of New Zealand – the OECD nation with the lowest Gender Pay Gap – there are several key actions employers can take to significantly narrow the gap in their workplace:

  • Lead from the top
  • Make a plan
  • Analyze your data
  • Be aware of bias
  • Redesign your talent management processes
  • Maximize female talent
  • Normalize flexible work and parental leave for men and women

Stopgap measures

Addressing the underlying factors are critical to creating progress when it comes to narrowing the gap – and many Western governments have made some notable strides in that regard. Since passing the Pay Equity Act in 1987, Ontario in particular has taken measures to lessen the disparity. In 2014, the province passed the “Comply or Explain” regulation, requiring companies listed on the Toronto Stock Exchange to report publicly on their approach to increase the number of women on their boards and in executive officer positions. Minimum wage increases, increased investment in childcare, increased job skills training for low-income women and microlending coupled with financial literacy training are just a few other elements of the provincial strategy to close the gap.

On a more macro scale, the Organization for Economic Cooperation and Development (OECD) reports that roughly two-thirds of its 35 member nations have introduced new policies on pay equity since 2013. Each member nation experiences a gender wage gap, ranging from New Zealand’s at 5.6 per cent to South Korea’s, at 36.6 per cent, according to 2013 data. Additionally, Canada, Japan, Korea, New Zealand, Slovakia, and Poland have implemented increased subsidies or benefits for public childcare, while Norway and the UK have introduced free childcare, the OECD reports. Since 2016, nine countries have introduced compulsory gender quotas for private limited companies and state-owned enterprises (Austria, Belgium, France, Germany, Greece, Iceland, Italy, Israel and Norway). To promote transparency on pay, Australia, Japan, Germany, Lithuania, Sweden, Switzerland and the UK have implemented measures to require more detailed disclosure on gender pay gaps.

Notably, Iceland has recently become the first country to legally mandate that men and women receive equal pay for doing the same work, with a law that took effect New Year’s Day, 2018. The legislation makes it illegal for employers to pay one gender more for the same work, as well as mandates that organizations with 25-plus employees must provide proof and obtain government certification of their equal-pay policies.

Whatever the policy solutions under consideration, one beneficial element that most experts seem to agree on is that of pay transparency. Prohibiting pay secrecy and creating transparent, accessible compensation practices quite literally leaves nowhere to hide when it comes to structural inequities. For all the progress that has been made, transparency is perhaps one of the most critical tools when it comes to closing the gap – once and for all. 

Liz Bernier is a communications specialist with the Human Resources Professionals Association.

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