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What is the Gender Wage Gap?

The gender wage gap is the difference between wages earned by men and wages earned by women. The gap can be measured in various ways, but the most common method is to look at full–time, full year wages. It is also possible to measure the gender wage gap on the basis of hourly wages. Other ways of calculating the gender wage gap include the comparison of annual earnings for both full- and part-time workers and comparing the hourly wages for full- and part-time workers. These methods of calculation will produce different results.

The gender wage gap is the difference between wages earned by men and wages earned by women. The most recent Statistics Canada data (2018) shows that the gender wage gap in Ontario is 12.2%. This includes both full– and part-time in core working age people ages 25-54. This means that for every $1.00 earned by a male worker, a female worker earns 88 cents. In 1987, when the Pay Equity Act was passed, the gender wage gap was 36%. 

The gender wage gap fell by over 5% between 1998 and 2018. Statistics Canada noted the reduction was largely explained by changes in the distribution of men and women across occupations, women’s increased educational attainment, and the decline in the share of men in unionized employment.

Nearly two-thirds of the gap remains unexplained. The unexplained portion of the gap captures two kinds of effects: measurable and unobservable wage-related characteristics. Measurable effects could include total work experience, the higher prevalence of work interruptions among women which are strongly linked to caregiving responsibilities, and field of study which may help to explain the impacts of education level on occupation. Unobservable wage-related characteristics could include gender differences in behaviours (e.g., wage negotiation), societal expectations, constrained choices resulting from gender roles in paid work, as well as the impact of explicit or implicit gender-based wage discrimination.

These characteristics were either not in scope or could not be measured with available data. To read the full study, click here.

According to the World Economic Forum's Global Gender Gap Report 2017, Canada ranks 16th out of the 144 countries tracked. Based on 2017 trends, the overall global gender gap can be closed in 100 years across the 106 countries studied since the inception of the Index (compared to the projection of 83 years in 2016).

 

Contributing factors to the gender wage gap:

Research shows that the gender wage gap can be affected by several considerations, including when women:

  • choose or need to leave and re-enter the workforce in order to meet family care-giving responsibilities, resulting in a loss of seniority, advancement opportunities and wages or because they are more likely than men to work part-time due to these responsibilities;

  • encounter occupational segregation in historically undervalued and low-paying jobs, such as childcare and clerical work, where female-dominated jobs are valued less even when they involve the same (or greater) skills;

  • were historically considered to have lower levels of education. This is becoming less of a factor as more women graduate from all levels of education, although the gender wage gap exists even for women with higher levels of education;

  • are less likely to work in unionized environments;

  • are often underrepresented in leadership positions;

  • encounter discrimination or 'unconscious bias' in the hiring, promotion and compensation practices of their workplace.