The Gender Wage Gap: It’s More Than You Think

Highlights

The gender wage gap persists in Ontario, no matter how it is measured.
The hourly wage gap has narrowed eight percentage points since 1998 to 11 percent in 2021 when looking at average hourly wages,
This means, on an hourly basis, women make 89 cents on average for every dollar made by a man.
The gender wage gap is larger for racialized women, women who are newcomers, women with disabilities, Indigenous women, and trans women.¹
Research shows that factors such as education, job tenure, part-time vs. full time work, public vs. private sector work, firm size, unionization rates, occupation, industry, and demographics, can only explain about 30 percent of the gap in Ontario. Seventy percent of the gap remains unexplained. This unexplained portion may be due in part to factors such as gender discrimination and societal expectations and constraints.

What is the gender wage gap in Ontario?

The gender wage gap is the difference between wages earned by men and wages earned by women. The gap can be measured using different metrics, including average hourly wages, median hourly wages, average annual earnings, and median annual earnings.

Figure 1: Statistics Canada. Table 14-10-0340-02 Average and median gender wage ratio, annual and Statistics Canada. Table 11-10-0239-01 Income of individuals by age group, sex and income source, Canada, provinces and selected census metropolitan areas

Using average hourly wages, Statistics Canada data from the Labour Force Survey reveals that female employees in Ontario earned $0.89 for every dollar earned by men in 2021. In other words, the gender wage gap in Ontario was 11%. The average hourly wage gap in Ontario has narrowed by eight percentage points since 1998, when women earned $0.81 for every dollar earned by men.

Using median hourly wages, the gender wage gap in Ontario was 13% in 2021.

Using average annual earnings, Statistics Canada data from the Canadian Income Survey indicates that female employees in Ontario earned $0.75 for every dollar earned by men in 2020, or the gender wage gap was 29%. The average annual earnings gap in Ontario has narrowed by twelve percentage points since 1998, when women earned $0.63 for every dollar earned by men.

Using median annual earnings, the gender wage gap in Ontario was 27% in 2020.

As women tend to work fewer hours and are also less likely than men to receive performance-based pay, the gap calculated with the average or median annual earnings measure is greater than the gap calculated with the average or median hourly wages measure.
Statistics Canada is not yet able to determine the impacts of the Canadian Emergency Response Benefit (CERB) or COVID-19 more broadly on the gender wage gap.

Both the average and median hourly wages and average and median annual earnings measures include both waged and salaried workers. The main differences between the two measures are as follows:

The annual earnings measure includes performance-based pay (e.g., commissions and bonuses), while the hourly wages measure does not.
The annual earnings measure does not account for differences in hours worked in a given year, which is significant because women are more likely to work part-time (i.e. fewer hours).

What is the gender wage gap for women of colour in Ontario?

Figure 2: Statistics Canada. Data tables, 2016 Census Visible Minority (15), Income Statistics (17), Generation Status (4), Age (10) and Sex (3) for the Population Aged 15 Years and Over in Private Households of Canada, Provinces and Territories, Census Metropolitan Areas and Census Agglomerations, 2016 Census - 25% Sample Data

Note: The average annual GWG of all Ontario women in this section is not the same as what is presented in the previous sectionFigure 1. One reason for this is that The previous section reflects 2020 data from the Canadian Income Survey whereas this section reflects 2016 Census Data. Statistics Canada collects data on Aboriginal women through another survey, which is reflected in the next graph.

2016 Census Data from Statistics Canada shows that the gender wage gap is wider for women from a visible minority population. When looking at total average annual income of all visible minority populations in Ontario, West Asian women experience the largest gap at 59% while Japanese women experience the smallest gap at 33%.

Figure 3: Statistics Canada. Data tables, 2016 Census. Aboriginal Identity (9), Employment Income Statistics (7), Highest Certificate, Diploma or Degree (11), Major Field of Study - Classification of Instructional Programs (CIP) 2016 (14), Work Activity During the Reference Year (3), Age (10) and Sex (3) for the Population Aged 15 Years and Over in Private Households of Canada, Provinces and Territories, 2016 Census - 25% Sample Data

When looking at total average annual employment income of Aboriginal and non-Aboriginal populations in Ontario, Aboriginal women earn on average $18,188 CAD less per year than non-Aboriginal men. This translates to a 24% gap. Hourly wage gap data is not available.

Why are there different measures?

Past studies on the gender wage gap have often used average annual earnings as a measure of compensation. However, average hourly wages more accurately captures the price of labour.

The average hourly wages measure is less affected by the gender differences in work hours, so offers a closer comparison between men's and women's pay. The average annual earnings measure better reflects the full scope of the financial implications of female earners and their economic well-being, since it includes performance-based earnings. Therefore, researchers now tend to use both measures.

Considerations when using average or median

Average

Median

Takes into account the earnings of every worker.
Can be skewed by a small number of people who earn extremely high or low salaries.
A commonly used and understood measure.
Methods of data analysis typically used to examine the gender wage gap are based on the average.

Accounts for extremely high or low salaries as it is the numerical value separating the higher half of a data sample from the lower half.
May not reflect the overrepresentation of women in lower pay positions and underrepresentation of women in higher pay positions as well as the average.

Why is there a wage gap between women and men?

Gender wage gap can be affected by several considerations, such as 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 through clustering 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 resulting in lower wages. 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; and
Encounter discrimination or unconscious bias in the hiring, promotion and compensation practices of their workplace.

However, Statistics Canada 2019 research shows that factors such as education, job tenure, part-time vs. full time work, public vs. private sector work, firm size, unionization rates, occupation, industry, and demographics, can only explain about 30 percent of the gap in Ontario. Seventy percent 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.

How does Ontario’s gender wage gap compare to the other provinces?

Out of the ten provinces with available data on the hourly average gender wage gap, Ontario came in sixth (11% gap) behind Prince Edward Island (0%) New Brunswick (7%), Nova Scotia (7%), Quebec (9%), and Manitoba (10%). The gender wage gap was the highest in Alberta and British Columbia (14%).

Figure 4: Statistics Canada. Table 14-10-0340-02 Average and median gender wage ratio, annual

Pay Equity is the law in Ontario, Quebec and for federally regulated employers. Manitoba, Nova Scotia, New Brunswick and PEI have pay equity legislation for the public sector, but not private, while Saskatchewan, Alberta and British Columbia have no specific legislation on pay equity, but address pay discrimination through human rights legislation.

How does Canada’s gender wage gap compare to other countries?

According to the World Economic Forum's Global Gender Gap Report 2021, which tracks progress on relative gaps between women and men on economic participation, educational attainment, health, and political empowerment, Canada ranked 24th out of the 156 countries tracked. Based on current trends, the report predicts that the overall global gender gap could be closed in 135.6 years.

If education has been an historical factor, has women’s increased educational attainment helped to narrow the gap?

Women’s increased educational attainment has been one of the key factors contributing to the reduction in the gender wage gap. Statistics Canada research found that from 1998-2018 the relative increase in women’s educational attainment accounted for 12.7% of the decrease in the gender wage gap that occurred over that period.
In comparing the earnings of male and female graduates after graduation, research suggests that the gender gap was smaller at higher levels of education (except for those with Master's degrees).

For 2014 post-secondary graduates, two years after graduation, the difference in median annual earnings between men and women ranged from 3 % for those with a professional degree ($84,800 for men versus $82,100 for women) to 22% among graduates with a career, technical, or professional training certificate ($36,300 for men, compared with $28,200 for women).

Figure 5: Statistics Canada. Labour market outcomes for college and university graduates, 2016 to 2019

For all qualifications (with the exception of doctoral degrees), the gap in earnings between women and men widened between two and five years after graduation.

By 2019, or five years after graduation, the gap between men and women's salaries ranged from 10% for those with a doctoral degree to 30% for those with a career, technical, or professional training certificate.
The largest increase of the gender wage gap is experienced by graduates with professional degrees as the gap jumps from 3% at two years post-graduation to 12% at five years post-graduation.

If occupational segregation has been an historical factor, have changing career choices helped to narrow the gap?

Changes in the distribution of men and women across occupations has also been one of the key factors contributing to the reduction of the gender wage gap, as women have increased their representation in higher-status occupations.
The occupations with the largest gains in closing the gender wage gap over the last decade in Ontario are: management occupations; trades, transport and equipment operators and related occupations; and sales and service occupations.
From 2010-2021, the gender wage gap in health occupations widened by two percent.
As of 2021, the gender wage gap was the largest in natural resources, agriculture and related production occupation as well as occupations in manufacturing and utilities ($0.77 for every dollar earned hourly by men). The gender wage gap was smallest in health occupations ($0.95 for every dollar earned hourly by men).