Commemorating International Equal Pay Day

The gender wage gap has been dismissed as a myth by some who overlook the economic, social, and political factors that result in the stark disparities in pay between men and women globally. According to the World Economic Forum, it will take 132 years to close the global gender wage gap while UN Women estimates that it will take 257 years. These ominous estimations propel the urgency to create a global imperative that addresses the discriminatory policies and practices that contribute to women’s labour being compensated unequally, in addition to tackling the persisting inequalities that result in women’s labour being systemically undervalued, underpaid, or unpaid. Although gender wage gaps vary considerably across the globe due to differing gender-based disparities, labour standards, and pay equity laws, these gaps undeniably impact the economic security of women globally. Therefore, the United Nations has declared September 18th as International Equal Pay Day, intending to draw much needed attention to the persisting nature of the global gender wage gap, and in order to recognize that closing the global gender wage gap is an important milestone for advancing human rights, fair and decent work, and SDG5 – achieve gender equality and empower all women and girls. This September 18th offers nations a timely opportunity to assess their progress on closing the gender wage gap and mandating equal remuneration for work of equal value.

For Canada, gender equality is at the very foundation of the Canadian Human Rights Act, the Canadian Charter of Rights and Freedoms, and is further protected throughout various employment acts and regulations. Perhaps the most significant is the Pay Equity Act, which applies to federally-regulated workplaces to ensure that women are paid equally for work of equal value. Furthermore, the Government of Canada has established that greater economic participation of women is substantially beneficial for Canada, and has accounted for one-third of Canada’s economic growth over the last 40 years. Yet, despite all these institutional and legal achievements, Canada ranks 25th in the World Economic Forum’s Global Gender Gap Index and 43rd in the Economic Participation and Opportunity category. The Global Gender Gap Index points to the stark gap in earnings between men and women, as Canadian women earn 89 cents to every dollar that Canadian men make. On an hourly basis, women make 12.5% less per hour than men, even in comparable industries and occupations, dispelling the idea that women make less because they opt for lower paying work or that they center their careers around familial decisions such as having children. Although it is commonly perceived that motherhood is the main cause of the gender wage gap (widely understood as the “motherhood penalty” or “motherhood tax”), research proves that Canadian women are subject to the gender wage gap regardless of their family decisions. In addition, narratives that women choose less lucrative careers which in turn are less demanding and stressful dismiss the realities of the gendered economy and stark differences in compensation between industries dominated by men versus women.

It is impossible to disentangle intersectional factors from the gender wage gap, which operates on a different axis for racialized, Black, Indigenous, and disabled women. These groups face multiple barriers, one of which is hidden wage gaps present within the broader gender wage gap. Large scale analysis of earnings gaps show that racialized Canadian women make 59% (55.6 cents) of white men’s earnings and have an income gap of 88.2 cents for every dollar that white women make. Moreover, racialized women enjoy less economic empowerment and participation in Canada, and have the highest unemployment rate of 9.6% (2019) in contrast to white women who have an unemployment rate of 6.4% (2019). Also, racialized immigrant women also fare worse in the labour market when compared to white immigrant women, who have a wage gap of 79 cents for every dollar a white immigrant woman earns. Indigenous women are also significantly impacted by the gender wage gap and earn 46% ($0.65 cents) of what white Canadian men earn. Lastly, disabled Canadians are paid the lowest. Disabled women are the hardest hit by the gender wage gap and have an income gap of $0.54 cents. Taken together, these systemically marginalized groups face double discrimination, greater vertical segregation, and are overrepresented in the care sector and underpaying occupations regardless of their educational attainment.

Over the last decade, progress on narrowing the gender wage gap has stalled in Canada. This trend continued during the Covid-19 pandemic where longstanding gender inequities within the labour market have been amplified. However, there are measurable actions companies can take to increase the economic empowerment of women who experienced higher rates of job loss and economic insecurity during the pandemic. Here are some best practices that organizations can implement to close the gender wage gap:

  • Prioritize gender equity within post-pandemic initiatives
    The pandemic has set back the global gender wage gap by one generation thus impacting women’s empowerment substantially across the board. Therefore, it is imperative to center gender pay equity, economic empowerment and opportunity, and the equal participation of Canadian women within your organization’s post-pandemic initiatives. By creating opportunities within the private sector to proactively increase the participation of women and tackle vertical segregation, Canadian women can enjoy greater economic security and undo the adverse economic impacts that the pandemic had on women.
  • Implement pay transparency
    Although it is illegal to pay women less than men, the existence of the gender wage gap proves that pay discrepancies are a systemic issue, even more so for racialized, Black, Indigenous, and disabled women. A crucial factor in closing the gender wage gap is pay transparency which can illuminate discrepancies in benefits, annual raises, and pay. In fact, a majority (73%) of Canadian employees and 81% of women advocate for pay transparency and would be comfortable disclosing their salary publicly to reveal any pay discrepancies. Therefore, it is critical that companies engage in practices, and create structures and policies that promote pay transparency. Companies can take measurable actions such as conducting regular reviews of compensation across the board to identity discrepancies, include salary ranges within job adverts, and ensure that wages offered are market-based and reflect living wage practices.
  • Support women’s economic empowerment inside the workplace
    According to the OECD, the economic empowerment of women is fundamental to achieving gender equality. Furthermore, supporting women’s economic empowerment increases the economic potential of nations and creates a direct a path towards gender quality, poverty eradication, and inclusive economic growth. Therefore, it is imperative for companies to create opportunities by promoting women’s leadership roles in management and at the board levels. Furthermore, companies can take measurable actions by dismantling systemic barriers that prevent women from accelerating in male-dominated industries by launching career development initiatives that promote women’s ability to grow professionally.

The UN Global Compact Network Canada is committed to advancing the economic empowerment and participation of Canadian women in the labour market and closing the gender wage gap to improve the economic security of women. If you are interested in learning how your organization can assess progress and identify gaps related to gender equality, you can access the Women’s Empowerment Principles (WEPs) Gender Gap Analysis Tool here.

If you are interested in getting involved with the UN Global Compact Network Canada multi-year project funded by Women and Gender Equality Canada that aims to advance gender equality within post-pandemic initiatives, click here.

Written by: Sarin Aman, Project Associate, UN Global Compact Network Canada