Equal Pay Day: Closing the Gender Pay Gap

April 4th is Equal Pay Day in Canada, a day to raise awareness of the gender pay gap that persists in our society. It also marks the additional number of days women would have to work in order to earn the same amount as men in the previous calendar year.

That means if you’re a Canadian woman who works full-time hours, it’s as if you have been working for free since the beginning of the year. Read that again.

So, how can organizations achieve pay equity in the workplace? Leadership must take the necessary steps to address pay discrimination and ensure all employees feel valued and are compensated fairly for their work, regardless of gender. The time to take action is now.

What Is the Gender Pay Gap?

The gender pay gap refers to the difference in average earnings based on gender. No matter how the gender pay gap is measured, it still exists. Despite more women entering the workforce than ever before, as well as outnumbering men in pursuing university degrees, wage inequality is an ongoing human rights issue that affects women around the globe.

In fact, Canada has the eighth worst gender pay gap in the world according to the OECD (2022) ranking of countries. In 2022, Statistics Canada showed that women who worked full-time hours only earned 89 cents for every dollar men earned. From this data, we can see that women in Canada must work 15 and a half months in order to earn the same wages as men in one year.

For women of marginalized communities, the pay disparity only increases. In Canada, Indigenous women working full-time earn 65 cents for every dollar a man earns, or 35 per cent less on average. Racialized women who work full-time earn 67 cents to every dollar a man earns, or 33 per cent less on average. For women living with a disability, they earn 46 per cent less on average than men living without disabilities.

Pay discrimination is also prevalent for LGBTQ2S+ women. Based on a report from the Social Research and Demonstration Corporation, people who self-identified as a sexual minority had “significantly lower median annual earnings compared with heterosexual men. In descriptive analyses, heterosexual men were found to earn the most ($55,959), followed by gay men ($50,822), lesbian women ($44,740), bisexual men ($31,776), and bisexual women ($25,290)." 

It’s clear that not all women are impacted the same by the gender wage gap. Race, gender identity, sexual orientation, age and disability are contributing factors to income inequality. 

Why is Closing the Pay Gap Important?

Pay equity is defined as “equal pay for work of equal value.” While there are laws in place that are meant to protect women from pay discrimination, cultural factors and structures still result in women consistently being paid less than men.

Research shows that women-dominated industries, or work that is seen as traditionally “women’s work,” are undervalued and earn lower wages. It can also be difficult for women to make career advancements in male-dominated industries due to gender bias. 

Another factor that contributes to the gender pay gap is lack of affordable childcare. Women with families are often expected to uphold the bulk of domestic responsibilities, sometimes involving more interruptions and absences from work that can lead to fewer promotions and salary increases over time in comparison to men.

Although the difference is slowly closing over time, the existence of the gender pay gap continues to perpetuate gender inequality and discrimination in the workplace. It’s also one of the root causes of women’s poverty, which follows them into retirement. According to the Mercer CFA Institute, there is a gendered pension gap of 22 per cent, where women are retiring with only 80 percent of what men are retiring with on average.

If present trends continue, it’s estimated to take approximately 276.6 years to close the gender wage gap worldwide.

The gender wage gap impacts the economic wellbeing of women and is a symbol for the value women placed on their work in comparison to men. Until women are paid equally and given fair opportunities to advance in their careers, they have not received economic justice.

Moving Towards an Equitable Future

While there is still a ton of progress to be made, it’s never too late to start working towards equality in the workplace. Here are three methods organizations can start implementing today to close the gender pay gap:

1.  Run the Numbers

It’s not enough for an organization to say they don’t have a gender pay gap without the data to back it up. Performing yearly salary audits can help determine if there are any inequalities in employees’ wages based on their gender, or in advancement or leadership opportunities. 

2. Promote Pay Transparency

To ensure fairness in pay across the board, organizations must provide clear frameworks for calculating salaries and have open communication about employee earning potential. Leaders can go the extra mile and ask employees confidentially about their perception of the organization’s progress towards pay equity.

3. Diversify Recruitment

Representation matters. Involving more women during the recruitment process, including marginalized women, ensures more women are being hired in underrepresented roles. It’s also important for organizations to give the same mentorship opportunities as men, allowing for more women to exist in high-paying leadership roles.

Not only does closing the wage gap help achieve equity in the workplace; it also helps organizations retain talent and stay competitive as employers. A 2019 study reported that 48 per cent of working Canadian women would consider quitting if they learned their male colleagues received higher compensation for similar roles.

Visit the Equal Pay Coalition of Ontario’s website and read their multi-level strategy of 12 Steps to Closing the Gap for more information on how your organization can achieve pay equity.