Mind the gap

Gender Wage Gap

Everyone knows women tend to earn less than men – that much is a fact. Quantifying and explaining the differences en route to eliminating them is the focus of a joint project between researchers at Wilfrid Laurier University and the University of Waterloo.

The study takes aim at the fact that women continue to earn less than their male counterparts, and attempts to discover how the gender wage gap is supposedly accounted for by gender differences in occupation.

The project is one of only three from across the province funded by the Ontario Pay Equity Office’s Gender Wage Gap Grant Program.

And it’s fitting for the project to come out now, as Tuesday was Equal Pay Day, an annual date which recognizes how men and women of equal qualifications are paid unequally for the same work.

Tammy Schirle, director of the Laurier Centre for Economic Research and Policy Analysis and one of the researchers, says it’s rare today to see a man and a woman in exactly the same job, with the same employer, yet earning different wages.

“It’s fairly common, however, to see a man and a woman, using the same skill set in their job, in the same industry, earning very different wages.  Why wouldn’t men and women using the same skills get the same wage rate?” Schirle ponders.

The working paper, titled “The Gender Wage Gap and Returns to Skills: Evidence from Ontario,” used data from Canada’s Labour Force Survey to look at the gender gap in Ontario’s private sector workers’ hourly wages.

The information was gathered from 2010-2014 and includes men and women aged 25-59 living in Ontario and working in the private sector, not including those who are self-employed. It allowed them to link wage rates to personal and job characteristics, such as the skills necessary for that occupation.

Schirle says it’s important for employers to take note and re-examine their hiring and promotion procedures.

“Look at what happens when individuals initially come to the firm with similar skills. Are men and women systematically ending up in different entry-level jobs that were paid different wage rates? Who is getting promoted? Do the different career paths result in differences in wages for men and women? Differences between the treatment of men and women are often unintentional and are easily overlooked,” Schirle said.

She says employers could be missing out by undervaluing the skills of their female employees.

Most of us have heard by now that on average women only make 77 cents – or something similar – for every dollar earned by men. Schirle notes most of the wage gap has to do with the jobs the majority of men and women enter, and that some people think this is a good enough reason to not worry about the gender gap.

She says if men and women have the same skill set they should have the same chance at landing the higher paying job.

University of Waterloo Prof. Ana Ferrer, chair of the Canadian Labour Economics Forum and one of the researchers, says it’s important to continue researching the gender wage gap because it hasn’t closed, despite progress made to level the playing field for women in the working world.

“Employers should keep in mind that gender differences in pay still exist and that these cannot be easily linked to obvious productive differences. This means that they should continue to monitor human resource practices to ensure that women have access to the same opportunities that men do,” Ferrer said.

She adds that some of their research shows that women with the same skills as men don’t receive the same job titles.

Lots of research has been done involving job skills, suggesting that job skills measure what’s required to perform a job better than traditional measures, such as job titles.

“These tell us about the type of jobs people perform and they contribute to explain why women get different pay than men, they are just not in the same occupations as men are. For us the question was more fundamental. Maybe women are not in the same occupations as men, but are they being paid the same when they perform jobs that require the same skills?” Ferrer said.

In construction, which is male dominated, men tend to use more strength skills than women, she says. Whereas in nursing, which is female dominated, women tend to use as much physical strength or more than men do. But in neither of these industries do skills explain much of the gender gap, which suggests differences exist in wages for similar skills.

“We thought that maybe in male-dominated occupations women might be paid differently for similar skills. What we found surprisingly is that they also seem to be paid differently than men in female-dominated occupations,” Ferrer said.

In some industries they did find that men are often paid more than women for the same job. It tends to be industries with a gender imbalance. It’s not the case in more gender balanced industries such as food and beverage stores; professional, scientific and technical services; and food services and drinking places.

“In male-dominated industries, women tend to do jobs that demand less physical strength, this should contribute to reduce the gender gap, since this skill typically commands lower pay. However, women also do jobs in these industries that require less fine motor skills, which are generally better paid. In female-dominated industries, women use more strength skills than men, which may account for part of the gap,” Ferrer said.

When asked which industries could benefit the most from closing the gender gap, she suggests those industries where women are a majority of the workers because there would be more of an effect due to the high number of female workers and also because if they’re choosing those occupations then clearly there aren’t barriers to acquiring those jobs. That might not be the case in male-dominated industries.

“The gap between men’s and women’s wages has fallen over time, but progress is remarkably slow,” Schirle said. “In 1997 in Ontario, women’s wages were about 25 per cent lower than men’s. In 2014, women’s wages were about 19 per cent lower. To close this gap any further, this separation of men and women into different jobs requires more attention.”

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