Wage gap means high cost of living hurting women more than men

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Women in Canada are still getting paid far less than men even as more of them take on the role of breadwinner, raising the risk of financial hardship as life gets more expensive.

In February, women between the ages of 25 and 54 earned just 87 cents for every dollar made by men in the same age group, according to Statistics Canada’s latest Labour Force Survey. That’s not much better from the year before, when women made 86 cents for every dollar earned by men, and matches the average from 2017 to 2019. Put another way, women who worked full time last year made 13 per cent less than their male counterparts, according to a Canadian Imperial Bank of Commerce report on the wage gap.

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At the same time, more women are shouldering the financial burden at home. Almost one-third of households between 2019 and 2021 had female breadwinners, an increase from 23 per cent in 1996, Toronto-Dominion Bank economists said in a recent report ahead of International Women’s Day last week. Their earnings are no small change, with female breadwinner paycheques making up more than 60 per cent of total household income. In most cases, that amount is even higher, TD said.

Perhaps that shouldn’t come as a surprise since women have been flooding into the labour force in recent years. Flexibility brought on by pandemic work-from-home arrangements and the federal $10-a-day child-care program have led to a jump in the participation rate of mothers with children up to age 12, CIBC said. On top of that, women are earning more post-secondary degrees, including masters and PhDs, than men. That’s leading to a wave of females moving into higher-paying sectors such as business, engineering and sciences.

Still, women’s salaries, even in those higher-paying sectors, aren’t keeping pace with those of men. Combined with the rising cost of living, the gap could be putting women under extra and undue financial strain. One in 10 professional women admit they need to work an extra job or side hustle to make enough money to pay the bills, twice the number of men, according to a recent Robert Walters Canada report. Forty per cent believe they are underpaid, compared to just 24 per cent of men, while 67 per cent of men earn more than $74,000 a year versus 39 per cent of women.

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More females than males also say they haven’t had a raise in over a year, likely making it even harder to meet expenses as inflation and high interest rates push up the costs of everything from food to mortgage payments. “With seven per cent more women than men stating that they live paycheque to paycheque with no disposable income, it’s evident that men have an unfair advantage in the current economy,” Coral Bamgboye, head of equity, diversity and inclusion at Robert Walters Canada, said in a news release.

Men have an unfair advantage in the current economy

Coral Bamgboye, Robert Walters Canada

It follows that households relying primarily on a woman’s paycheque may be feeling particularly squeezed. But it gets even worse when a maternity leave is added to the mix. Government programs such as employment insurance (EI) and child-benefit payments don’t make up for the loss in income a woman experiences when taking time off to have a baby. For example, a mother in Ontario who earns $72,000 a year would only receive $29,700 from provincial and federal EI, with child benefits adding another $2,700, TD said. Though employer top-ups can help, they don’t completely bridge the gap, are usually only offered for a short amount of time and half of companies don’t provide them at all.

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The dreaded “motherhood penalty” also comes into play when children arrive. “Societal expectations of mothers as primary caregivers contribute to the perpetuation of gender wage gaps through penalties to wages and career progression, which can push many women out of the role of major income earner,” the TD report said. Mothers might eventually regain their role as the family breadwinner over time, but their pay never recovers, the report said.

Greater availability of subsidized child care could go a long way in easing the financial burdens working mothers face while keeping them as family breadwinners. But CIBC said that’s not enough to close the wage gap. To do that, more women need to advance to leadership positions. “Breaking the glass ceiling will ensure that women share equally in the rewards of pay increases at the top end of the income scale,” CIBC economist and report author Katherine Judge said.

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Pay transparency at businesses and in job postings might also help bring about wage equality. Transparency laws reduced the pay gap between women and men by 30 per cent, a 2019 Statistics Canada study of university salaries said. In addition, knowing what their male colleagues are getting paid might arm women with the ammunition they need to overcome their fear of asking for a pay hike in the first place. As it stands, 75 per cent of women who ask for raises get them, according to job-posting site Indeed’s research.

Of course, it shouldn’t be left up to women alone to fight for equal pay. Company leaders need to step up, too. “Employers need to be more prepared to address issues and make changes, particularly when it comes to appraisals and benchmarking salaries more fairly, without waiting for employees to seek fair pay themselves,” Bamgboye said.

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A version of this story was first published in the FP Work newsletter, a curated look at the changing world of work. Sign up to receive it in your inbox every Tuesday.

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