Women Earn Less Than Men - and That's a Fact
In 2018, the Business Council of British Columbia published a “Women and Work, An Analysis of the Changing British Columbia Labour Market.”[1]One of the paper’s conclusions: “On average across all occupations, women working full-time make less per hour than men.”
A new report entitled “How Much Do They Make?”[2]validates this finding for Canada, noting that “[i]n every field of study, women earn less then their male counterparts after graduating and in the vast majority of cases average gender earnings differences increase from one to year five.” Not a surprise but concerning nonetheless given tight labour markets, the need for more skilled workers, stagnant productivity -- all of which the Business Council has also written about.
The focus of “How Much Do They Make?” is on new labour market entrants. Gender shouldn’t matter at any time in a career, but within the first 5-years it shouldn’t matter at all. At the start of a working career, women and men tend to be equally inexperienced, equally able to apply skills in practical ways, and equal for learning opportunities. In addition, most young adults, of either gender, usually have no family responsibilities.
Yet the analysis reveals that across all credentials, women on average make 12% less than men within one year of graduation. This gap rises to 25% by year five, even in fields where women are dominant such as education. Women with business degrees earn 32% less then men after the first year. Only in health and related fields is the gap smaller at about 2%. Unfortunately, it doesn’t seem to matter what careers women pursue, in every case by the 5th year they earn less than men — on average 34% for college level certificates and 16% for doctoral degrees. Perhaps a contributing factor for lower labour market participation among women?
And while the gap may narrow over time in some occupations, it has yet to close.[3]Is this a systemic unconscious bias[4]or are there other reasons for the persistent differences? The study notes the need for additional research. We agree. It is important to understand in order to tackle the issue.
Afterall, ignoring the potential of women misses 51 percent of the solution in B.C. and is a significant lost opportunity for all countries and amounts to trillions of dollars in foregone global GDP.[5],[6]We also know women make 80% of consumer decisions in most modern economies. Therefore, their wages have a direct impact on spending levels and patterns. Further, role models and diversity matter to good decision making, better products, and solutions that can materially improve the health of company balance sheets. Women need to see themselves in senior roles in companies and other organizations and men benefit from watching and working with female leaders. We know we have benefitted from being in these environments. Women also need to know that their compensation is based on skills and abilities, not gender. Closing the wage gender gap is a goal that all should sign on to, it just makes good business sense.
Greg D’Avignon is President and CEO of the Business Council of British Columbia. Denise Mullen is the Council’s Director of Environment and Sustainability.
[1] Women and Work, An Analysis of the Changing B.C. Labour Market
[2] How Much Do They Make?, Labour Market Information Council, January 14, 2020
[3] Ibid, page xiii.
[4] Unconscious bias comes from social stereotypes, attitudes, opinions, and stigma we form about certain groups of people outside of our own conscious awareness. Page 5. Everyday Bias. Identifying and Navigating Unconscious Judgements in our Every Day Lives. Ross. Howard J., Rowman & Littlefield. 2014
[5] Women in the Workplace 2019, McKinsey