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July 23, 1997
Are Women Catching Up in the Earnings Race?
by Katherine Scott and Clarence Lochhead
Over the past year, there have been conflicting reports about the pattern of women's earnings. Some have suggested that the wage gap between men and women has narrowed dramatically in recent years, and that the end of gender-based wage discrimination is imminent.1 Others have suggested that the wage gap between women and men is a continuing problem and in some cases, it is getting worse.2
In an effort to shed some light on the real story behind women's earnings, this report presents a new way of measuring what progress women have made in closing the gap between their wages and those of men. Using microdata from Statistics Canada's Survey of Consumer Finances, the authors analyse the changes that have occurred in women's and men's earnings between 1984 and 1994, in relation to the overall distribution of earnings. They further break down the pattern of women's and men's earnings into different age groups within the labour force. The report concentrates on those who held employment during this period. It does not consider the larger question of men's and women's total incomes, or questions related to rates of unemployment.
The authors found that overall, the number of Canadians who worked full time all year and earned more than $37,000 rose between 1984 and 1994, due mainly to an increased number of women entering this wage category. The gender-based wage gap narrowed modestly over the decade, but remained substantial. By 1995, women earned, on average, 65 cents for every dollar earned by men – up from 54 cents in 1981. For full-time full-year workers, the wage gap narrowed slightly from 64 cents to 73 cents earned by women for every dollar earned by men.
Within the overall distribution of earnings, men's position has changed little over the decade. They still dominated the higher earnings groups and made up a relatively small portion of workers in the lowest earnings categories. For example, in 1994, 1.3 million men earned $51,000 or more annually, compared to 275,000 women. The majority of women remained in the lowest earnings categories – 71 per cent earned less than $28,000 per year in 1994 – but over the decade, an increasing proportion moved into the higher earnings groups. By 1994, women made up 17 per cent of those with earnings above $51,000, up from only 11.5 per cent in 1984.
This improved earnings position for women was restricted largely to members of the baby boom generation, that is, those 40 to 54 years of age. Between 1984 and 1994, more than one-tenth of the women in this age group who worked full time for the whole year moved out of the lowest earnings categories ($24,000 or less per year). For women in other age groups, their position within the earnings distribution remained unchanged, and for some it grew worse.
For young women and young men over the decade, even those who worked full-time for a full year fared poorly in the earnings distribution. The majority (72 per cent) of women aged 18 to 24 years earned less than $24,000 a year in both 1984 and 1994, and the proportion of young men in this earnings group rose from 56 to 67 per cent over the period. While young male and female workers fared poorly, a growing percentage of them remained in school. In 1984, 40 per cent of women and 27 per cent of men under the age of 25 had post-secondary schooling; by 1994, nearly 60 per cent of young women and 45 per cent of young men had some post-secondary education.
Based on their findings, the authors conclude that suggestions that the labour market is approaching a state of gender parity are clearly premature. The narrowing of the wage gap – while an important indicator of progress for women – is limited. This initial study of the earnings distribution reveals that many women of the baby boom generation are benefiting from the new economy, but other groups of women are stuck on the margins. In particular, the situation faced by youth is very serious and portends significant long-term economic and social problems.
Advocates of greater economic equality between women and men can take solace from the fact that as a group, women have slowly moved up the earnings ladder over the past 30 years. But these gains are not necessarily secure. Preliminary analysis shows that the women who made wage gains over the last decade were the beneficiaries of a pool of good jobs in the health, education and social service sectors.3 However, as the structure of the economy continues to change, with the continuing polarization of job opportunities, there is a real danger that women's economic advances will be halted. And such a situation would herald greater economic insecurity for all Canadians.
Endnotes
1. April Lindgren, "Male, female income disparity doesn't equal discrimination, StatsCan researcher says," The Ottawa Citizen, January 28, 1997, A4.
2. Canadian Labour Congress, Women's Work: A Report (Ottawa: CLC, 1997).
3. Unpublished research by the Centre for International Statistics at the Canadian Council on Social Development, 1997.
Related Material
Canadian Council on Social Development,
309 Cooper Street, 5th Floor,
Ottawa, Ontario, K2P 0G5
Tel: (613) 236-8977, Fax: (613) 236-2750, Web: www.ccsd.ca, Email: council@ccsd.ca
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