Women's participation in labour market rebounds, but pay gaps remain: RBC Economics

Women in Canada have more than regained the jobs they lost early in the pandemic, but they still face pay and career imbalances, especially in key child-rearing years, says a news report.

The report published Thursday by RBC Economics said after plummeting to a three-decade low at the onset of the crisis, the labour market participation rate for women rebounded just as sharply.

It found a record 84% of women between the prime working ages of 25 and 54 in the workforce last year.

However, the report said there remains a nearly eight percentage point difference in women's and men's labour market participation rates — a gap that’s twice as wide for parents with young children. 

"It's encouraging, but we still know there are holes and gaps, and even within the recovery itself, there are still some women who are not back to where they were pre-pandemic,” said Dawn Desjardins, RBC’s deputy chief economist and one of the report's authors.

"But...we're getting there. We're chiseling away."

She previously reported the health crisis pushed women's participation in the labour force down to its lowest level in three decades in 2020.

If women’s wages were equal to men’s in comparable jobs, Desjardins now believes the country could see an $18-billion boost to Canadian household income.   

While RBC sees more women entering higher-paying industries, it said the gap between men’s and women’s pay remains virtually unchanged from before the pandemic.

The report said women between the ages of 25 and 54 with young children under the age of six earned 87 cents for every dollar earned by fathers with children of the same age. However, the report doesn't calculate how wages differ for men and women in comparable jobs.

The overall wage gap widens as kids get older. Women in the same age bracket with children between the ages of six and 12 earned 82 cents for every dollar earned by men with children in the same age group.

Even women without kids can’t escape the wage gap. Women in this group earned 93 cents for every dollar earned by men without children, the report said.

Also facing the brunt of imbalances in corporate Canada are visible minority women. The report found there is an 8.1% gap in unemployment rates between visible minority women and visible minority men. 

While these statistics show how much work must be done to close the wage gap, Desjardins sees some hope. 

"The pandemic has done a lot of terrible things, but it brought to light some issues that I think were deep-seated in our labour market," she said.

But there are signs of change. Women are emerging from the pandemic more educated than ever before, with a greater proportion of young women holding university degrees than their male peers, the report said.

They're also gaining ground in male-dominated industries like business and finance, where women made up 47% of workers in 1997, but now account for 57%.

While many have trumpeted affordable and flexible childcare as key to helping advance women in the workplace and encourage equal pay, the report said it was “critical, but not a silver bullet.”

Desjardins said the report made this point because affordable and flexible childcare takes time to implement and to trigger ripple effects on women in the workforce.

Aside from childcare, she encouraged the country to establish greater parity between maternity and paternity leave, which could reduce “the baby penalty,” a term used to describe pay, job and career repercussions women face when having children.

The report also pushes for Canada to address some of the financial burdens of parental leave, which currently pays parents 55% of their salaries to a maximum amount of $638 per week. 

In comparison, countries like Iceland cover 80% of a woman’s salary while on parental leave.

The report’s final recommendations are for companies to create more opportunities for upskilling and career progression for women and to work on hiring more women into skilled trades, where they represented just 5% of apprenticeship registrations in 2019.