OTTAWA—Pay practices in the public sector are helping to narrow Canada’s gender and immigration pay gap, which is key to reducing income inequality, says a new report by the Canadian Centre for Policy Alternatives (CCPA).
How the Public Sector is Fighting Income Inequality (and why it’s still not enough) is available here.
In How the Public Sector is Fighting Income Inequality (and why it’s still not enough), CCPA Senior Economist David Macdonald examines hourly pay levels in 2023, adjusting them for 15 known factors, such as age, education, and occupation. The report finds that the private sector pays women 10 per cent less than men and landed immigrants eight per cent less than Canadian citizens.
However, those discriminatory pay gaps are cut in half by the public sector, which does this by both bringing up the pay for disadvantaged groups and keeping pay lower for advantaged groups, including men and senior executives.
“In the public sector, discrimination based on gender and immigrant status is less than it is in the private sector,” says Macdonald. “The public sector is better at reducing the pay gap because it lifts pay for workers at the bottom of the income spectrum—who tend to be women and immigrants—and it constrains pay for those at the top of the income spectrum—who tend to be men and executives.”
The narrowing of the gender pay gap in the public sector is most evident for lower-paid workers. Public sector women who earn around $20 an hour achieve pay equity; they are paid the same as similarly qualified men—a rarity in Canada. But women working in the public sector who earn a higher pay level—around $100,000 a year— get paid less than their female counterparts on the private side and much less than comparable men.
Broadly, the top 25 per cent best-paid workers are paid more in the private sector, and this contributes to worsening income inequality across the economy.
In the public sector, on the other hand, high-earning senior managers are paid 29 per cent less, as are health professionals like doctors and dentists. Yet, educators in primary and secondary, university and colleges, are paid more. The same goes for social workers and counselors—occupations that often employ more women.
While there is still work to be done to eliminate the gender pay gap, the public sector is further along than the private sector, where the pay gap is twice as big.
“Capping the extreme pay for dentists, doctors, and execs—and using this to produce less wage discrimination for equally qualified women and new Canadians—reduces wage inequality in the public sector,” asserts Macdonald.
“If the private sector followed similar pay practices to the public sector, Canada’s gender and immigration pay gap could be greatly reduced.”
For more information and interviews please contact Amanda Klang, CCPA Senior Communications Specialist (Media & PR) at [email protected]