Tackling the Urgent Issue of Pay Inequality

Tackling the Urgent Issue of Pay Inequality

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In 1929, women were declared as “persons” by the Canadian government, and almost 100 years later, women are still underpaid and fighting for other rights. We must stop waiting for the government or society to solve this issue.

All organizations can solve pay equity issues by creating or updating pay grids to factor for women-dominated roles, re-examining experience to factor for maternity leave, creating hiring and promotion tiebreaker policies, and committing to hiring 50% of women in all job types.

As an HR professional, I have collected and analyzed data to create a path for you to solve this pay inequality issue in your organization.

The Facts of Canadian After-tax Income

In Canada, these are the 2022 Statistics Canada Mean (average) and Median yearly after-tax income facts:

GroupMeanMedian
All Males$52,800$42,800
Indigenous Males$43,000$36,900
Black Males$41,500$37,100
All Females$41,000$33,900
Black Females$39,800$34,000
Indigenous Females$36,400$29,400
Source: Statistics Canada. Table 11-10-0091-01 Average and median market, total and after-tax income of individuals by selected demographic characteristics

Click here if you need help understanding Mean and Median.

LGBTQ2S+ After-Tax Income

This government data does not reflect or indicate after-tax income levels for the LGBTQ2S+ community. So, I’m unable to assess this factor right now correctly.

As a general rule, since this is a highly marginalized group, your organization should make sure you’re not being biased when setting LGBTQ2S+ wages. The process may be similar to what I’m recommending later in this article for women.

Mean and Median After-tax Income Levels Difference

This data indicates a difference between the Mean and Median. For all people, the Median after-tax income is lower. Lower Median data may suggest that there are fewer high-income earners. So, we can extrapolate that more people are making lower incomes and the few high earners are skewing the Mean data.

Indigenous and Black Male Differences

This data shows that Indigenous Males make less average after-tax income than Black Males. Then it also shows that Black Males make more Median after-tax income than Indigenous Males.

More Indigenous Males have higher after-tax incomes than Black Males. However, the low Median for Indigenous Males indicates that more Indigenous Males make less after-tax income than Black Males. There is a more significant pay gap between high and low earners in the Indigenous male demographic.

I can relate this to my experience as an Indigenous friend who makes an excellent income working in the oilfield. This is in contrast to most of my Indigenous relations and friends who may have seasonal, low, or no income.

Additionally, I have heard stories of black men having a tough time working in the oil industry here in Alberta. I assume that this may indicate that black men are choosing or forced into a different industry that pays less but is less racist.

All Female After-tax Income

All women in Canada make at least 22% less after-tax income than the average man. So, 50% of working Canadians make at least 22% less income than the other 50%.

Supporting women and increasing wages would significantly boost the Canadian economy.

Black Female After-tax Income

Black women in Canada make 25% less after-tax income than men. The racism in Canada can start to be seen with this fact. This may be worse in the United States, and many black women creators are highlighting this issue.

Supporting black women and other women of colour can make another significant positive change.

Indigenous Female After-tax Income

Indigenous Females in Canada make 31% less after-tax income than men. Compared to the data above, Indigenous Females have the lowest after-tax income in Canada. Additionally, the even lower after-tax income Median shows that more Indigenous women make less than the average.

Supporting Indigenous women should be considered paramount when creating pay equity changes.

Actions to Solve Pay Inequality

In the Canadian Human Rights Commission’s 45 Calls for Inclusion, Call #17 states:

We must work to close the gender wage gap, create work environments where all employees are valued and engaged, and contribute to our country’s economic and social recovery.

https://www.chrc-ccdp.gc.ca/en/resources/45-calls-inclusion-celebrating-45-years-the-canadian-human-rights-act#week4

This is nice…but…they don’t list any concrete actions we should take. I guess that is where an HR professional like me needs to start creating a plan. I may change the action plan below as I learn more because nobody is perfect.

Recommended Pay Equity Plan

With my current human resources experience and education, this is the plan I’m recommending you implement.

Creating or Updating Pay Grids to Factor for Women-Dominated Roles

Pay grids are an organization’s master control. I could recommend that you increase every woman’s wage by 22% to 31% and be done with it. This may negatively affect the organization without preparation.

By preparation, I mean capping future high wages for men and executives who are primarily men. I do not recommend reducing any wages at this time. If someone already makes more than the new pay grids you create, they never get another raise. New employees in the same role will start and stay in the new pay grid.

Examine every role in your organization. Classifying and combining similar roles as needed is essential because having five different pay grids is better than 25! This will also lead you to update and standardize job descriptions to help in future hiring.

Roles that traditionally have more women, like reception and admin, will have to be reviewed well. You should take a leading role with wages here. For example, if the industry standard is $25 per hour, you could make your starting wage $26. This puts you in a leading role and puts a little pressure on the market to help increase wages.
If you join my e-mail list, you will get a free Excel spreadsheet pay grid tool I created to help you with this process.

Re-Examining Experience to Factor for Maternity Leave

We are human, and the reason we live is to have children! This is life! So, we need to respect life and our human lifecycle. Knowing this, why would we punish women for having children?

Shouldn’t people be celebrated and even rewarded for having children?

Maternity leave should not be considered when calculating experience in a role.

Creating Hiring and Promotion Tiebreaker Policies

Knowing that women and Indigenous women in Canada have lower wages, we need to find an added way to step up our equality game. Creating policies that favour women is not unreasonable.

In the event of an experience tie for hiring or a promotion, people should be considered in the following order here in Canada.

  1. Indigenous women
  2. Black women or other women of colour
  3. White women
  4. Indigenous men
  5. Black men or other men of colour
  6. White men

Committing To Hiring 50% of Women in All Job Types

Committing to hiring more women can be challenging in male-dominated roles. Fewer women may apply and have less experience because they can’t get a job. It’s the chicken and egg situation!

You must make the organization’s commitment public and encourage women to apply.

Make connections with women’s organizations to help you get more reach. Learn where the women go to get experience and advice.

You may have to start an advocacy group to attract more women to your industry. It will be good to get creative. Include the women already working for you in your brainstorming efforts to find ways to hire more women.

Get online computer training for you and your employees!

Use code: LBH10 to get 10% off!

Know-It-Sooner

What Next?

Consider having your women employees help you create and implement this plan. Employee satisfaction and loyalty may increase as a residual effect of improving your work environment.

For human resources support in Canada, click here to book a free HR needs assessment now. If you’re on a budget, consider joining my Patreon to ask unlimitedOpens in a new tab. HR questions. If you need HR advice sooner, book a consultation via Fiverr here.

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Ian Hopfe

Ian Hopfe is the owner of LBH Business Services Inc. in Edmonton, Alberta, Canada. Ian is an Indigenous Human Resources Consultant. He has over ten years experience in HR and over fifteen years experience in management. All blog articles on this website are written by Ian unless a guest writer is indicated on the post.

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