Issue 53: A pandemic solution to the gender pay gap

As many have noted, the COVID-19 pandemic has led to a "she-cession" with women bearing the brunt of the economic fallout. Why don't we just give women money?

Today’s briefing is by Adele Brawley (AB), a graduate student at the Max Bell School of Public Policy.  Adele is a communications and public relations professional, with experience in strategic communications, business development, crisis communications and competitor analyses. She is motivated by helping others, and hopes to work towards breaking down the social and economic inequalities women and girls face in Canada. She is a dual Canadian-American citizen.

I FIRST REALIZED THE FAR-REACHING FUTURE EFFECTS of the pandemic when my significant other mused one afternoon early in lockdown, “can you imagine if we had a kid right now?”

He was referring to the fact that our quarantine had, up until that point, been taking place in his roughly 275 square-foot studio apartment. When my S.O. brought up kids, I quickly realized with a mix of shock and awe the cost-benefit analysis that millions of families must be grappling with at this very moment. Toilet paper stress aside, if my partner and I had had a kid during the pandemic, I would have either lost my job or been dangerously close to it. I make significantly less than my partner, even though at the time we had the same level of experience and the same job titles in our respective fields. However, I knew that if we had to risk losing one of our incomes it would without a doubt have been mine. His salary could potentially support me, him and our hypothetical kid. Mine could not.

Women are more likely to have the expendable income as secondary earners. Why? Because the gender pay gap is still a very real thing women have to contend with in Canada. To this day women make only roughly 87 cents on the dollar, according to a 2017 study published by Statistics Canada (though this number could be arguably as low as 75 cents/dollar). Including women’s part-time labour (part-time work is more likely to be held by women than men), the number drops further to about 69 cents on the male dollar. For women of colour, that number falls even further to 55.6 cents for every dollar earned by a white male.

Some research, as in this white paper published by PayScale earlier this summer, uses a “controlled” value, which places the difference men and women make closer to a 2 cent gap with women making 98 cents on the dollar. A controlled gender pay gap is used to compare men and women’s median annual income with the same job and qualifications. The problem with this measure is that it “controls” for the very factors that contribute to the gendered difference in earned wages. Frequently hidden institutional barriers such as inflexible work hours, sexism, harassment and gendered ideas of desirable “executive qualities” keep perfectly qualified women from being internally promoted to management and executive level positions, or keep women out of certain industries entirely. On top of that, traditional “women’s work” such as caregiving and education jobs are underpaid industries overrepresented by women. In other words, a lack of job parity is part of the problem, not a variable that should be controlled for. 

Institutional barriers, lack of adequate childcare, undervalued gendered roles, as well as sexism and harassment meet and intersect to effectively keep women underemployed, underpromoted and underpaid. To make matters worse, any progress that had potentially been made over the last three decades in closing the gender pay gap has been severely regressed by this pandemic. 

I’ve heard and read many smart people comment recently that we’re not just going into a recession, it’s a she-cession. There is widespread recognition amongst top officials in Canada that reopening schools is the only way to allow roughly half of the workforce to return to work. The upside of this talk is that there is a public recognition that women add an undeniable benefit to our GDP, in other words we have economic weight thank you very much. But with a somewhat ad-hoc and even chaotic approach to school-reopening nation-wide and serious concerns for the health of children and families, what about parents who choose to forego the second income and continue homeschooling their kids? What about unemployment? School re-opening does not translate to the creation of new jobs for the estimated 1.5 million women who lost their jobs in the first two months of the pandemic alone. Adequate childcare does not even begin to make up for the amount of lost income women will suffer for the remainder of their careers. While school reopening isn’t the solution, it’s one very crucial part of what should be wider policy action. 

BUT THERE IS ONE SOLUTION that we have yet to consider: a federal government subsidy for women. 

In 2019 TIME Magazine estimated, using a Bureau of Labour Statistics report, that on average American women earn USD $590,000 less than their male counterparts over the span of a roughly 54 year career. On the other hand, PayScale estimates this figure to be much higher at a loss of USD $900,000 using the uncontrolled median pay gap. Assuming these figures are roughly similar in Canada and using the more conservative figure, I’ve estimated Canadian women experience a loss of CAD $772,802.65. Why not consider reinvesting some of that gap back in women? Just 10% of the difference would total around $77,000, or roughly $1400 per year. Research, such as this paper from the International Development Research Centre, has shown that cash transfers can help empower women in the developing world - why not try it at home?

We’ve already set a precedent for universal cash transfers with the implementation of CERB during the pandemic, and while the gender pay gap isn’t a problem specific to the pandemic, neither is unemployment nor a recession. What made CERB necessary was the long-lasting and disproportionate economic effect of this recession on our society’s most vulnerable — hourly workers, service industry employees, etc. Similarly, this recession’s disproportionate impact on women calls for additional government intervention.

This proposal comes with massive challenges. How do we define the category of women? How should we determine the eligibility of women to receive the subsidy? Do we include stay-at-home moms and their unpaid labour? The list goes on.

I’m very worried about how the pandemic will impact my future earning potential, and let me reiterate; I don’t have kids, I have the luxury of being able to relocate for a job if needed, and I have family and a support system nearby. My lived experience as a white, cis-gendered, heterosexual woman vests me with an immeasurable amount of privilege. 

Yet while I certainly do not have all the answers, like so many other things this pandemic has taught me, it’s time to start thinking outside of the 275 square-foot box. (AB)

___

Policy for Pandemics is produced and edited by Andrew Potter. If you have any feedback or would like to contribute to this newsletter, please send an email to andrew2.potter@mcgill.ca