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Pay gap between men and women starts right out of the gate for college, university grads

It pays to get a post-secondary education in Canada, a new analysis of tax filings and educational attainment has shown. But not as much if you're a woman.

Women earn an average of $5,700 less than men just 1 year after graduation

Cassie L. Rhéaume, general manager for Lighthouse Labs, a tech training organization best known for coding bootcamps, said women are sometimes reluctant to negotiate for a better starting salary. And that begins a wage gap that gets wider as careers progress. (Alison Northcott/CBC)

It pays to get a post-secondary education in Canada, but not nearly as much if you're a woman, a new analysis of tax filings and educational attainment has shown.

The report, called How Much Do They Make?, found that the gender pay gap starts right out of the gate, with women earning an average of $5,700, or 12 per cent, less than men one year after graduation.

That gap widens to 25 per cent five years after graduation, when women make an average of $17,700 less across all disciplines.

The authors used a new set of data from Statistics Canada and Employment and Social Development Canada that follows all graduates from publicly funded colleges and universities in Canada starting in 2010, and tracks their income through tax filings. 

This report analyzes the income of 2010 graduates for a five-year period ending in 2015, when the most recent data is available. It looks at six levels of post-secondary credentials, ranging from college-level certificates and diplomas, to doctoral and professional degrees, and within those, 11 fields of study.

The report does not capture data about the incomes of ticketed tradespeople who have come up through the apprenticeship system, though that information will be included in forthcoming research.

Two organizations collaborated on the report: the Labour Market Information Council (LMIC), a non-profit research institute, and the Education Policy Research Initiative (EPRI), a national research organization based at the University of Ottawa.

Steven Tobin, executive director of the Labour Market Information Council, says that the biggest surprise in the report was that the gender pay gap appears immediately and touches every field of study tracked. (LMIC)

Labour economist Steven Tobin, executive director of LMIC, said that while the data shows clear overall economic benefits to having a post-secondary education, the immediacy and extent of the gender pay gap was startling.

"What surprised me the most was that in looking at the earnings by credential and field of study, women earn less than men in every credential and every field of study," said Tobin. "There isn't one combination of a credential and a field of study where women earn more than men five years after graduation."

Part of broader gender discrimination

Andrea Gunraj, vice-president of public engagement for the Canadian Women's Federation, said the results were disconcerting but in keeping with what other research has shown about "a persistent pay gap across the board for women." 

"We see that women are making 87 cents on the dollar that men make on an hourly basis," she said. "This is one piece of the bigger puzzle of how gender discrimination plays out in our society — and particularly at work for women."

The problem is even worse for women with disabilities and those from minority groups, she said.

Andrea Gunraj, vice-president of public engagement at the Canadian Women's Foundation, said the wage gap between men and women is one part of persistent gender-based discrimination that women face. (Canadian Women’s Foundation )

As for why the wage gap would appear in the first year of a woman's career, before things like caring for children are most likely to be in the mix, there are a few factors at play, said Gunraj.

"The statistics tells us that the discrimination happens even at hiring, when pay decisions are being made. It's happening with things like access to mentorship, training and promotion moments — the wage gap is still persisting." 

There's also a concentration of women in lower-paying fields, something that's sometimes referred to as "a pink ghetto," she said.

What's more, she said, when women's numbers increase in a sector and it's seen as "women's work," the pay drops.

"You see this in the caring sectors, in the food-service sectors, in the retail sectors where women tend to be concentrated in."

By contrast, men are over-represented in jobs like the trades, and as a result, those sectors are well paying, she said.

Negotiating right

It doesn't help that women don't always know their worth when it comes to starting salary, said Cassie L. Rhéaume, general manager for the Montreal office of Lighthouse Labs, a tech training organization best known for its coding bootcamps.

When they're eager to get their tech careers started, women may not realize they're leaving money on the table.

"But once you're in the field and you talk with your colleagues, you realize the difference, you realize the missed opportunities," said Rhéaume.

After that, it's hard to catch up.

Rhéaume says she pays particular attention to making sure her female students feel confident to negotiate fair starting salaries. (Alison Northcott/CBC)

While all Lighthouse Lab students get extensive coaching on how to prepare for interviews and salary negotiations, Rhéaume said she takes extra care to ensure the female students in her class are prepared to ask questions and advocate for themselves throughout the hiring process.

Liesl Barrell, CEO of Third Wunder, a digital marketing firm in Montreal, is also a mentor to young women in tech through her role as executive director of the non-profit Montreal Girl Geeks.

At one workshop Barrell ran, she said one young woman shared a hiring story that exemplifies the problem she and other young women face right at the start of their careers.

After a successful interview, the employer in question "gave her a piece of paper, said, 'Here's your offer; we don't negotiate.' So she accepted the offer, just thinking that's how it went," said Barrell.

A while later, the young woman's boyfriend was offered a similar role at the company. He was also given a piece of paper and was told the company doesn't negotiate.

"What he heard as a privileged male was 'challenge accepted.' So he went back, and he negotiated, and he got more." 

Overall good return on investment

Despite the troubling wage gap it revealed, the report findings did offer an overall endorsement for pursuing a post-secondary education.

"When looking at students' earnings after graduation, the results we see here are very encouraging," said LMIC's Tobin.

Taking into account all post-secondary levels, those who graduated in 2010 saw their earnings grow an average of 8.4 per cent per year after adjusting for inflation.

For context, that's higher than the average for Canadians with and without post-secondary education in the same general age group (22 to 28 years), who saw real inflation-adjusted earnings grow 5.6 per cent each year in the same time period.

Ross Finnie, lead author of the report How Much Do They Make? and director of the Educational Policy Research Initiative, said it found that across the board, earnings of post-secondary graduates 'are generally strong and rise substantially in the years following graduations.' (EPRI )

Ross Finnie, who teaches economics and public policy at the University of Ottawa, is director of the Education Policy Research Initiative and lead author of the report.

"Across the board, earnings are generally strong, and rise substantially in the years following graduation," said Finnie. 

People with bachelor's degrees from 2010 made an average of $58,700 five years later. Among that group, engineering and architecture grads earned the most, averaging $80,400 five years later.

Even those with the much-maligned humanities degrees were earning $48,000 five years out, he said.

Average earnings went steadily up through the various levels of educational attainment, with master's and doctoral degree students averaging more than undergraduates, and the highest average salaries going to those with professional degrees — doctors, lawyers, dentists and pharmacists — at an average of $99,600 at the five-year mark. 

The aim of the report is to put information into the hands of students, parents and guidance counsellors who are trying to make or support informed decisions on post-secondary paths, said Finnie.

All the data is presented in an interactive dashboard where users can see how earnings compare over a five-year period for the six different types of diplomas or degrees, and the 11 fields of study.

"An important caveat is that these do not necessarily represent causal effects," he said. "Any given individual won't necessarily make what the levels indicated by past graduates [do], because their own outcomes will depend on a range of individual factors."

Likewise, Tobin cautions that salary alone should not dictate career decisions.

"It doesn't come as any surprise that doctors or lawyers have higher earnings," he said, suggesting that people who aren't interested in those fields should take caution before pursuing them for the paycheque alone.

The pay gap between men and women starts shortly after entering the workforce, a new study shows. 1:51

About the Author

Brandie Weikle is a senior writer for CBC News based in Toronto. She's a long-time magazine and newspaper editor and podcast host with specialities in family life, health and the workplace. You can reach her at brandie.weikle@cbc.ca.

With files from Alison Northcott and Jessica Rubinger

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