Wanted: Employers willing to pay their employees equitable wages. Benefits include improved ability to recruit and retain workers, better human resource practices, an end to gender bias and a stronger economy. The cost? Pay equity.
Pay equity—equal pay for work of equal value—is reached when jobs mostly held by women are paid the same as jobs of the same value but mostly held by men. In other words, if the value is the same, the pay should be too.
Because of the continued devaluation of work historically or mostly done by women, many of these jobs are underpaid. For many women, it is proving to be a disincentive to enter or to return to the workforce.
While employers are increasingly relying on women's work, policies have not kept pace to ensure that women's work is fairly compensated. If we want the labor market to work for all of us, we need a systemic change in how we value and pay for women's work.
Pay equity can help address recruitment and retention challenges.
Even though New Brunswick's unemployment rate is already above the national average (7.1% in July), job vacancies are on the rise (13,600 in the 1st quarter of 2022). With New Brunswick looking to fill tens of thousands of positions over the next 10 years, the pressure on employers to recruit and retain talent will only increase.
Not surprisingly, wages are the lowest and the labour shortages are among the highest in female-dominated employment sectors, such as retail, caregiving and accommodation and food service. After being deemed "essential" at the height of the pandemic, the ones who care for our children, prepare our food, sell us basic necessities, care for our sick question why they are not paid as such.
The labour crisis is not fueled by a shortage of people willing to work, but a shortage of people willing to work for poverty wages. Paying workers a living wage is good for business.
Pay equity can be a useful tool for employers to help address this growing crisis. Offering potential employees not only better wages, but fair wages, can be a major competitive advantage.
Pay equity can be a useful human resource tool for modernizing pay practices.
The job evaluations involved in the pay equity calculation require employers to develop better and more accurate job descriptions. Based on these, value is calculated based on the qualifications, responsibilities, working conditions and effort required for the job. As an objective process, it also allows employers to determine whether unconscious or conscious gender bias exists in job descriptions—and to correct it.
So, pay equity evaluations would not only close the wage gap between jobs predominantly held by women and men, but also determine the value of each job and ensure that they are paid fairly.
These are not assumptions. Ontario and Quebec have implemented pay equity legislation in the private sector. Twenty-five years after the adoption of the Pay Equity Act in Quebec, its indirect impacts have been wide-ranging.
Employers have noted that implementing pay equity in their workplaces has resulted in better compensation practices, increased productivity and better understanding of jobs. The improved work climate also benefited employees, who reported better recognition of their skills, a stronger sense of motivation at work, and a greater sense of fairness, all of which increased their loyalty to the company.
Pay equity is not only the right thing to do, it is also one of the most practical human resource tools available to employers.
Pay equity can help remove barriers to women's full participation in the labour market and improve the economy.
Despite the shrinking gender wage gap, New Brunswick women continue to earn $1.74 less per hour than men and their participation rate is the second lowest in the country at 57.3 per cent. This problem is not unique to New Brunswick. It is in the best interest of both employers and the province to maximize the participation of half the population.
According to a 2017 study, the provincial GDP could have increased by 3 to 4 per cent between 2016 and 2026 if women's participation in the workforce had increased. This can be best achieved by ensuring that the jobs they hold are paid what they are worth.
In New Brunswick, over 65% of working women are employed in the private sector, which is not covered by existing pay equity legislation. In its absence, women bear the costs of pay inequity: they continue to make up the majority of minimum wage earners and those who hold multiple jobs, and they are twice as likely to work part-time.
If employers want to reap the benefits of increasing women's participation in the workforce, they're going to have to start paying them fairly.
Pay equity can and should be a value shared by employers and employees.
As highly educated young professionals are poised to enter the workforce, they are looking for businesses that foster a diverse, equitable and inclusive workplace. One of the key findings of this year's Canada's Top Employers for Young People report is that youth are looking for employers that match their values. Employers should take note and ensure that their justice and social impacts are not only reflected in their organization's mission, but also integrated into their workplace policies.
Following the adoption of pay equity legislation for the private sector in Quebec, they found that in addition to increased wages, the indirect impacts of pay equity on employees included a better sense of fairness, an increased sense of belonging to the company, greater productivity, and an improved work climate.
This Labour Day, employers, take note: pay equity is a win-win scenario.
Krysta Cowling
Chair of the New Brunswick Coalition for Pay Equity