Women powered pandemic shift toward higher-paying jobs, but pay gap persists: RBC

Women have powered a recent shift toward higher-paying and -skilled jobs, but a pay gap will persist until they cease being outnumbered by men in senior management positions, says a new report.

Canada’s labour market saw nearly 200,000 women stream into jobs involving less in-person contact and often significantly higher wages after many pandemic measures were lifted, the Tuesday report released by the Royal Bank of Canada found.

Of the $21 billion in additional income created by the movement to higher paid sectors over the pandemic, $9 billion or 43% was funnelled to women. This amounted to 15% of the total boost to women’s earnings during the pandemic recovery.

“But men still made up the majority of the income gains and much of that is likely because the roles that women and men occupy are still different,” said Carrie Freestone, an economist with RBC Economics.

“Even though we see women in these higher paid sectors, often the senior leadership roles are disproportionately filled by men.”

Her research found men made up more than two-thirds of senior leadership positions even though the number of women and men in the labour market are equal.

Some of the inequities were even more pronounced among parents.

Freestone found fathers with young kids were far more likely to be senior managers, filling 10% of such roles, while mothers made up less than 3% of the positions.

“So it appears that there’s a link between having a kid and the fact that you may be less likely to take on a senior management role,” she said.

Much of her research is based on the women who flooded back into the workforce after pandemic lockdowns, pushing participation in the labour market among working women to a record high of 85.6% in January.

But many didn’t return to prior jobs or industries and instead sought work that came with higher paid and “more productive” roles, the report found.

“High-contact sectors” like hospitality, for example, experienced an exodus of roughly 178,000 employees, when they were forced to close to quell Covid-19, said Freestone.

Many of the workers that fled these sectors were women. Despite filling about 55% of jobs in these sectors before the pandemic, women made up 80% of the movement away from them.

RBC estimated nearly 140,000 women streamed out of jobs in high contact sectors with many seeking roles in low-contact industries — professional, scientific and technical services and finance, insurance, and real estate.

“The majority of people who moved from these sectors into higher paying sectors did have a degree or a college diploma, so a lot of that was potentially women who were overqualified for positions moving into sectors that better fit their level of educational attainment,” said Freestone.

“And I think maybe women working in the hospitality sector saw other women who were able to work from home working in these industries like tech and finance, so I think there was definitely a pull to move into these industries that were more flexible.”

The reshaping of their careers was aided by more flexible work arrangements and affordable childcare, and many were in search of less Covid-19 risk and higher earnings.

However, many of their salaries still trail their male counterparts.

Though women accounted for 60% of jobs created in finance, insurance, and real estate over the course of the pandemic, women with degrees and working in finance, insurance, real estate and rental leasing earned roughly 85 cents for every dollar earned by men.

Across all sectors, women made an average of 89 cents for every dollar a man made in 2021, Statistics Canada’s latest data shows.