The federal budget might have been sold on its female-friendly features, but business experts say it still falls short in solving the wage gap because the formula it uses to calculate employment insurance still favours men over women.
Under the government’s new EI Parental Sharing Benefit, a child’s second caregiver will now have the option to take five weeks of “use-it-or-lose-it” time off work, if the child’s other parent takes a leave.
How much that second parent earns while on leave is predicated around his or her average insurable earnings, but women stand to make a few hundreds dollars less on average because they typically earn 87 cents for every dollar made by a man, said Jennifer Robson, an assistant professor of political management at Carleton University.
She did the math and found that the average man who makes a claim for second-parent leave will make about $2,450, while the average woman will nab $2,190 for the five weeks.
“(The system) is really based on an instrument that was all about temporary wage replacement for people who are unemployed for a little bit. It wasn’t really designed to think about how you provide family benefits in that first year of having a child,” she said. “I think if we had to this over again we would want to design a system that has a different replacement threshold for lower income households than higher income households, so that we are looking at what the minimal level of acceptable income that families have.”
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Her suggestion would ensure that parents of any gender with low earnings can afford to take time away from work in the wake of their child’s birth.
A system that looks at income adequacy regardless of gender is “what I would dream of,” she said, “but that’s a longer-term issue that requires a fair amount of work.”
However, she said, “for the 2019 budget, they could conceivably say they are going to work towards a process to work towards that or look at that.”
Camilla Sutton, the new president and CEO of advocacy group Women in Capital Markets, said the budget is “moving in the right direction” and praised Robson’s calculations for bringing awareness to the ways women face inequality, but warned that evening out or changing the EI formula to account for the earnings differentials between men and women isn’t a cure-all for a wage gap.
“We have to attack the problem, not the symptom,” Sutton said. “If we make a shift in the EI formula, that is just a symptom. It has nothing to do with the cause.”
A big part of why the gap exists is that 40 per cent of women work in healthcare, education, accommodations and food services — industries that typically pay less than ones that men dominate in, said Sutton.
She’s also noticed more women than men opt for part-time work and take extended absences from work to raise children or care for elderly or ill family members, impacting their salaries.
She thinks the wage gap can be narrowed if the government focuses on childcare because many women must work fewer hours or in low-paying jobs to be able to raise their children. Access to childcare in Canada has long been criticized as deficient because there are a lack of daycare spots and affordable care options, say experts, who have seen waitlists for spots balloon in the last decade.
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Sutton also wants the government to tackle the dearth of female entrepreneurs because she said only one in six start-ups is started by a woman.
She stressed that real change can come from turning the country’s attention to the future of the workforce and opportunities in science, technology, engineering and math (STEM), where women only hold 25 per cent of the jobs in such fields in Canada.
“If we really want to change the gender gap in Canada, we need to increase girls’ participation in STEM immediately,” she said.
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