The Gender Pay Gap, Ask Gap, and Reality Gap in 2023

03.17.2023 - By: Anastasia Barbuzzi

$HMONEY Radio recently celebrated 100 episodes on International Women's Day. The Government of Canada's theme for IWD 2023 was 'Every Woman Counts,' so why do we make 89 cents for every dollar a man does?

Despite Canada ranking globally amongst the top 10 countries for financial literacy amongst youth, the general sentiment for most Canadians towards their money management skills is shame, regret, and self-doubt, with 62% of parents surveyed feeling that their financial situation or decisions had impacted their mental health - a sentiment disproportionately higher among women (65%).

Research shows that women face different and greater financial challenges than men, including systemic and societal barriers to economic resilience. In the labour force, incomes are also lower for Indigenous, immigrant, and racialized women. In addition, women are more likely than men to be single parents and work in fields with precarious positions and low wages.

Even women business owners face more significant barriers to financing and are more likely to be rejected or receive less funding than men. Knowing all of this, I had to cover the current gender pay gap, ask gap, and reality gap on the podcast and blog.

#DATADONTLIE

GENDER PAY GAP

A new report by the World Economic Forum says that it will take another 132 years to close the global gender gap.

There have been laws about pay equity in Canada since the 70s. It's still defined as "equal pay for work of equal value" by the government.

It's illegal to pay women less than men in Canada, yet, Stats Canada reports that women make 89 cents of every dollar men make.

According to the Canadian Women’s Foundation, pay inequity is so crucial because earnings are a key determinant of economic well-being in Canada. It is also “symbolic of gender-based discrimination and injustice.”

The gender pay gap connects directly to other economic-related gender gaps, including fields of study and work, career advancement opportunities, and time allotted to unpaid care and domestic work.

It’s one of the root causes of gendered poverty.

Women are more vulnerable to low income than men in Canada, partially due to the gender pay gap. Overall, a lifetime of pay inequality between women and men means that women are disproportionately retiring into financial insufficiency and even poverty.

ASK GAP

According to 2020 data from Hired.com about the 'ask gap,' women asked for 3.3% less than men for the same role.

A new case study from the BBC defined the ask gap as "the difference in salary expectations between groups, which undercuts women and minorities in particular."

Closing the gendered and racialized ask gap can pay significant career dividends, reducing long-term salary inequality.

Ask gaps have many culprits, but the key among them is the devaluation of women relative to men. Men are more likely to have inflated perceptions of their value, making them more comfortable asking for what they're worth because they don't need to worry about experiencing backlash.

In contrast, women may be apprehensive about appearing greedy or pushy in negotiations or about hiring managers withdrawing or lowballing offers.

Facing 'double backlash' means it can be challenging for women to 'win' at negotiating, regardless of their tack. Being 'too forceful' or 'masculine' can produce a negative perception that they're not collaborative or cooperative.

On the other hand, if they're 'too nice,' collaborative, or communal, they're perceived to be weak or not as competent.

REALITY GAP

A new gender equality survey from Bumble suggests a "reality gap" regarding what Canadians think versus what they experience.

According to the app's annual "state of the nation" report, nearly half (49%) of Gen Z believes that equality between women and men is improving in Canada but that women are still way behind men.

In reality, the gender wage gap has barely budged since the 90s.

Ironically, of the 2,500 adult Canadians included in the survey, nearly all (93%) agreed on a definition of gender equality; that men and women are equal and should be given equal opportunities in all things.

The same percentage of respondents agreed that improving women's rights makes the world a better place for everyone. However, 79% of them- including 86% of women surveyed- believe that women must compromise between career, relationship, and family in a way men do not.

This data reflects the "reality gap" between beliefs and experience.

WHERE DO WE GO FROM HERE?

I recently read something in The Financial Diet's newsletter that perfectly encapsulated 'what's next' in the fight to close the gaps described in this post. They said, "There isn't any one answer for what we can do to eliminate wage discrimination; it's an ongoing fight and uphill battle of unlearning and breaking toxic generational, patriarchal, and racially-rooted traditions. However, in the meantime, we can minimize what it looks like for each of us, depending on the circumstances."

So, here are a few actions the collective can practice to make progress:

First, awareness of disparities in ask gaps is needed – and what perpetuates them.

Second, we need to disclose wages. There's still a stigma surrounding salary-sharing, but understanding a company's budget and financial bandwidth can help reveal details about how much more they should be paying you and, ultimately, how much more you should be asking for.

Third, we need to adjust our work output. Creating boundaries for yourself in the workplace, like setting a hard start and finish time or placing your emails on 'Do Not Disturb' outside of work hours, is critical to your well-being and ensuring you're not doing any work you're doing not fairly compensated for.

Fourth, negotiation training could help women become more confident in discussions about pay and less afraid of backlash from employers.

Want to see annual Gap Reports? Let me know in the comments! They’re always open for questions and comments as well 💚