The income gap between men and women managed to narrow year after year, largely helped in this by government transfers. Then the pandemic came to impose itself on a daily basis.
The Quebec Institute of Statistics (ISQ) released its analysis on income and low income in Quebec from 1996 to 2019 on Wednesday. Overall, the median after-tax income was $32,700 for individuals and $59,800 for households in 2019, compared to $20,900 and $42,800 respectively 25 years earlier.
The median after-tax income for women was estimated at $29,300, compared to $36,600 for men, a difference of $7,300, or 20%. This should be rejoiced, because “this gap is down sharply compared to 1996, when it amounted to nearly 40%,” underlines the ISQ. However, this development is not without reflecting the full scope of government transfers and their mitigating effect. If we exclude taxes and transfers from the calculation, the median so-called market income is $22,300 for women and $34,900 for men, a difference of $12,600, or 36% . For households, the difference in income depending on whether the main earner is a woman or a man goes from $17,400 with after-tax income to $21,700 with market income, a difference of 26% and 34% respectively .
The analysis also recalls that women remain more represented in the lower after-tax income brackets, with a proportion of 22%, against 17% for men. Conversely, only 5% of women were in the top income bracket, compared to 11% of men.
And the ISQ adds: “Analysis of statistics relating to market income indicates that when transfers and taxes are taken into account, the weight of the lower income bracket undergoes a significant drop. In 2019, the share of women in the first income bracket of the market was 41%, compared to 30% for men, indicating the impact of redistributive measures of wealth […] »
The arrival of COVID-19 and its variants could only darken the picture. This pandemic has been rather demanding in terms of work-family balance and has been particularly felt in sectors where there is an overrepresentation of women. Especially since part-time workers paid the minimum wage are mostly women. According to the Emploi Québec report, which compares the data for December 2021 to that of February 2020, employment was up 0.1% compared to its pre-pandemic level. The increase was observed in full-time (+1.1%), while part-time posted a drop of 4.4%. It was measured among men (+0.6%), while female employment is 0.4% below its pre-pandemic level.
On the other hand, it should be remembered that this health crisis has generated a wealth effect. By the end of December, Canadian households had accumulated an additional $277 billion in savings since the start of the pandemic. This surplus spills over to all income quintiles. National Bank economists have calculated that 29.8% of this additional savings is found in the upper portion, where households have an average disposable income of $183,000, and 24.6%, in the $107,000 portion. The so-called lower quintiles thus claim nearly 46% of the excess savings generated during the health crisis, i.e. 19.3% for the average household disposable income bracket of $80,000, 14.7% for that of 58,000 $ and, finally, 11.6% for the $30,000 portion, we have already written. However, the value of this additional savings is not without suffering the eroding effect of high inflation, which is felt more in the lower quintiles. National economists cite a Boston Federal Reserve study that found that in the United States, the marginal propensity to consume rises from 97% in the lowest portion to 48% in the highest segment, a gap that would not be so much different in Canada. And this weakest segment devotes proportionately more resources to food, housing and other current expenses aimed at meeting basic needs – where inflation hits harder – than to services and discretionary expenses.
As for the Low income component of the ISQ analysis, 16% of households found themselves in this situation in 2019, according to the low income measure and after tax — the difference with the Market Basket Measure is not statistically significant — this level has remained stable since 1996. Among individuals, 11% were in a situation of low income, a proportion that has also been stable since 1996 and is measured among both women and men.
On the other hand, in 2019, the low-income rate for households supported mainly by a woman was 21%, compared to 12% for those supported by a man.