The Immigrant Wage Gap Is Real And It's Actually Costing Canada Money
The gap has been growing bigger since the '80s.
There's been lots of talk about wage gaps and pay gaps when it comes to women and people of colour but a new report specifically aims to tackle the immigrant wage gap. An RBC Economics report states that the immigrant wage gap in Canada needs to be closed. The gap has continued to grow over the last 30 years.
RBC Economics recently released a report about the immigrant wage gap and in it, they call for the gap to be closed in Canada. The report claims that Canada is good at attracting immigrants, especially highly skilled ones, but when it comes to integrating them in the workforce the country falls short.
"Even as the balance of immigrants has shifted towards those with more skills and education, immigrants aren’t being fully rewarded by the labour market for the attributes that got them accepted in the first place," the report states.
Immigrants get paid 10 percent less than Canadian-born workers who are their peers. And this gap is very broad. It is seen across occupations, ages, genders and regions.
That gap is growing. Just 30 years ago immigrants earned only 4 percent less than their Canadian-born counterparts.
The immigrant wage gap jumps even higher to 18 percent when it comes to people aged 45 to 54 with a university education.
An interesting finding from the report is that immigrants who come to Canada before they are 16 years old don't actually face the wage gap which is different from those who come here when they a little bit older or adults.
"[This] adds weight to the view that a root cause of the immigrant wage gap is a lack of time spent in the Canadian labour market," the report states.
RBC Economics is urging that the immigrant wage gap be closed because it's actually costing Canada money, specifically $50 billion which is 2.5 percent of our GDP.
But hope is not lost.
In 2015 the federal government introduced Express Entry. The program makes it so immigrants are allowed into Canada quicker if they are skilled workers who plan to contribute to the economy.
According to RBC Economics, this helped narrow the employment gap but there is still no sign of whether it will have any impact on the wage gap.