Tuesday, November 14, 2017

Canada's racial earnings gap is not due simply to discrimination

There was an interesting article about the widening racial earnings gap in Canada in today's business section. When I spotted that it was written by a C.D. Howe Institute staffer, I was immediately suspicious and on guard for bias, but it is at least written by an immigrant (born and educated in Iran), even if not a particularly visible one.
So, yes, according to the stats, the earnings gap between Caucasian and non-Caucasian is growing, as the Canadian workforce and its population as a whole becomes more diverse, although only very slightly: visible minorities earned just 81.2% of what "non-visible minorities" earned in 2015, down from 83.8% in the year 2000. And this is clearly not a good thing. But Ms. Mahboubi delves further into the stats in order to unpack these bare figures a little.
It seems that discrimination is not necessarily the major player here, even if it almost certainly plays some part. Place of birth, education, language fluency, work experience and occupation all have an influence on the earnings outcomes of visible minorities. For example, immigrant visible minorities earn substantially less  than Canadian-born visible minorities. Some four-fifths of immigrants to Canada are visible minorities, and they arrive facing challenges like language barriers, lack of Canadian work experience, and lack of recognition of foreign education and experience, all of which necessarily affect their employment prospects. Interestingly, even immigrants with apparently good educations often lag behind Canadians in both literacy and numeracy skills.
Studies differ as to whether visible minorities who live in cities - and bear in mind that 56% of Canada's visible minorities live in just three cities, Toronto, Vancouver and Montreal - benefit or suffer vis a vis earnings. Earnings disparities also vary substantially between different ethnicities: for example, Chinese employment earnings are 91% of non-visible minority earnings, while black earnings are as little as 73% (the main visible minority groups in Canada are South Asian: 25%, Chinese: 21%, and Black: 16%).
Canadian immigration is set to increase in the coming years in order to maintain long-term economic growth in a rapidly-ageing demographic, and most Canadians are on-board with that. The visible minorities earnings gap problem needs to be addressed (as does the gender earnings gap). But let's not pretend it is a simple problem of racial discrimination.

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