Employees in Canada’s tech sector earn significantly less than their American counterparts, new research from Toronto Metropolitan Univerity reveals.
The research from Vivian Li, Mahmehr Hamza, and Anusha Arif shows tech workers in the U.S. were paid 46 percent more. A typical annual wage for a tech employee in Canada is $83,700, while in America, it’s $122,600. The analysis adjusts for several factors, including cost of living and purchasing power.
Researchers collected data through the 2021 Canadian Census. They examined wages in the U.S. through three separate data sets, including figures from the U.S. Bureau of Labor Statistics’ Occupational Employment and Wage Statistics.
Image credit: Compensation Disparity Between Canadian and American Technology Workers.
The research notes Canada has a higher share of part-time, part-year workers, which explains 10 percent of the pay disparity. The research also notes that Canadian tech employees are paid the same, whether or not they work in a tech hub like Toronto or Kitchner-Waterloo. In comparison, tech employees in the U.S. who worked in hubs got a “notable pay premium.”
Gender and race
While the research notes the gender pay gap in Canada is lower than in the U.S., it still exists. In Canada, male tech workers make 17 percent more than their female counterparts. In comparison, male employees in the U.S. make 26 percent more.
The research also notes that tech sector employees who are South Asian, Chinese, or Japanese make more than other racial groups both in the U.S. and Canada.
In the U.S., tech workers who are Black, American Indian and/or Alaskan Native, Native Hawaiian or Pacific Islander make the lowest wages. In Canada, this category applies to Black, Arab or Filipino workers.
What Canada needs to do
The researchers note the compensation difference will have “stark implications” on Canada’s tech sector.
Combining the lower pay with the higher cost of living, especially in the Greater Toronto Area and Greater Vancouver Area, there’s little attraction for people to work in Canada.
The researchers list two calls to action.
The first is to create policies that allow tech companies in Canada to grow and have the ability to pay their employees more. “It is important to build a supportive start-up and scale-up environment, and provide investment-friendly incentives. A key part of this includes attracting foreign direct investment and venture capital.”
The second is to ensure every worker has the opportunity to participate.
“To build a thriving and competitive tech industry in Canada, it is important to do so responsibly, which includes ensuring that the relatively larger disparity in racial and gender wage outcomes that exists in the US tech industry is not replicated in Canada.”
Solutions for this call include reducing barriers to education and supporting mentorship programs that target underprivileged groups.
Image credit: Shutterstock
Source: Toronto Metropolitan University
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