Ethnic Earnings Inequality in Canada

Abstract

<p>Evidence in the literature and from the 1991 Census indicates that there has been significant educational and occupational mobility among Canadian ethnic groups over the past decades. The extent of ethnic mobility in earnings, however, has been quite different from that in education and occupation. The present study re-examines the issue of ethnic and racial inequalities in earnings and evaluates two contending views, namely, the Vertical Mosaic thesis, which emphasizes ethnicity as a fundamental basis of social stratification in Canada, and the New Mosaic thesis, which stresses ethnic mobility in socioeconomic status. Based on the Public Use Microdata File on Individuals drawn from the 1991 Census of Canada, it is found that, while earnings differences were not profound either among European groups or among visible minorities, substantial disparities existed between these two broad categories to the disadvantage of visible minorities. It is therefore argued that neither the Vertical Mosaic thesis nor the New Mosaic perspective is adequate in describing current Canadian society: the Canadian Mosaic is still vertical, but race has replaced ethnicity as a fundamental basis of stratification in earnings. In a regression model estimating the extent of "direct" pay discrimination, or "unequal pay for equal work," ethnic differences in a number of earnings-related variables were statistically controlled. Substantial earnings differentials were again found, though to a lesser extent, largely between European groups and visible minorities. Such discrimination was further demonstrated when ethnic earnings differentials were estimated within educational and occupational categories and within immigrant cohorts. It is evident that equal work was not paid equally and that racial discrimination was still a significant phenomenon in the Canadian labour market in the early 1990s.</p>