26 September, 2019 3:44 PM

Report finds immigrant wage gap costing Canada $50 billion a year in GDP

According to an article by Christopher Reynolds in The Canadian Press, the growing wage gap between immigrants and Canadian-born workers has hit a new high, with new Canadians earning 10 per cent less on average

The gulf, which spans age, gender, region and occupation, is costing the country $50 billion each year, according to an RBC Economics study. The problem stems from a failure to adequately recognize credentials and work experience abroad, said Dawn Desjardins, deputy chief economist at RBC Economics.

About 38 per cent of university-educated immigrants aged 25 to 54 work at a job that fits their education level, compared with more than half of their Canadian-born counterparts.

"That means we’re not really maximizing that education, but as well we’re not necessarily maximizing the experience that some of these workers have," Desjardins commented.

"We’re not really correctly valuing their contribution to Canada’s economy, to the labour market. And therefore we’re leaving on the table, I would say, some of this excess return we could be accruing to the economy overall."

More than half of the earnings gap - the shortfall is 18 per cent for immigrants aged 45 to 54 with a bachelor's degree or higher - can be attributed to employers discounting work experience gained in other countries, she said.

The gap in median earnings is nothing new but has risen over the past three decades, climbing to 10.3 per cent in 2016 from 3.8 per cent in 1986. The report notes that Canada remains popular among - and reliant upon - immigrants.

A recent Gallup poll found that the country came second only to the U.S. as a desired destination.


Be the first to comment

Please check your e-mail for a link to activate your account.