Women are retiring in greater numbers – and that’s a problem

Health care, retail trade and education/social assistance sectors especially hard hit

Katherine ScottThe labour market for women in Canada has been in flux since the pandemic began, hitting some women harder than others.

High demand for workers and high vacancies in many industries have pushed up wages in several select occupations, including professional services and information technology. But overall wage growth – and women’s wage growth in particular – has lagged behind inflation.

Now, nearly three years into the pandemic and many months into the steepest inflationary period in Canada in 40 years, more Canadian women than ever are exiting the labour market – and at an earlier age.

In fact, since September 2021, there has been a notable 25 per cent increase in the number of women retiring from the workforce, especially among those aged 55 to 64.

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The female-majority sectors of health care, retail trade and education/social assistance are particularly affected by this, with all sectors reporting record-high vacancies this year. And the absence of these workers is keenly felt in much-needed public services, as Canadians face long waits at ER rooms and witness a shortage of education workers in their children’s schools.

But is it any wonder that women workers, who’ve seen their after-inflation wages decrease precipitously, especially in industries battered by the pandemic, would leave the workforce in such high numbers and at such a comparatively early stage of their career?

Up until the pandemic, both women and men had been working later in life as compared to earlier decades.

The 2022 great retirement wave may well be reversing this trend with the exit of older workers in key industries experiencing labour shortages. The impact of this younger retirement wave – especially among women – is yet to be seen.

Female workers in Canada are already seeking better pay and working conditions where they can find them, but millions are still working for low pay.

In Canada’s care sector, where 75 per cent of workers are women, wages have increased only modestly since 2019, when they were already very low. Compare the $18.40 hourly wage offered for nurse aides, or $17.20 for early childhood educators, to the average wages offered in male-dominated sectors, such as oil and gas, which paid supervisors $43.05 per hour and workers $33.00 per hour in 2022.

Statistics have long shown that women are more likely to drop out of paid employment to manage care work at home, very often to their economic detriment. We saw this during the pandemic as women stepped up in the hundreds of thousands to manage rotating school closures.

Among the unfortunate impacts are the lowering of their overall earnings and pension entitlement and the consequence that too many older Canadian women live the end of their lives in poverty.

And if difficult working conditions ultimately contribute to early retirements and a staffing crisis in health care, education and the service sector overall, which solutions might we turn to?

Different governments are proposing solutions to the care crisis. But none have taken decisive action to improve wages and working conditions of care workers. This could include instituting better staffing ratios and pay; providing mental health days to prevent burnout; offering flexible schedules; creating mentorship programs for new staff; and streamlining immigration and registration processes for foreign-trained care workers.

Canada doesn’t have a national workforce strategy for the care economy – and that’s a major problem.

COVID-19 is leaving a long shadow on Canada’s labour market, forcing many women out of employment altogether. It’s an issue governments and employers cannot continue to ignore.

Katherine Scott is a senior researcher with the Canadian Centre for Policy Alternatives and serves as its director of gender equality and public policy work. She has worked in the community sector as a researcher, writer and advocate over the past 25 years, writing on a range of social and economic policy issues.

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