“Snail’s pace” for women’s pay growth comes at a high cost
- Global GDP would jump by 31 percent, or $28 trillion, by 2025 if women’s economic equality was advanced, Bank of America estimates.
- The U.S. lags other developed nations in both pay and gender policies, with the average S&P 500 board including just one woman for every four men.
- Women who work outside the home are paid an average of $11,000 less per year than men.
Women’s progress in the workplace is stalling out by many measures, even as economists argue that tackling the gender pay gap and providing more work opportunities for women is necessary to boost global growth for everyone — women and men.
The theme of this year’s International Women’s Day is “Balance for Better,” or the idea that equality between the genders can lead to greater prosperity and opportunities for all. But the U.S. has a long way to go.
“The economic gender gap is reducing at a snail’s pace,” Bank of America said in a report examining the potential impact of equal economic footing for women. “Our analysis suggests women diversity can boost [return on equity], profits, dividends and market cap, at a lower risk.”
The findings come amid International Women’s Day, celebrated on Friday, when the outlook for women’s economic future remains mixed. Despite more attention paid to issues like pay equality and gender bias in the workplace, the gender pay gap remains stubbornly stuck at women earning about 80 cents for every $1 men earn.
By some calculations, the pay gap is even deeper. Alast year from the Institute for Women’s Policy Research found that women earn just 50 cents for every $1 men earn, once part-time workers and those who take time off for caregiving is factored in.
The problem, economists said, is many women have been left out of a growing economy. In some cases, it’s because women are getting left out of — or even pushed out of — high-paying fields like tech.
Others point to the unpaid burdens that women still take on across the globe, such as child care and housework. Women perform at least 2.5 times the amount of unpaid work done by men, a burden that hampers women’s labor force participation, Bank of America said.
After growing sharply in the 1980s and 1990s, the labor force participation rate for women has declined from its peak of about 60 percent in the late 1990s. In January, 57.5 percent of women worked outside the home. By comparison, more than 69 percent of men are working.
“While the economy is booming, women’s median weekly earnings have stayed flat, and even declined for black women,” said economist and IWPR President Heidi Hartmann, a MacArthur “genius grant” recipient, in an emailed statement. “This should be a warning sign to policymakers and business leaders, that they must take stronger action to make sure women have equal opportunity to get the higher paying jobs employers have to offer, and that, when in jobs where men also work, they are paid equally.”
Women often run into obstacles in their workplaces after they have children, researchers said. The gender pay gap sharply widens for women with children, rising to 30 percent less than what men earn compared with 10 percent less before they had kids, a study from the U.K.’s Institute for Fiscal Studies found.
Partly this may be due to women taking on more unpaid child care after they start families, but research also indicates the pay penalty for mothers may be tied to gender bias. About four in 10 men said they believe women shouldn’t earn equal pay if they receive more family leave than men, according to a new study from recruitment firm Randstad U.S.
In the U.S. — the only developed nation without national paid family leave — only 14 percent of U.S. workers have access to the benefit, according to the Pew Research Center. Many women take unpaid leave to care for children, while men are more likely to remain at work after they become fathers. They’re also likely to receive a “fatherhood bump” of 6 percent higher pay, researchers have found.
Other researchers have sent out 600 fake resumes to test how employers view women with children versus other job applicants. The resumes were for a woman without kids, a mother and a father, and the researchers found the applicant who was a mother was half as likely to be called in for an interview.
The upside of gender equality
Fixing these problems could go a long way to boosting economic growth, Bank of America said. Companies with higher management and board gender diversity provided stronger returns on equity to their shareholders, while also demonstrating lower earnings risk, the analysts found.
To be sure, getting women to an equal footing as men in the workplace remains complicated by issues like gender norms in jobs — women are more likely to become nurses, while men become doctors — and society’s deeply rooted beliefs about gender and abilities, which aren’t easily erased.
Policy experts said the problem shouldn’t be shifted onto women to solve, pointing out that men need to take on more caregiving duties at home, while governments should provide more support for child care services and universal pre-K. Lots of upside can be gained by taking such actions, according to Bank of America.
Its analysts noted: “The U.S. economy could be $1.6 trillion larger (8 percent of current GDP) if women’s labor force participation was on par with Norway’s,” which, while not Europe’s highest rate, stands at about 61 percent compared with 57.5 percent in the U.S.