The Economic Benefits of Closing the Gender Gap

Exploring the consequences of an economy where women are given an equal opportunity to pursue.

Ellen McGirt (Senior Editor at Fortune Magazine), with Anne-Marie Campbell (Home Depot’s Executive VP, U.S Stores), Thasunda Ducket (JP Morgan Chase’s CEO, Consumer Banking), and Mellody Hobson (Ariel Investments, President). Source

The XXth century was an awkwardly bittersweet time for everyone. Along with the rise of nationalism came independence movements, proxy-wars, and borders our parents and grandparents found very hard to keep track of. Drawing and redrawing these borders brought along wars and famine. Havoc was brought upon the lives of innocents in the name of these arbitrary borders. We saw an accelerated increase of populations displaced by violence. Demagogic nationalism brought about menacing xenophobic repercussions.

Nevertheless, human beings proved their resilience by achieving massive achievements in the midst of tragedy. Scientific breakthroughs such as antibiotics, airplanes, the radio, television, and the internet changed population dynamics for the better.

According to research conducted by the International Monetary Fund (IMF), the overall world economy in the XXth century saw a major boom. Compared to developments in previous centuries, the 1900’s witnessed an astounding growth in population size, and economic productivity. The reasons for this trend can be accredited to the following dynamics:

1. The production of goods and services improved dramatically due to investment in tech. These advances allowed for the support of richer standards of living over a larger segment of the world population than ever before.
2. The international financial system shifted to an overall capitalistic model that encourages the privatization of cash-flows. This allowed for a much more efficient interaction between trade groups. Consequently, we find goods as cheap as a $5 t-shirt.
3. Finally, the most important breakthrough of the XXth century must be the increased role of the public sector.

Population growth during the XXth century saw a major increase. Consequently, Global GDP increased as well. However, output growth exceeded population growth by a significantly accelerated margin.

Nation-states — specially postcolonial democracies- adopted constitutional languages based on humanistic accords. Equality, became a key theme that founders of modern nation-states returned to as a pillar of value. In the United States, Thomas Jefferson coined the phrase “All men are created equal”, appearing for the first time in the country’s constitution. As idealistic as this phrase may seem, the hypocrisy of the matter prevented the United States from gaining true economic prosperity for a very long time.

Warren Buffet has continuously shown optimism on economies with high gender equality

The XXth century also saw an increased percentage of women in the workforce. Warren Buffet argues that the American economy lagged for many years due to the fact that it was utilizing only half the workforce.

“For most of our history, women — whatever their abilities — have been relegated to the sidelines… Only in recent years have we begun to correct that problem.”

With a limited workforce, businesses missed the opportunity of hiring the best talent because they are only seeing half of what is out there. When a group of people compete for a job, recruiters want to hire the most talented professional. With only half the workforce allowed to compete, achieving true meritocracy became almost impossible. Rachel Vogelsten, senior fellow at the Council on Foreign Relations argues that

The Coalition of Labor Union Women is America’s only national organization for union women. Formed in 1974, CLUW is a nonpartisan organization within the union movement. CLUW members speak up on equal pay, child and elder care benefits, job security, safe workplaces, affordable health care, contraceptive equity, and protection from sexual harassment and violence at work.

“Today, in 2018, we have a strong body of evidence that shows that women’s participation in the economy is critical because when women are able to fulfill their economic potential, GDP goes up and poverty goes down,”

Source

Progressive hiring practices tend to gain more productive results, including higher paychecks for all demographics. Research on labor inclusivity indicates that populations as a whole reap the benefits of a more inclusive workforce. Harvard Business Review, cities in the United States that have a higher participation of women in the workforce tend to have much more prosperous and resilient economies.

Dr. Agnes Binagwaho is a Rwandan pediatrician who served as the Minister of Health of Rwanda for 5 years. She is credited with creating a significant shift in Rwanda’s healthcare system.

One of my favorite examples of women-lead economic resiliency is the case of Rwanda. From April through July of 1994, Rwanda was a living hell. Millions of civilians lost their lives, and the survivors were left with unimaginable traumas that would take years to heal. The majority of assassinated victims during the genocide were men. As a result, its population ended up with a visibly disproportionate gender dynamic.

Prior 1994, gender norms in Rwanda were no different than their post colonial neighboring nations. However, the unimaginable terror that the genocide wreaked in the nation, left Rwandans with no other option but to work around these absurd norms of conduct.

Akilah Institute graduates, Lydia Uwimbabazi and Allen Kazarwa now work at the Kigali Marriott Hotel. The Akilah Institutei s a driving force of women’s employment in Rwanda. The institute works with international companies to train and empower Rwandan women, and build a future generation of leaders and professionals. Source

The women of Rwanda took matters on their own hands and decided to rebuild the country from scratch. The majority-women government rebuilt its constitution, healthcare, education, judiciary, and nation as a whole. The introduction of women in the Rwandan workforce, created a generation of business owners, and skilled professionals. This workforce today focuses on rebuilding its market brand by luring private investment via meaningful global relationships.

By all means, the nation of Rwanda has a long way to go in order to achieve the growth it seeks. Nevertheless, the nation of Rwanda taught the world how national resilience is based on unity.

The XX century was a time of struggles and social victories. From the rise of women in the workforce, we learn a valuable lesson of profit maximization via inclusive labor dynamics. When only 50% of the population is participating, then the economy lags. But when a greater percentage of members are able to join the workforce as equals, an economy is allowed to achieve its fullest potential.

Source

Women workforce participation varies significantly across nations, and even though there has been an inclusivity increase, the numbers are still problematic. Gender norms continuously prevent women from pursuing their career of choice, and compartmentalize men into traditional roles that discourage efficiency.

Solutions to the issues of gender disparity in the workforce can be dealt with from multiple angles. However, what I would like to highlight is the role parents have in raising their children to become aware of these norms. Research has proven that girls spend a significantly higher amount of time doing house chores than men. This leads to the reinforcement of unequal expectations based on gender, and the under-appreciation the labor put in by women.

Maria Alejandra Pareja is a University of Wisconsin alumna with a B.A in International Studies and Communication Arts