Gender Parity’s Untapped Economic Potential
Growing the power of women in the workforce is about more than fairness. It could add trillions to our economy, and a new report shows the way.
Every revolution begins with a desire for fundamental change. Ideas are debated, options narrowed, strategy planned and a blueprint for action developed. Supporters are enlisted. A storyline created. Resources are mobilized. And the revolution begins.
A report published by McKinsey Global International in April imagines a workforce revolution with gender parity as the outcome. "The Power of Parity: Advancing Women's Equality in the United States" estimates that realizing the full potential of women in the workforce could boost GDP in the United States by 0.8 percent in just nine years. That amounts to $2.1 trillion, and it's a conservative estimate. Every state and local government has the opportunity to add at least 5 percent to its economic output, and half of the states could increase their GDP by 10 percent, McKinsey's researchers conclude.
McKinsey's striking numbers couldn't come at a better time, given our intensifying efforts to elect more women to public office, appoint more women to corporate boards, hire more women CEOs, allow women to assume combat duties in the military, and finance more women-owned businesses.
So imagine if every governor had a blueprint for boosting GDP by billions of dollars by 2025. Imagine if the mayors of the largest cities had a map of the levers to pull and push to create jobs while achieving greater social good. And imagine if there were actually instructions to accelerate those changes state by state, city by city.
The McKinsey report is that roadmap. By pulling levers in three categories, governors and mayors could boost GDP and the United States and could create 6.4 million jobs while increasing productivity:
• Forty percent of the gains would come from higher female participation in the workforce.
• Thirty percent would come from increasing the number of women who work full-time.
• And another thirty percent would come from increasing female employment in higher-paying, more-productive work -- manufacturing, professional and business services, leisure and hospitality, and trade.
The roadmap details how each state might get there by addressing six societal gaps or "impact zones": corporate leadership, unpaid care work, single mothers, teenage pregnancy, political representation, and violence against women.
New Mexico, one of just six states with a woman governor, has the greatest potential for gains -- a projected 18 percent increase in GDP. Its workforce revolution would include dramatically increasing the number of women in the labor force, by 62 percent: increasing hours worked by women by 21 percent, and raising the percentage of women in professional sectors by 18 percent.
Goals like those may sound daunting or unrealistic, but they are achievable. Increasing the number of women in the labor force would require a combination of social policy and investment: supporting single mothers with child care and flexible schedules; paying women for now-unpaid work; decreasing violence against women through community policing and collaboration with nonprofits and health-care providers; and giving women a legal and political voice to make such policies by increasing the number of elected and appointed women at the state and local level.
And what's true of states is equally true of cities. San Antonio could start today toward a $12 billion, 9 percent increase in GDP by 2025. Targeting highly educated and skilled women who have left the workforce mid-career with flexible schedules to rejoin the labor pool is a first step. Lowering teen birth rates would address another high-impact societal gap. And decreasing violence against women -- San Antonio has an extraordinarily high 46.46 rapes per 10,000 women - would have a profound effect: fewer victims of violent crime and more women able to financially support themselves.
In my hometown of Sacramento, women already benefit from California laws requiring paid family leave and the nation's strongest pay-equity law requiring equal pay for equal work. However, the region has work to do in the female-to-male ratio of higher education. The more educated women are, the more women qualify for better pay in management, manufacturing and professional services. Single mothers with children represent 20 percent of the region's population; support for child-care stipends or employer-supplied child care, flexible schedules and better transportation networks could help these moms get and keep jobs. Pull these levers and Sacramento stands to see a GDP increase of over $12 billion by 2025.
The power of parity is a lesson in simple economics. Increasing the number of women working, and the number of them in full-time, higher-paying jobs, boosts the wealth of the community and the state. Accelerating the progress toward general equality in work -- and gender equality across society -- should be part of every economic-development strategy. It's all in the numbers. There's really no argument for leaving $2.1 trillion on the table.
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