The $4.3 Billion That States and Localities Are Missing Out On

Economic output would get a big boost if more women were in the workplace. A new report shows how far places have to go to close that gap.
by | July 8, 2016
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Want to grow your economy? Close the gender gap.

That’s the advice from a new report that says states and cities could add up to $4.3 billion to their annual economic output simply by focusing on policies that create a more equitable environment for women in the workforce.

The report, produced by the think tank McKinsey Global Institute, looked at levels of gender equality in measurable areas like political representation; workforce participation and leadership; educational attainment and teenage pregnancy rates. Overall, researchers found high gender inequality in many states and in some of the top 50 largest metropolitan areas.

"The real opportunity here is for a state to say, 'How could we do better? What are the levers that we can pull to get motivated and begin to address this?'" said Vivian Riefberg, one of the report's authors.

The idea behind measuring parity is that states and localities have untapped potential when it comes to women’s contribution to the labor force. By addressing inequality, the report says, all states could increase their annual GDP by at least 5 percent by 2025. That would add $2.1 billion to the economy. If states reached full gender parity, the net gain would be $4.3 billion in GDP. That gain represents a nearly 20 percent boost over what economists think the U.S. will produce in 2025.

Some argue, however, that the market and changing cultural norms are already doing enough to close the gender gap: Colleges are graduating more women than men; women under 30 earn more than their male counterparts in most of America’s largest cities; and women now make up about half of the workforce. Just wait, the argument goes, and the gap will take care of itself.

With economic changes over the past decades that included a decline in manufacturing, industrial and construction jobs that were mainly dominated by men, "the balance has shifted in favor of women who are more prevalent in mid-level jobs such as nurses, teachers and administrators,” wrote Morgan Brittany, a conservative political commentator and author.

But Riefberg argues that the report's findings paint a different picture. It shows that states and cities still have high gender inequality, and that even the best rated states have work to do.

Take Maine. It has the highest so-called gender parity score at 74 percent. Women in Maine have high rates of educational attainment and low maternal mortality rates. But they also have low political representation.

Meanwhile, Alaska has the lowest parity score of 58 percent. It ranks among the worst for political representation and has one of the lowest scores when it comes to sharing equitably with men unpaid elder or child care responsibilities, which the report says cuts into a woman’s overall paid work productivity. Rhode Island was the only state with a perfect score in that category, meaning men and women share unpaid care work equally.

Region by region, Southern states performed the worst when it came to teenage pregnancy rates, political representation and the rate of single mothers. States in the Northeast have the lowest teenage pregnancy rates, while Midwest states have the lowest maternal mortality rates. Political representation parity was low everywhere. But the biggest gap is between the South and Western states, where women are twice as likely to have a woman representing them than in Southern states.

Women fare better in some large cities. Of the 50 largest metro areas, three -- Atlanta, Baltimore and Sacramento, Calif. -- had parity scores above 80 percent. The three cities have or recently had female mayors. And Atlanta has a nearly equal number of women to men in professional and technical jobs.

States and regions that want to close the gender gap should look to areas where they have the most room for improvement, said Riefberg. Consider teenage mothers, which studies show have less education and are more likely to live in poverty. Places that want to lower their teenage pregnancy rates could look to Colorado’s Family Planning Initiative, which focuses on lowering the cost of long-acting, reversible contraceptives like intrauterine devices. The program led to a faster decline in teenage pregnancy than in any other state.

If unpaid care work is a state's weakness, officials may want to consider implementing paid family leave. “If there is no paid parental leave, women are more likely to drop out of the workforce,” the report said.

“It’s important that people look to the circumstances of their state and community," said Riefberg, "and put their recipe together with the help of other parties like nonprofits and business and educational institutions."