Gender inequity costs the United States $2 trillion in lost GDP

Everyone stands to gain if women are paid fairly and wealth is distributed more equitably. Not doing so means even rich people are losing out.

Gender inequity costs the United States $2 trillion in lost GDP
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In the United States today, the top richest 400 Americans own more wealth than the bottom 60%. That is  about 150 million people. We haven’t seen this type of wealth concentration since the 1920s, right before the Great Depression.


For most people, wealth equals security. But for the affluent, wealth equals political power and political power influences laws that keep the rich wealthy.

To add fuel to the fire, look no further than the current state of gender equity. Since 2017, we’ve seen the number of female CEOs in the Fortune 500 drop by 14%. We’ve also added 47 years to the time to gender equality (globally) and seven years to the time to gender equity in North America. And since 2015, 70% of states have either stood still or moved backward in gender equity.

All of this is happening despite the fact that women continue to attain 57% of bachelor’s degrees and higher. Since educational attainment is the key ingredient in closing the gender gap, it shows that women are doing their part.

What does wealth equality have to do with gender equity?

Let’s return to that list of the richest 400 Americans. Only 57 people on the list (14%) are women. Yet, women are 51% of the population and 47% of our labor force. There is a distinctive 37-point gap. Globally, we have a 38-point gap. Women are 50% of the world’s population and represent just 12% of the richest people. In other words, women are underrepresented among high-income earners and overrepresented among low-income earners.


The overrepresentation imbalance

Women are overrepresented among low-income earners. Why is this the case?

For one, women dominate low-paid occupations. They are tracked into pink-collar jobs such as nursing, teaching, cleaning, and human resources. These jobs typically pay less than jobs in industries that are male dominated. In 2014, 44.4% of employed women in the U.S. were clustered in just 20 occupational categories, of which the average annual earnings were $38,779.

Compounded by this fact is that oftentimes women are trapped in these pink-collar jobs, as well. Referred to as “the pink ghetto,” pink-collar workers suffer from a lack of career opportunities and career paths.

And consider this: Women are 62% of minimum wage workers and only 5% of Fortune 500 CEOs. This is a huge discrepancy.

The underrepresentation imbalance

Women are underrepresented among the rich because we have a leaky talent pipeline, and it’s women who are falling out of it.


We know that men are promoted at a 21% higher rate than women during critical early-career stages. White men account for 72% of corporate leadership at 16 of the Fortune 500 companies. Even in female-dominated industries such as healthcare, women make up the bottom rungs of the ladder.

Sales departments have the second-largest gender gap in their leadership of any corporate function, which partially explains the leaky talent pipeline. In 2015, 90% of new CEOs had sales experience and 100% of them were men. Women are underrepresented in these lucrative sales positions that often lead to the C-suite. In fact, the percentage of women in frontline sales management has remained flat for more than 10 years.

The consequences of wealth and gender imbalances

Gender equity affects the affluent, because when women get left behind, everybody–from low-income to high-income–gets left behind. Our society is paying a high price to maintain gender inequity. By digging into the data, we find that gender inequity costs the United States $2 trillion in lost GDP.

The data further reveal how we can unlock that $2 trillion economic potential.

Increased gender equity = increased revenue

Pipeline conducted a study—comprising 4,161 companies across 29 countries—and concluded that for every 10% increase in gender equity toward parity, there was a 1%-2% increase in revenue. That’s just good business sense.


Increased female leadership = increased return on equity

Investors would be wise to consider the number of women in management before making a decision with their pocketbooks. According to Credit Suisse research, having women in senior management leads to a 19% higher return on equity as well as 9% higher dividend payments.

Increased gender equity = increased sales force productivity

Companies depend on their sales teams to bring in revenue. No sales team, no business. What’s interesting is that companies could double their revenue by having more gender-diverse sales teams. Research found that companies with a 45% or greater gender-diverse sales force report higher sales revenue and higher profitability.

By closing the gender equity gap, we have the potential to add $2 trillion to domestic GDP and $12 trillion to global GDP. Our economy, our labor force, and the people who rely on our labor force all stand to benefit from an accomplishment such as that.

Increased gender equity can lead to fair wealth distribution

When we have a 37-point gap in the voices bending ears in the halls of power, we have a problem. Don’t forget that we still have a 27-point gap in Congress. More affluent women mean more women contributing their voices to the political issues shaping our society.

By closing the gap and increasing female representation in our legislative bodies, we can begin to craft sound policy solutions that lead to better economies.


We are paying for people no matter what. The good news is that we have a choice. We can choose how we pay for them. Let’s take the view of investing in our labor force–now and in the future–to ensure we expand the economic pie for all.