When Vice President Harris described the mass exodus of women leaving the labor force as a “national emergency,” she was absolutely correct. The U.S. regressed to 1988 levels in terms of women’s labor force participation, meaning we’ve lost 32 years of progress toward gender equity in the labor markets—all in a span of 11 months.
Gender inequity drains the economy
Women’s plummeting participation in the labor market is a national emergency because it’s a massive drain on our economy. Since 1970, women have added $2 trillion to the US economy through their increased labor force participation.
Pre-pandemic, we could have strengthened our economy by an additional $789 billion and $512 billion through closing the labor force participation and gender pay gaps, respectively. We’ve lost those opportunities plus approximately $1.4 trillion in labor force advancements in one year. That’s a $2.7 trillion loss for one country in a single year, owing to the pandemic’s scarring effects on gender equity.
Gender inequity cuts straight through the U.S. economy
You don’t have to look too far to see the economic damage of gender inequity. For one, gender inequity in the workforce impacts women and the households that depend on them. Since 1970, the share of breadwinner mom households in the U.S. has increased by 166%. Today, 40% of U.S. households with minor children rely on a breadwinner mom for economic security. When these women aren’t treated equitably in the workplace, it means their children (our future labor force) have fewer opportunities to get ahead.
Black children growing up in breadwinner mom households face some of the gravest disadvantages. That’s because Black breadwinner moms have the largest gender pay gap of any cohort of women in the U.S.: they earn 44 cents for every dollar white breadwinner fathers earn.
Here are more ways the gender equity gap hits the economy:
- Healthcare: Women head 72.9% of households enrolled in Medicaid. (Lower wages mean less ability to afford healthcare and more likely to rely on government support.)
- Higher education: Women make up 57% of undergraduates yet hold 67% of all student debt.
- International trade: In 2015 alone, US consumers paid $2.77 billion more for women’s clothing than men’s due to gendered import taxes.
- Social security: We could cut the Social Security shortfall by 35%, or $4.7 trillion, by closing the intersectional gender pay gap.
Turning national emergency into economic opportunity
To move forward, we must, as Vice President Harris put it, reimagine our economy. We must reimagine what it looks like to have an economy with equity at its core. In operational terms, there are three levers we can pull to create a more equitable economy and bring women back into the paid labor force.
Use pay as a proxy for progress
The U.S shaved off 22 years of progress toward gender pay equity during the pandemic. The five percentage point widening of the gender pay gap is one of the most concrete and tangible ways to measure gender equity. That’s why we need to implement a comprehensive national pay equity law—similar to what Vice President Harris proposed during her presidential campaign.
- Requiring all companies with 100 or more employees to earn an equal pay certification by proving they pay all genders the same for doing work of the same value
- Holding companies accountable to pay equity by requiring them to pay a penalty until they are compliant
- Taking into account intersectionality (i.e. gender PLUS race/ethnicity PLUS age) and employee internal mobility (i.e. ensuring all employees have pathways to advancement)
Mandating comprehensive pay equity is a tangible way to track progress toward workplace equity. Plus, it would immediately unlock $512 billion in economic potential.
Ensure equity of opportunity in the workplace
Working moms are the most productive employees over the course of their careers. They also financially support 71% of U.S. households with minor children. At the same time, 90% of women who leave the workplace when they have children leave for reasons other than having a child. This career fallout is colloquially known as the “maternal wall” or motherhood penalty.
We cannot expect women to return to our pre-pandemic workplaces because they are rife with inequity. We need to restructure the employee lifecycle so that employees of all genders, parental statuses, races, and ethnicities receive equitable performance evaluations, equitable rates of promotion, equitable growth opportunities, and equitable pay.
Companies should embed their talent operations with tools of the Fourth Industrial Revolution. Technology such as machine learning and cloud computing can weed out bias from all stages of the employee lifecycle and ensure every decision leads companies closer to equity.
Ensuring equity of opportunity in the workforce is critical to keeping women in it. After all, challenges specific to parents with young children (mothers especially) resulted in only “a negligible share“ of U.S. employment decline during the pandemic.
Focus on equitable skilling
Digital acceleration will—if it hasn’t already—render many of women’s pre-pandemic occupations obsolete. We catapulted five years forward in digital adoption all in a span of eight weeks during the early days of the pandemic. Going forward, the jobs with the highest risk of automation are the jobs where women are overrepresented (such as the consumer sector, non-profits, and media and communications), whereas the jobs of the future are the jobs where women are underrepresented.
As the World Economic Forum’s Global Gender Gap report found, only two of the eight “jobs of tomorrow” clusters have reached gender parity. As it stands, women hold less than 33% of all data and AI roles and represent less than 25% of the global talent base in many emerging professions, including AI specialists, back-end developers, big data developers, data engineers, DevOps engineers, front end engineers, and full-stack developers. In cloud computing, women make up a meager 14.2% of the talent base.
Using the Workforce Investment and Opportunity Act coupled with targeted skilling initiatives, we can ensure half the labor base, women, have access to the future of work. Doing so can not only spur a more inclusive recovery and equitable economy but also help mitigate the looming issue of bias in AI.
No more backsliding
In 2006, the U.S. came in third place out of 156 countries in terms of economic gender equity according to the WEF’s report. Today, we come in at 30 out of 156 countries. In 15 years, we have slipped down 27 spots. We cannot afford to backslide any farther. It’s time we architect an economy that works equitably for everyone, women included. There’s a $3.4 trillion upside when we do.
Katica Roy is the CEO and founder of Pipeline Equity.