Gender Inequality: The $28 Trillion Price It’s Costing the World
We’re missing out, guys and gals.
Equality is the soul of liberty, or so they say. In order to achieve that ultimate liberty, though, there are inevitable obstructions along the way.
A recent study from McKinsey Global Institute on gender equality in the workforce not only indicated how much farther we still have to go on the matter, but uncovered how much latent value can actually be realized if true parity is attained.
The research firm found that in a “full potential” workforce scenario — one in which men and women are absolutely equal across the board (participation, hours, pay, etc.) — it would add an extra $28 trillion, or an increase of 26%, to the global economy by 2025.
“Women are half the world’s working-age population but generate only 37% of GDP.”
Considering the magnitude of this ideal scenario, not to mention the quixotic time frame it commands, the authors also offered up an alternative, less challenging outline, in which each country around the world improves its efforts at the same rate as the best-performing country in that region.
For example, countries in Western Europe would look to Spain’s solid performance and bridge their gaps accordingly, while those in Latin America would mirror Chile’s progress.
Under that scenario, an additional $12 trillion can be potentially tacked on to the global economy by 2025.
To arrive at its conclusions, McKinsey examined 95 countries across the globe and analyzed their current and potential economic output. It then placed the countries into one of 10 suitable regions, and applied its own gender equality indicators to them and categorized appropriately.
The largest drivers of that additional $28 trillion varied by region, but for a majority, an increase in the labor-force participation rate consumed the bulk of it. India stood to benefit the most, as boosting the rate for females would contribute as much as 90% of the total additional economic impact.
Increasing the amount of hours worked, too, could provide some fuel to growth, as both Western Europe and North America/Oceania would benefit most in contribution, at 48% and 31%, respectively.
While women currently generate only 37% of the world’s gross domestic product (GDP), the share of it certainly differs among each region. In India, for example, only 17% of its GDP is generated by women, while in China and Eastern Europe/Central Asia, their share is much higher, at 41%.
Domestically, much of this is nothing new. The United States has long been, unfortunately, embattled with inequality in the workforce for years now. Albeit modest improvements have been made, women remain underrepresented at every corporate level.
A separate study, titled Women in the Workplace, conducted again by McKinsey, in collaboration with Sheryl Sandberg’s LeanIn.org, recently delved into the topic and found that, among other things, “we are more than 100 years away from gender equality in the C-suite,” and that it was “disproportionately” more stressful for women pursuing that path towards leadership.
They continued: “ While CEO commitment to gender diversity is high, organizations need to make a significant and sustained investment to change company practices and culture so women can achieve their full potential.”
Tackling an issue as substantial as equality is no easy task, clearly — many have struggled with addressing the matter in the past, let alone solving it. Whether it’s ensuring the supply of education, financial services, or internet access is balanced, or reducing unpaid care work where feasible, it’s going to take a lot of effort on everyone’s end to ensure that the goal of parity is reached.
For the time being, though, let’s continue to aim for that first scenario.
