The gender pay gap is still here, but how much is it actually costing us? According to a new report published by Moody’s Analytics, reducing the gender gap can boost the economythe world at 7 trillion dollars. The gender gap in the workforce, which despite the reduction remains significant, mainly in terms of underutilization of women’s skills and time, causes economic loss both at the personal level and at the macroeconomic level. The calculation is based on the wage increase that women in the OECD countries, between the ages of 25 and 64, would see if their wages were equal to their male counterparts in the same age range in 2021.
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According to the report, the 38 OECD countries, which include some of the world’s strongest economies, such as the US, UK and Japan, still see progress in equal pay for women lagging behind. The economic boost will come as more women join the workforce and productivity rises. However, according to the pace At the current rate, it will take about 132 years to close the wage gap.
A greater proportion of women holding more productive managerial and professional positions would also help. One striking example cited in the report shows that although women in OECD countries overtake men in receiving a master’s degree or its equivalent, they still remain significantly underrepresented in middle and senior management positions.
A noticeable gap among senior management
The report also indicates that women still rarely ask for a raise, and ask for less during the negotiation stage, when they are required to higher standards than their male colleagues. The gap is particularly noticeable among senior management, with only 23% of management positions worldwide held by women. While women are more likely to invest More investments in their education, they tend to reach jobs at lower levels.
The World Bank stated that “gender biases and inequality that placed women in low-wage occupations, differences in work and working hours, as well as Imposing disproportionate childcare responsibilities on women contributes to the gender wage gap.” The World Bank also noted that almost half of the world’s economies do not require equal pay by law.
Some additional interesting data were published in a report issued today (Monday) by the research department of Bank of America (BofA). For example, it was found that companies that focus on gender diversity at the level of the board of directors and senior management, consistently achieved a higher return on capital and a lower profit risk in subsequent years.
Additionally, according to BofA’s report, narrowing the gender gap helps promote diverse perspectives and ideas, which can be invaluable in navigating economic change as companies need to adapt and innovate to remain competitive. Including team members with different perspectives and ways of thinking allows for greater innovation. “In fact,” explains the report, “the ‘innovative mindset’ is six times higher in more egalitarian versus less egalitarian workplaces.”
According to the Moody’s report, narrowing the gap and promoting the global economy depend on measures such as paid paternity leave for fathers, as well as more affordable childcare. The authors suggest that the world is at a turning point when it comes to achieving gender equality, with equality becoming a priority for countries around the world.
“Closing the gender gap in the workforce and management of OECD countries has the power to increase global economic activity by about 7%, or about $7 trillion,” explained Dawn Holland, director of economic research at Moody’s Analytics and co-author of the report. It was emphasized that reducing the wage gap in emerging markets, such as India, will increase this potential even more.
“There has been progress, but it is far from a fast enough pace,” Holland explained. “There are many complex kinds of problems behind these gender gaps” such as social norms that take a long time to change, she said.