I recently joined the Council on Foreign Relations as a Term Member. Like most life-membership organizations that operate out of massive Park Avenue townhouses, the makeup of the membership is predominantly white and male. The Term Member program, I'm told is more diverse, which you can see at their events where a diversity of races and genders is represented in the room (although I have yet to meet a transgender Term Member).
Another positive development at the Council is the programming around the economic benefits of women's workforce participation. Today, I attended a panel on "The Status of Women in the Economy" and every argument for why we need more gender parity at work was presented. I'm not going to repeat all the stats in this blog. Rather, I'll point you to a report that Gayle Tzemach Lemmon and Rachel Vogelstein wrote for the Council that is packed with great data points that I summarized in a previous post.
Among the many points that stuck out today from the "The Status of Women in the Economy" panel, Thomas R. Nides, the Vice Chairman of Morgan Stanley and the former United States Deputy Secretary of State for Management and Resources (basically the COO of the State Department), had the best one. He said that at the end of the day, "it's all about the money". Hiring more women is obviously the moral thing to do, but none of that matters if companies don't understand how women's participation in the workforce improves a company's bottom line. And numerous studies have shown this, including a recent one by the IMF that shows a 5 percent rise in the GDP would result from closing the gender gap in the US (I wrote more about this study in a previous blog post here).
I'm excited about a number of forthcoming studies that frame gender parity through the prism of growth - and not just human rights. Laureina Yee, a partner at McKinsey who leads their "Women in the Workplace" partnership with LeanIn.org teased an upcoming study that will show how much profit margins rise at companies with more women leaders!
Hint: it's all about growing the GDP
As the CoFounder and President of PowerToFly (a.k.a. someone who spends her days working with companies to close the gender gap) I get asked the same question constantly: "why is it important for companies to hire more women?" The answer is simple if you look at the economic data that shows what would happen if we had the same number of men and women working in the United States.
But before we go there (this is only a three paragraph post, so scroll down if you're impatient for the answer), let's look at how the U.S. fares when it comes to the gender gap in global labor force participation. Check out the highlighted chart below that gives higher numbers than the U.S. Department of Labor (about 63% to 79%). In comparison, the Department of Labor data cited on the International Labour Organization site shows "the U.S. labor force climbed during the 1970s and 1980s, reaching 60 percent in 2000. However, in 2010 this figure has declined to 46.7 percent and is not expected to increase by 2018 (DOL 2011)." Either way, the disparity between female and male participation is pretty grim.
Ok. So why is the gap significant, and more importantly, why do we need to close it?
The answer: Reaching gender parity in the United States could boost the GDP by 5%. If you want to grow and fix the economy, one of the fastest ways to do that is to employ more women.
If you want to read more about how gender parity could benefit GDP growth - and how it has made a difference in Japan recently - then read this quick report called Building Inclusive Economies by Gayle Tzemach Lemmon and Rachel Vogelstein. The report was published by the Council on Foreign Relations in June and is full of facts that detail why it's so important to create truly inclusive workplaces that lead to gender diversity.
Here's the full quote where I got the GDP growth fact:
"Studies conducted by the IMF also find the strongest correlation between advancement in gender equality and economic growth in low-income countries. For example, while closing the gender gap in labor force participation in the United States could boost GDP by an estimated 5 percent, gains in lower-income countries such as Egypt could be as high as 34 percent."