Unless we take active steps to address economic inequality, it may negatively impact other areas such as health and politics, creating a downward spiral once again, widening the overall gender gap.
Why do women trail so far behind men on the economic front? Currently, worldwide 55% of adult women are in the labor market, compared with 78% of men, yet women’s average annual income is around US$11,500, compared with US$21,500 for men. Women are also frequently subjected to biased discriminatory practices including the “motherhood penalty”: mothers face biases in hiring, starting salaries and perceived competence, while fathers can benefit from being a parent. Similarly, if they are entrepreneurs, bias against women can mean they struggle to access the capital they need to grow and scale their businesses.
So how can we ensure we don’t wait more than two centuries to achieve economic equality? There are actions we can take now.
Enhance the role model effect
For instance, we need more role models to fuel women’s ambitions. The World Economic Forum’s Gender Gap Report finds a positive correlation between the countries that have a high level of female political empowerment and their high numbers of women in senior roles. We need businesses to play a big role here: women need to see that that leadership is attainable and real. What’s more, they shouldn’t only be called upon to lead in times of crisis or in circumstances that make it incredibly difficult for them to succeed – the so-called “glass cliff” scenario.
Fix the digital divide
We need to attract more women to the tech sector. Technology is changing our world for the better in many ways. Nevertheless, it is having a negative influence on the economic gender gap. Women are highly represented in retail and white-collar clerical roles, which are disproportionately affected by the shift toward automation. At the same time, they are under-represented in jobs associated with emerging technologies – jobs that could enable them to develop sought-after skills, earn high salaries and potentially become senior leaders or entrepreneurs.
Analysis conducted by the World Economic Forum, in partnership with LinkedIn this year, has found that just 12% of women are employed as cloud computing professionals, with the remaining 88% of roles being filled by men. Just over one in four data and artificial intelligence professionals are female, according to the analysis. This is a serious concern given that female professionals in the technology sector are crucial to ensuring future solutions do not have any form of unintentional gender bias.
Attracting more women to the sector requires a big effort from a wide and diverse set of stakeholders. But the first step is to encourage the uptake of STEM education, regardless of age. Unfortunately, many girls and women today are deprived of the means to learn these skills because they do not complete basic secondary education.
In 2018, a report by the World Bank found that 132 million girls worldwide, aged between 6 and 17, do not attend school, with only a third of girls from low-income nations finishing lower secondary school. According to the report, adult women globally are losing out on between US$15 trillion and US$30 trillion in lifetime earnings as a result of not completing 12 full years of education.
The Gender Gap report found that educational attainment gaps between men and women were small on average, but found that in some countries investment in women’s talent was “insufficient.” It also noted that even in countries where educational attainment is relatively high, “women’s skills are not always in line with those required to succeed in the professions of the future.”
Address the skills gap by supporting education for women
The education of girls and women is the foundation for all other efforts to close the economic gender gap. Education allows women to secure well-paid jobs in technology and other desirable sectors, as well as to increase their chances of accessing finance to start their own businesses. They also need education to pursue careers where they can make a difference for other women – in politics or health, for example.
Today, the world is in the grip of a skills shortage, with the lack of technological skills being particularly acute. So, it is in the interests of governments and businesses that they collaborate to make sure that girls go to school, stay there, and study future-focused subjects. They also need to equip adult women with the skills they need to thrive in an increasingly technology-driven world.
With CEOs and executives from some of the world’s most powerful and recognizable organizations gathering in Davos in the coming weeks, the data from this year’s report should act as a stark reminder of the importance of economic gender equality. It is for this reason that I believe closing the economic gender gap is an issue for the world, not just for women – but importantly, one which should be at the top of the agenda.
When will you move long-term value from ambition to action? Join EY to discuss pressing economic and social issues as we look to the World Economic Forum Annual Meeting 2020 – from 21-24 January. Join the conversation via ey.com/wef and using #WEF20 and #BetterWorkingWorld
To help build a cohesive world with equality at its core, companies need to start addressing gender parity to reduce the economic gender gap for future generations.