By Joyce Gannon
WWR Article Summary (tl;dr) A new study from global consulting firm McKinsey & Co. reveals closing the gender gap could pump trillions (yes with a T!) into the U.S. economy. In order to close that gap and focus on empowering women, the study suggests tackling several key issues which prevent women from achieving their full potential. The study specifically points out the low rates of women in top management jobs and a dearth of females in political positions.
Closing the gender gap in the workforce could pump $2.1 trillion annually into the U.S. economy by 2025, global consulting firm McKinsey & Co. projected in a report released last week.
To achieve that ambitious target, McKinsey said, more women would need to join the workforce and to fill more full-time positions. They also need to be employed in industries such as manufacturing and technology that produce more than the education and health care sectors where women now have more representation.
In the Pittsburgh metro area, achieving parity between men and women at work could drive $13 billion more annually in gross domestic product, while the state of Pennsylvania could realize $70 billion a year more, McKinsey said.
GDP is the monetary value of all goods and services produced annually or quarterly and is a primary indicator used to measure a country’s or region’s economic performance. The projections are “best in class scenarios” based on matching the best improvement rates in all states over the past decade.
While the study calls for increasing the number of women in the workforce, they would not replace male workers.
McKinsey’s GDP numbers could be difficult to achieve, but the potential economic impacts for advancing women “could be very, very large,” said Sevin Yeltekin, associate professor of economics at Carnegie Mellon University’s Tepper School of Business. “You can squabble about the exact figures. But we know the results are going to be positive, even if they are not as large as in the McKinsey study.”
Women make up half of the population, but generate only 36 percent of global GDP. The opportunity for them to boost the economy will be lost unless businesses, governments and nonprofits tackle key issues, said Kweilin Ellingrud, a partner in McKinsey’s Minneapolis office and the report’s lead author.
Among the barriers to women’s advancement are teen pregnancies, single motherhood, sexual violence against women, and women handling much of the care of family members.
“Those are societal gaps where no state [in the U.S.] is doing a great job,” Ms. Ellingrud said in a phone interview.
In the report, McKinsey identified those challenges, along with low rates of women in top management jobs and a dearth of females in political positions, as areas where the U.S. has “high or extremely high inequality.”
Pittsburgh, for instance, has elected only one female mayor, Sophie Masloff, and she left office in 1994.
“Looking at leadership positions … and political representation in the city and state, that’s an opportunity to move the needle significantly,” said Gunjan Khanna, leader of McKinsey’s Pittsburgh office.
Pittsburgh and Pennsylvania fall in the middle of the pack in overall gender parity among all states and metro areas, Mr. Khanna said. And compared with the top 10 cities nationwide, Pittsburgh scored slightly better than New York, Los Angeles and Chicago, but fell below Philadelphia, Miami, Dallas, Houston, Atlanta, Boston, and Washington, D.C.
Pittsburgh had high marks in labor-force participation by women (89 for every 100 men) and women in professional and technical jobs (94 for every 100 men).
In leadership and management, though, the city scored lower with only 67 women in those positions for every 100 men.
Though the city has a high number of women enrolled in higher education — 108 for every 100 males, according to the McKinsey study — they may not be choosing careers with high leadership potential because of a lack of female role models, said Leanne Meyer, director of leadership development at CMU’s Tepper school and program director for CMU’s Leadership & Negotiation Academy for Women.
Among the ways Tepper is trying to address that lack, Ms. Meyer said, is by developing a marketing campaign to show potential female students what it’s like to be a business leader. It also offers a part-time, hybrid MBA program that includes online and on-campus work, and is designed to attract women who already work full time or women who may be at home raising children.
Some companies McKinsey held up for best practices that keep more women in the pipeline include Google and Netflix, which recently increased the amount of parental paid leave provided; and Lockheed Martin, which saw a 20 percent rise in females in leadership roles after implementing a program to accelerate women into those jobs and into board positions.
“You have to set the right tone from the top and from the chief executive,” said Ms. Ellingrud. “It’s understanding what the pipeline is and where women are falling out.”
By attaching economic values to the gender gap and describing societal and cultural issues that contribute, the McKinsey study can help raise more awareness of why it’s important to address male-female parity in the workplace, said Ms. Yeltekin.
“It’s very important for people to realize these things have far reaching consequences more than just making women a little better off,” she said. “Cutting down the barriers to [gender equality] will also benefit men and others who have power.”