Female Choice Dilemma

Insight

Women in richer economies have greater choice, and with it increased control and influence. This continues to drive change and decision-making but globally the battle for female equality has a long road to travel.

  • Equal opportunities are distributed unequally
  • The average annual pay for women today is the same that men were earning in 2005
  • Women have accounted for more than half the increase in self-employment

Debates about equal rights for women have been on the agenda for over a century. Despite the best efforts of the UN’s Millennium Goals, more girls than boys still don’t go to school; in Africa and South Asia boys remain 1.55 times more likely to complete secondary education than girls. Even in rich countries life isn’t equal; the average wage gap between men and women is 20%.

And yet, when girls do go to school, almost universally, they do better than boys and these days their educational dominance persists into university. In the OECD women now make up 56% of students enrolled, up from 46% in 1985 and by 2025 that may well rise to 58%. Women who go to university are more likely than their male peers to graduate, and typically get better grades. In the next ten years this, surely, will have an impact on equality.

Most governments are keen to encourage more women to work as it makes good economic sense. Some estimates suggest that global GDP would rise by between 5-20% if women’s participation in the workforce increased. McKinsey’s Global Institute research shows if gender gaps in participation, hours worked and productivity were all bridged, the world economy would be $28.4 trillion (or 26%) richer by 2025. The potential gains are proportionately greater in places where fewer women are already in paid employment. India, for instance, could be 60% richer. To date however gender parity in business is a long way off pretty much everywhere. Across the EU only one third of managers are women. In some countries, such as Luxembourg, it can be half that. Only one in 20 bosses of a Fortune 500 company is female.

Equal opportunities are distributed unequally

Equality isn’t everything, and equal opportunities are distributed unequally. The smallest gaps in participation rates are in some poor African countries, where men and women are almost equally likely to work outside the home, probably growing food. India, despite its impressive economic record, remains one of the world's most unequal societies: women make up less than a quarter of the paid workforce and account for just 17% of GDP, a measure of output that excludes unwaged work. The UN Development Programme recently ranked it the worst performing Asian country, excluding Afghanistan, for gender inequality, 132nd out of 137 countries. In other parts of South Asia, women carry out up to 90% of unpaid care work. They are far less visible than men in work outside the home. By contrast, women contribute 41% of GDP in China. Consistently across the globe the lower representation of women in paid work is in sharp contrast to their representation in unpaid work.  However this is not counted in GDP measures despite the benefits it brings.

The average annual pay for women today is the same that men were earning in 2005

In richer countries, however, opportunities for many women are on the up. Better access to education, effective contraception and, arguably, increasing divorce rates, all mean that more women choose to build a career and delay having children until their later years. As more women work, they became less accepting of discrimination. Women whose level of education is on a par with men are more likely to find well-paid jobs in technical professions, but there remains an overall imbalance in pay, earning about three-quarters as much as men. Since 2006, the number of women in the workforce has risen from 1.5bn to 1.75bn, but the average annual pay for women today is the same that men were earning in 2005.

This, in part, is due to the type of career path women choose and the choices they make. The challenge for an ambitious corporate executive is that the key time to show your metal by working long hours and being constantly on call are in the first 15 years of working life, which is about the same period in which many women would like to start a family. [1]  Simple biology dictates that this needs time and so women have to make decisions between family life and careers.  Given this and the current way that work is structured, it is hardly surprising that men find it easier forge ahead and progress professionally.  So, although men and women may start work on relatively similar salaries, family responsibilities often take priority for women and therefore decrease their earnings relative to those of men as they age. In some countries the cost of child care makes going back to work financially challenging so the primary carer, generally female, either cancels or postpones their return.  Anyone, who chooses to put their career on hold to have a family and still do the bulk of the baby minding, will find it hard to catch up.

The great need is for increased flexibility but a flexible schedule often comes at a high price because for many corporates hours of work are worth more when available at particular moments and when the hours are more continuous.  Given this, some argue that the gender gap in pay would be considerably reduced if firms could consider a different approach to working and did not, for example, have an incentive to disproportionately reward individuals who work long and particular hours. There will of course always be jobs where flexibility is not an option those of CEOs, trial lawyers and surgeons for example but for many others pay does not need to depend on being available all hours—and well-educated men who want a life outside work would benefit from change, too. 
 
Often women get fed up waiting to be accommodated by their employers and decide to go it alone. This in part may explain why nearly 30% of all US businesses are majority female-owned and that in the UK women have accounted for more than half the increase in self-employment since the 2008 recession. In emerging economies, innovations such as mobile phones, microcredit and even the humble scooter (over 60% of which are bought by women in India), have freed up female entrepreneurs. There are further promising ideas to reduce the daily grind: foot-pedalled water pumps, the “micro-franchising” of heating and lighting provision in rural areas not served by the electric grid, and the “crowdsourcing” of work to local communities.
 

The traditional relationship between men and women is also changing. Marriage, for example, used to be near-universal and unequal, but in recent decades it has become a deliberate option and more equal. Educated women have been able to form strong relationships with similarly minded men, in which both parents earn and both do some childcare. Many agree that for women to be truly equal in the work place men will need to be equal in the home and this is gradually happening. To encourage this, women who in the past have focused on redefining femininity might themselves have to change their perception of masculinity. Rather than embrace the image of male success as a high-flying, high-earning superhero they should consider a man who can care for children and be content to earn less than his partner.

Gender equality is still a frequent topic of conversation at high profile events in high-profile places such as Davos or Brussels or at the UN; often these conversations even include men. Politicians and executives will continue to debate how future skill requirements will affect change, ask whether women should take more leadership roles in science and technology and determine what can be done to end gender biases. Every conversation will raise awareness and sometimes the debate, and therefore the opportunities for women will progress; inch by inch. 

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