Equal Pay Day turns 20 years old today. It's a day that's meant to highlight the fact that the average American woman has to work 15.5 months in order to earn the same amount of money that the average American man makes in 12.
Each year, politicians and civic leaders seize upon this day to emphasize just how unjust that is and preach the importance of gender parity.
But while most arguments for gender equality in the workplace hinge on basic fairness, a new McKinsey report shows achieving full gender parity in the American workplace would also give the economy as a whole a big boost—a $4.3 trillion boost, to be exact.
The report looks beyond the simple wage gap to analyze the overall workplace gender gap in America. To do that, McKinsey measured three things: labor force participation by gender, the ratio of full-time to part-time jobs by gender, and the mix of industries in which women and men work.
What it found was that in the best case scenario, if women participated in the workforce at the same rate as men, held as many full-time jobs as men, and worked in the same range of industries, the resulting increased productivity would add $4.3 trillion to the US GDP by the year 2025.
Total parity like that would be a radical shift. But the study also found that if every state just replicated what the states with the most gender parity are already doing the country would still add $2.1 trillion to the GDP by 2025. That's a 10-percent boost over the projected GDP if the country continued doing business as usual.
That's the good news. The bad news is how much is still standing in the way of such a future. As part of the study, McKinsey conducted a state-by-state assessment to gauge where each falls on the gender parity scale. The company analyzed states based on metrics like the number of women in managerial roles, the number of single mothers in the population, the amount of violence against women, and the amount of unpaid work women do in the state, among other things.
Using those metrics, they scored each state, so that a score of 1 equalled perfect gender parity. In the end, not a single state scored above .74, and most scored much lower than that.
There are still massive societal issues that either prevent women from joining the workforce or increase the likelihood that they'll work a part-time, lower-paid job. And while government leaders are quick to make a moral argument about why these issues need to be addressed, the McKinsey report attempts to appeal to federal and state law makers where, for better or worse, it matters most: their budgets. In essence, the report tells leaders: you may not be motivated to fix this problem just to make the lives of women better, so do it for the money.
The report offers recommendations, such as expanding paid parental leave, so new mothers don't have to leave the workforce, and increasing access to contraceptives to curb the teenage pregnancy rate.
Achieving gender parity would take a concerted investment from government and the private sector. Maybe a $4.3 trillion prize (and a win for gender equality) will help make clear that it's worth the effort. For everyone.
