Gender Equality Has Never Been More Important for the Economy

Text size About the authors: Joseph Quinlan is the chief market strategist for Merrill and Private Bank, Bank of America . Lauren Sanfilippo is a senior investment strategist at Bank of America. One hundred thirty two years is a long time -- particularly for women. That is how long it will take to close the global gender gap at current rates of progress according to the latest estimates from the World Economic Forum. Put another way, there's greater odds of colonizing the moon or landing a human on Mars before women reach full gender parity with men. A lot can happen between now and 2155, and a lot -- for the better -- has happened to women over the past few decades. Around the world, women are generally better educated, better paid, and in better health. More young girls are in school today than ever before. More university degrees are being conferred on women than men, boosting incomes. And more women can be found among the senior ranks of business and politics. In the U.S., the percentage of prime-age women (25-54) in the labor force is not only back to prepandemic levels owing to more part-time work, remote options and less pandemic-related disruptions. But the prime-age female labor force participation rate of 77% in January 2023 was among the highest on record. What's more, young women (under the age of 30) in a number of U.S. cities now earn as much or more than their male counterparts, according to the Pew Research Center. The number of female CEOs running Fortune 500 companies has never been higher: 53 at the start of this year. Yet despite these positive trends, glaring gender gaps remain. If closing these gaps takes until eternity, then not just women but entire countries and societies will pay a heavy toll. Gender pay is still unequitable. In general, U.S. women earn an estimated 82 cents for every dollar men earn. Regardless of occupation, full-time or part-time work, level of education, years of experience -- whatever the metric, women's earnings continue to lag those of men. And they have for quite some time -- the gender wage gap has barely budged or improved in over a decade. This disparity robs women of income today and steals from them in the future. Inequitable pay means women have less money to stash in their retirement accounts, less means to put a down payment on a home, less social security benefits, and less cash for a rainy-day fund. As noted by the Congressional Research Service, the earnings gap is one reason why women experience higher rates of poverty in old age than men. Meanwhile, the so-called second shift, unpaid family care-giving duties , falls disproportionately to women. While the amounts vary by country, females spend up to two to ten times more time on unpaid work than men at a considerable cost. If women were paid for their unpaid work, it would total nearly $11 trillion, according to Oxfam America. That's a staggering level of uncounted output. But what's more, time spent on unpaid work is time lost to other job-related activities or activities that boost women's self-worth (education) and well-being (physical activity). The second shift is a significant inhibitor to gender equality. So too is the lack of paid family leave in the U.S., the only high-income nation classified by the World Bank as not having a national paid family leave program. While several states have implemented such policies, and some employers voluntarily offer paid family leave, U.S. paid leave policies remain far from universal and equitable. Paid leave is concentrated among high-wage workers. Part-time workers have fewer options for paid leave than full-time workers. At best, family leave policies in the U.S. are a patch-work system riddled with holes that miserably fail to address the fact that motherhood is a critical point in a woman's career. For females, it's one of life's most crucial and defining intersections, leaving many women -- unbeknown to their employer -- full of self-doubt, and physically and mentally exhausted. Little wonder then that having children is one of the biggest reasons why women permanently opt out of the workforce. Not wanting to lose a valuable resource, however, forward-looking firms are adjusting by encouraging more flexible hours for moms (and dads), embracing hybrid work models, and leveraging remote work technologies that proved successful during the pandemic. U.S. firms, in other words, are sharpening their gender lens. They have no choice. Not with the U.S. labor market basically at full employment, not with immigration flows staunched by more restrictive policies, and not with the global labor market in a secular decline, upping the global war for talent. The U.S. government is also in a bind. The success of Washington's "Buy America" industrial policies (think Inflation Reduction Act, the Chips Act and Infrastructure and Jobs Act) could very well rest on the willingness and ability of women to participate, since the surge in fiscal spending has already created severe labor shortages of electricians, engineers, solar installers, truck drivers, and related jobs that require the 21st century equivalent of Rosie the Riveters. Help wanted: more Rosie's. In the end, it's past time to close the gender gaps in the U.S and around the world. Confronting one of the tightest labor markets in decades, and now in the throes of a great power competition with China, U.S. gender equality has never been more important for women, the economy, and America's global competitiveness. There is no time to lose -- certainly not 132 years. Guest commentaries like this one are written by authors outside the Barron's and MarketWatch newsroom. They reflect the perspective and opinions of the authors. Submit commentary proposals and other feedback to ideas@barrons.com.