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Unlocking global wealth through gender parity
GENDER gaps exist in virtually every country. Across the world, women are paid less than men, receive fewer employment opportunities, and face greater obstacles on their way up the career ladder. Although progress is deeply disparate, not one nation today has achieved absolute wage and employment parity between men and women.
According to a World Economic Forum report, women experience only 59 per cent of the economic opportunities and participation rates that their male counterparts enjoy globally. Only 50 per cent of women have jobs (and even fewer have full-time work) - far below the 75 per cent employment rate of men - and they earn on average 24 per cent less than men do. Beyond jobs, legal protections for women are also still generally underdeveloped in many regions, with women in some countries having little access to land, financial services and/or inheritance.
Notwithstanding the ethical implications, the discriminating nature of societies has significant tangible ramifications: the universal prevalence of gender disparity in labour markets is costing the global economy billions of dollars in lost activity on a yearly basis.
According to a McKinsey report, achieving equal labour participation rates between the genders could boost global gross domestic product (GDP) by US$12 trillion within a decade - that's an 11 per cent increase from current GDP levels. And unlocking this wealth requires neither drilling nor innovation, but the courage to succeed and some sisterly love.
The three tethers holding women back
Many factors have disadvantaged women from achieving their occupational potential, but three stand out as the most universally crippling: the lack of educational opportunities, domestic responsibilities, and the glass ceiling.
Women are broadly under-represented in several noteworthy fields, such as science, engineering, manufacturing, construction, IT and information.
The root of this discrepancy is education, which is, of course, a vital link for careers in these sectors; hiring managers and recruiters often look first at a candidate's educational pedigree to determine suitability. Yet, women earn far fewer advanced degrees than men do, especially in science-related fields - women account for 30 per cent of all researchers and 33 per cent of IT workers - as their education paths typically lead towards lower-paying sectors like education and social work.
The second, and perhaps the greatest, obstacle women face is their traditional role as caretakers. Despite positive developments in women entering the job market in most countries, they continue to bear the brunt of their household's domestic burden.
As a result, women are often cast into the informal economy of part-time or temporary work, which results in lower wages, poor job security and stagnant career mobility - about 80 per cent of all part-time workers across the OECD (Organisation for Economic Cooperation and Development) nations are women.
And, tellingly, the different employment rates by country are often linked to the prevalence of family-friendly labour policies; Nordic countries, for example, have the most progressive gender policies and the lowest gender gaps.
The third factor is the ubiquitous glass ceiling, an intangible barrier that prevents women from rising to higher-level positions.
Among companies listed in MSCI's World Index, women hold 18.1 per cent of directorships; this number falls to 8.4 per cent for companies in MSCI's Emerging Markets Index.
Women are being left out of the corporate hierarchy, and this ultimately stunts their wage growth and affects hiring practices and, interestingly, business performance - according to a UBS study, companies where women held at least 20 per cent of leadership positions were more profitable across various metrics relative to less gender diverse peers.
Resolving a global problem with a global solution
This is a global issue, and it will take global solutions to address the challenges that are hindering the advancement of women's rights worldwide. The United Nations, for example, has dedicated the fifth of its Sustainable Development Goals (SDG) for 2030 to achieving gender equality and female empowerment. There are nine tenets of SDG 5, which are best exemplified by the first: "End all forms of discrimination against all women and girls everywhere."
Like all causes, achieving gender equality requires funding - and considering the ubiquitous nature of the objective, a lot of money is needed to realise the nine targets by 2030. Despite this, SDG 5 had received only 2.6 per cent of total funding towards SDG-related causes from 2000 to 2013.
At the current pace of progress, the WEF believes it could take another 83 years to close basic global gender gaps. In particular, it will be many decades before women participate in the labour force to the same extent as men, receive equal pay and hold as much political power.
Funding for UN initiatives has typically relied on government grants, not private wealth. Harnessing the wealth of individuals to compensate for this shortfall in funding could catalyse vital momentum for achieving SDG 5-related goals. Rather than wait for politicians to act, we as investors and individuals can start making a difference one act of goodwill at a time.
People can support working women through three key areas: policy initiatives, giving to charity and education, and business and investing.
Governments are the first point of change, and private individuals can either support their initiatives or encourage change by pledging campaign donations or implementing relevant calls to action within their organisations. Galvanising a populace to support this cause would have the greatest effect on transforming long-held social and political norms.
Philanthropy is an obvious solution, but it is important to allocate funds to the more pressing areas like those that alleviate domestic work (including childcare) and support maternity leave and STEM (science, technology, engineering and mathematics) education.
These issues have the widest professional as well as personal impact for women worldwide.
Other critical areas that need support relate to promoting female leadership and access to financial services, land rights and inheritance.
Finally, business leaders can enact positive change by promoting diversity and implementing gender-friendly policies like supportive maternity packages.
Shareholders also have a role to play by encouraging boards to become more progressive in their corporate culture. Moreover, businesses can offer more female-oriented products and services.
By working together and focusing our efforts, we can make a big difference in essential areas across the world to advance women's rights and, in tandem, lift the global economy to new heights.
- The writer is head, Chief Investment Office, APAC, UBS Wealth Management.