Mandatory Parental Leave Can Pare Gender Gap

Mandatory Parental Leave Can Pare Gender Gap

Bloomberg Brief: Sustainable Finance

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Distance From Gender Parity (2015)

(In)Equality in the G7

Wednesday, November 25, 2015 - 12:20pm

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The World Economic Forum (best known for organising the annual Davos shindig) just published its annual Gender Gap report. It makes for thoroughly depressing reading. On current trends, it will take 118 years before women's salaries equal those of men; women currently earn what men took home a decade ago.  

So here's a modest proposal to accelerate progress. Talk to any executive at any large organisation about gender equality and at some point they'll give the same reason/make the same excuse (take your pick) for the disparities between how men and women are treated in the workplace: pregnancy. So maybe it's time to impose mandatory male parental leave to destigmatise pregnancy breaks to help crack the glass ceiling.

The WEF study measures national gender gaps on economic criteria (workforce participation, remuneration and opportunity), political empowerment (ratio of men to women in senior government positions), education (literacy rates and schooling levels), and health and survival (life expectancy and sex ratios at birth). It's designed to be independent of how developed a country is.

The top five countries by ranking are Iceland (No. 1 for a seventh consecutive year), Norway, Finland, Sweden and Ireland. The U.S. dropped eight places to 28th, as the percentage of women holding government ministerial positions declined to 26 percent from 32 percent. As the first chart shows, even the most progressive regions still have a lot of work to do to close the gap between women and men.

Greater equality isn't just about fairness; as the report says, enlightened self-interest suggests countries should want women to be participating more fully in society.

The report states: "The most important determinant of a country's competitiveness is its human talent — the skills and productivity of its workforce. Similarly, an organisation's performance is determined by the human capital that it possesses and its ability to use this resource efficiently. Ensuring the healthy development and appropriate use of half of the world's available talent pool thus has a vast bearing on how competitive a country may become or how efficient a company may be. There is clearly also a values-based case for gender equality: women are one-half of the world's population and deserve equal access to health, education, economic participation and earning potential, and political decision-making power. Gender equality is thus fundamental to whether and how societies thrive."

Inequality hurts growth. Take Japan, for example, where Prime Minister Shinzo Abe professes to have adopted the "womenomics" doctrine coined by Goldman Sachs economist Kathy Matsui as long ago as 1999. In April 2014, Japan's labour ministry offered an inducement worth £1,608 (300,000 yen) to small- and medium-sized companies that promoted women. As of Sept. 30, not a single payment had been applied for.

As the second chart shows, Japan's low ranking on the global equality charts echoes the low rate of female participation in the workplace:  It's a biological fact that men don't get pregnant, leaving women shouldering the responsibility of propagating the species —  and suffering the negative workplace consequences of an obligatory career break. Forcing fathers to leave their desks for a month or two (or even, as is available in Sweden, a full quarter of the year) would go a long way towards removing parenthood as an excuse for treating women as second-class employees. Sure, there'd be an upfront cost. But the long-term benefits of reducing inequality would make it a price worth paying.