Where is America on Women’s Empowerment?

America’s laggard position on maternity leave is appropriate fodder for late night comedy, but there are other ways, such as affirmative action policies, in which the US has led the world on women’s empowerment.

These days, a pat answer is used to explain women’s disadvantaged status in the US:   “Only two countries are left in the world that don’t provide paid maternity leave, Papua New Guinea and the United States.”  You can hear this quip from politicians and comics alike. The audience always groans with recognition and laughs.

But Americans don’t seem to know much else about how they measure up to other nations on women’s rights. Indeed, they often seem to assume they are the only country with a problem.  Or they mistakenly believe that there is no problem at all.

After the speech I gave at the UN last spring, which was loaded with graphs about women in various regions, a surprising number of people said to me, “Do you have data like that for the United States?”

No other country takes its own temperature as often as America does. You can find out who among Uncle Sam’s children folds, rolls, or crumples their toilet paper, if you really want to know. These folks measure everything. So, yes, of course there’s data and lots of it.  Soon after, when I was invited to give a talk to a group of aspirant female MBAs in New York, I decided to speak about where the US stands in the global landscape.

I began by sketching the broad strokes of a picture that is now well accepted among global data wonks, but is often news to the ordinary citizen:

We have nation-level data about the status of women that we did not have, say, ten or fifteen years ago.  Those data show quite clearly that every country in the world has a gender problem, including the United States and Papua New Guinea, but also Western Europe and the former Communist countries.

Women, as a class, are disadvantaged in every economic domain in every nation, whether you are looking at the informal versus the formal employment or at business ownership or access to capital.

Economic development is positively correlated with gender equality to a striking degree. Analysis also shows that gender inequality is correlated with the worst forms of suffering: early death, disease, conflict, human trafficking.

It is now commonly accepted, among those engaged with economic development worldwide, that including women equally in a nation’s economy contributes massively to prosperity, by both increasing growth and reducing costly suffering.

None of this is particularly controversial.  Denying these findings is like saying climate change doesn’t exist:  you have to ignore heaps of data, as well as the opinions of experts.

Female subordination seems to be rooted in centuries of exclusion from the money system as a whole. To fully grasp the situation, one must look beyond a single dimension (such as unequal pay) to all the systemic constraints that, when they come together, cause women to be economically excluded. It is important to recognize the historical pattern, stretching back thousands of years, in which women consistently have been barred from controlling wealth. Women’s exclusion is not a local phenomenon. During the long stretch of time since the invention of money, the occasional exception only proves the rule: whether you are looking at Hindus or Visigoths, women have been forbidden to inherit wealth, own property, sign contracts, get credit, have bank accounts, and even work for pay.

American women began their quest for equality earlier than their sisters in many other countries and have had more success in some ways.  But many rights my US compatriots now take for granted were only recently won and their disadvantaged circumstances still bear the clear imprint of past exclusions very similar to those now facing women in less developed countries.

You can see right away that there is a strong relationship between “Women’s Economic Opportunity,” a composite score created by the Economist, and National Competitiveness, a score calculated by the World Economic Forum. Many items we do not normally think of as “economic opportunity,” such as reproductive rights and protections against violence, are included in The Economist’s index. I will try to illustrate why some of these issues are a matter of economics in this post.

Consider, for instance, that women bear a disproportionate burden of unpaid work in every country. The expectation that they will put in long hours and never ask for remuneration is the first, and most basic, exclusion.  This requirement also rather conveniently makes it hard for them to hold down a paying job. That fact is just as true in San Francisco as in sub-Saharan Africa. Indeed, as OECD’s 2012 survey of the economic status of women made very clear, the lower earnings among women worldwide, both in employment and entrepreneurship, are largely attributable to the unpaid care burden they usually bear. Precisely because it is unmonetized, care work is generally not considered to be “real work” at all, even though estimates of its value are as high as 30% of GDP across OECD countries. Indeed, the whole body of economic thought tends to treat women’s work in the home as “unproductive,” as Nancy Folbre’s brilliant book, Greed, Lust, and Gender thoroughly documents.

In some cultures, women are not allowed to work for pay or, if they do, they must surrender their earnings to a husband or father, who has legal rights over any income they might generate and who often controls their every movement.  Practices like purdah effectively bar women from working outside the home.  Unsafe public spaces similarly work to constrain mobility and, therefore, earning power. All the constraints on earning, especially when coupled with an “obligation” to long hours of unpaid work, tends to keep women from having much money which, in turn, makes them dependent upon men.

The horizontal black bar marks equality with men. In the US, as in Europe, women are enrolled in tertiary education at much higher levels than men. And, they are more likely to occupy the professional and technical jobs that require advanced skills. But they are a smaller percentage of the overall workforce. And they have even fewer numbers in leadership posts, whether in the public or private sector. What we are seeing here is a waste of the real money that US society puts into educating women–yet one more way in which gender inequality hurts America as a country. Note, however, the pattern in the Middle East. While the percentage of women in tertiary education is higher and the translation into employment and leadership shows a steeper decline, the overall pattern of wasted resources and lost opportunities is the same. I figure this information discredits two American myths.  First, there is the one that says Muslims are fundamentally different when it comes to women.  Then, there is the one that says all you need is educational opportunity and fairness will do the rest.

Cloistering women was commonplace in America in earlier centuries, though it is not now. Women won the right to control their own earnings in the latter part of the 19th century. But unsafe commutes are still the order of the day in the US—and still act to discourage females from activities that would improve their earnings or advancement prospects like, for instance, working late or socializing with clients or colleagues. (Exclusion from networks is consistently cited as a reason for both women’s lower pay and their lesser success as entrepreneurs.) Until the 1970s, jobs were gender-segrated in America:  even the want ads in the newspapers classified jobs for women or men. The better jobs—that is, the jobs that required education, paid well, and had advancement or supervisory prospects—were unabashedly set aside for men.  Putting an end to this exclusionary practice was a major victory for the American women’s movement in the Second Wave.

However, even though women can now hold the same jobs as men, they are still paid less for the same work and they still advance less often. A large sample study conducted by the American Association of University Women found that recent female graduates were paid 18% less than their male counterparts, even when controlling for the major topic of study.  What’s behind this gap is a belief that women’s pay needs to be discounted for the expectation that females will have children and many will eventually drop out of the labor force.  This position is invoked even though (1) most women coming out of college are single and childless, (2) most mothers of young children work, and (3) many statistics now show that young American men, as well as young women, want more family-friendly arrangements at work, including paternity leave.  The female grads are paid less because they possess the biological potential to procreate, regardless of their actual intentions or individual fertility.  Thus, the women do not get the chance to make choices; they are automatically dumped into the procreation bin.  Then, since the US workplace makes it so difficult for mothers to work, the entire system circles around to force those who do have children to sacrifice careers and, thus, justifies the unequal pay enforced at the outset.

The black columns represent the percentage of entry level management jobs given to women by the 100 top employers in each country. The magenta bars are the percentage of women in the total company workforce. In the back, the peach-colored bars are the percentage of women in the national workforce. Importantly, the women in all these countries are significantly better educated than the men. Notice that the US has quite a bit better record than any of the other countries, all of which offer paid maternity leave.

Here is where the argument about maternity leave comes in.  Many Americans assume that women advance more often and are paid more equally in countries providing paid maternity leave.  It is not true.  There is some reason to believe, as I have documented in blogs here as well as for the World Economic Forum, that the requirement to pay maternity leave may have hurt women in those countries—and that the continuing belief that women belong at home (minding babies and obeying their husbands) is actually the more meaningful barrier. Indeed, OECD has presented data showing that the best predictor of women’s economic equality in any country is whether the citizens believe jobs belong to men first and women second.

You can click on this, and any of the other graphs, to make it bigger. Right off, though, you can see that the black and red bars, which represent patriarchal corporate culture and national gender norms respectively, were the main barriers to women’s advancement. The US is third from the right, with one of the worst corporate cultures on the graph (France, which offers extremely generous maternity leave, is worst).

The belief that men somehow deserve jobs more than women, as well as the opinion that women should go home and do the obedient wife routine, are both part of a complex of traditional gender attitudes that still hold sway, even in the “advanced” countries.  When the World Economic Forum asked human resource managers at the top 100 employers in 30 countries what the main remaining barriers to women’s advancement were, the top two mentions were consistently (1) “masculine, patriarchal corporate culture” and (2) gender norms in that country. Maternity leave was near the bottom of the list.

With regard to equality of compensation, the US record is very similar to the rest of the world. Because we have more American data , however, we know that the US gender gap affects every kind of job, even where the comparison is an exact match, and thus cannot be explained by the usual excuses brought by apologists.

This graph summarizes the World Economic Forum’s measure of the equal pay problem. The black bar at the top is equality with men, so you can see that the US, along with many “advanced” countries. is way below par. There are many ways to measure the pay gap. These particular numbers reflect what leading employers said when asked how much women are paid for similar work done by men. Many will dismiss this data for being “subjective.” But how would you feel to learn your boss openly told a data person from an outside agency that he pays 60 cents on the dollar for women doing the same job as men? The usual excuses don’t really explain that one.

Most people are surprised to learn that the pay gap is actually wider at the top salary levels, where women are most likely to think they have somehow escaped the reach of discrimination.  And, again because there is more research done in the US, we also know that a key reason women are paid less in those jobs is the gender bias that occurs in negotiations.  It is true that women generally do not negotiate for higher salaries.  But there is a good reason:  they recognize the potential for punishment by co-workers or employers.  And, in fact, research shows that the person on the other side of the negotiating table will be deeply offended if the woman tries argue for herself and the outcome is a complete change in the way they evaluate her.  People simply don’t think women should want money—even in 21st century America!

As the Council of Economic Advisors notes, employers also often feel justified in deceiving women about the parameters in pay negotiations (on the grounds that women are not competent enough to understand, anyway), which also results in unequal salaries.  These practices are perpetuated by a general insistence, both formal and informal, on secrecy about compensation arrangements.  The US government is now encouraging companies to allow employees to talk about pay.  I remember that, back in the day, one of Gloria Steinem’s recommended everyday acts of rebellion was to go to work and tell everybody your salary. She was right.

Yes, you are reading it right. The most successful women, the women at the very top, are the ones who suffer the most pay discrimination. Yet how many times have you heard one of these paragons stand up at an “inspirational” luncheon and insist she has never experienced sex discrimination? Or, worse,”I never thought of myself as a woman, I just did a good job.”

The opening shot for young women is an unequal starting job, but that is only the beginning.  The Council of Economic Advisors notes that the gender gap in pay widens over the course of a career.  The main explanatory variable is motherhood. (BTW, we need to learn to point out the difference between an “explanation,” as in “an explanatory variable” and a “justification,” as in “a decent reason.”  “She had children” is not a decent reason, but it does explain much of why women make less.) However, there are other important components.  One is that women simply don’t make it into the jobs that pay more money.  They do not progress through their careers as successfully as men do in any country. The stair step pattern shown by data suggests that women are squeezed out at every level, even after the childbearing years are over.  Yet, in our discussions of reform we keep circling back to maternity leave, which would account only for the first stage of the drop off. There is something far more insidious going on than a little time off for babies.

The knee-jerk excuse for why the presence of women dwindles away as you go up the corporate ladder is that they become mothers. In truth, the pattern suggests that something persistently pushes them out over the course of their careers and is actually more pronounced in their later years. Note the national pattern: the US and UK start out with more women, but lose them quickly, ending with fewer females at the top. The other countries take in fewer women, but hold on to more of them over the life course, such that the middle level is approximate to that in the US and the UK.  But none bring the women who have survived this gauntlet to the C-Suite. The big exception here is Norway, which at the time these data were collected was the only country here to require a quota of women on corporate boards. Many other European countries have since followed suit. Why? Because the quotas work and nothing else did.

Throughout the Western nations, as a result of this general condition of unequal pay and advancement, women have smaller pensions and less job security—and thus are more likely to become poor and dependent on social programs.  Even in wealthy households, the women seldom have control over family assets. So, as a global class, women are structurally and chronically poor. And, while there are rich women in every country, these few do not wipe out the reality for the gender as a whole.

So, even if a woman decides she can no longer handle the prejudices and constraints she confronts in formal employment and chooses to start her own business instead, other traditional restrictions slap into place to act as fresh barriers. As I mentioned in my speech, American women start up businesses more frequently than men, often in a desire to escape the anti-female prejudices and antifamily practices of an employer.  But the legacy of exclusion from other aspects of the money system then close in to make it harder for them to succeed in business.

Many women just get fed up with the way they are treated by employers. They decide to leave and start their own businesses. Unfortunately, that tactic just propels them into another aspect of the exclusion system.

The rights to own, inherit, and manage property are extremely important because they pave the path to economic autonomy outside waged or salaried work.  Further, rights to participate in the services offered by the financial system are essential to starting and building a business. Historically, women have been forbidden to have their own bank accounts or credit and they could not inherit wealth.  Usually, they could not enter into financial contracts.  All this is still true in much of the world today, but it has been within my adult lifetime that such things were true in the US.

Here is where we see further that economic functions we tend to treat as unrelated are integrally connected in the system that excludes women.  For instance, the consistent pattern in world history has been inheritance laws that ensure land passed only from male to male (think:  Pride and Prejudice, Downton Abbey).  As a result, fewer women than men worldwide have title to land.  Because of the link between owned assets and access to capital, women-owned businesses have considerably more difficulty growing than do men’s.  In some cases, the link is pretty direct.   For instance, banks in several African countries won’t lend money without title to land to pledge as collateral.  The legacy of inheritance exclusion means few women have title to land.  Thus, the restrictions in one domain (inheritance) work to reproduce inhibitors on women in another part of the economy (access to business credit) and thus drags on performance (entrepreneurial success).

American women gained the right to inherit and control wealth as part of the very first organised women’s initiatives, beginning in the early 1800s and proceeding very slowly, state by state, during the rest of that century. Today, women have more rights and the banks have more flexibility in the US than, for instance, in Africa, but the outcome is not much better.  In the US, women own about a third of all small businesses and start new ones at a faster rate than men, but they get less than 5% of conventional small business loans.  IFC and Goldman Sachs have documented a global gender credit gap of nearly $300 billion for women-owned SMEs. The US sits squarely in line with the rest of the world in denying women entrepreneurs the capital to grow income-producing businesses.

It’s hard not to laugh when “industry choice” is given as an “objective” reason for lending to men rather than women. These industry lists are as obviously gender stereotyped as the aisles at Toys-R-Us.

I noted, in my speech, that the “objective” reason the finance sector gives for not supporting women-owned businesses is that females pick the wrong industries.  Women start companies in industries that are less capital-intensive and grow more slowly. The implication is that women are just too stupid to make better choices and therefore deserve this decision against them.

But when you look at the list of what industries are “good” and which are “bad,” it’s painfully obvious that “good” industries are male-dominated.  Indeed, these  industries are notoriously hostile to women, even as employees.  And, since growth is largely a function of access to capital, it would impossible to say whether those industries a grow more by virtue of the fact that they do get more capital—and equally impossible to say whether they get more capital simply because they are male-dominated.

Quick!  Chicken or egg:  why are the female-dominated industries less capital intensive?

In example after example, each part of the system undergirds and propels forward every other part, creating a complete enclosure around females, inexorably leading to the phenomenon of female dependency that we now understand as the root of many economic and social evils.

When women can own nothing and earn nothing, each female becomes utterly dependent on a male for survival.  In developing nations today (and in the recent past of the developed countries), this has meant that when she reaches adulthood, a girl must marry in order to eat. Since she cannot earn, however, she is often seen as an economic burden by her husband, fit only for sex, childbirth, and housework.  She becomes very vulnerable to violence at home because she cannot leave.  If she ever actually tries to escape, anyone who sees her will return her to her keeper and she will likely be beaten or worse. He has total power over her. She is utterly without choices.

So many of the constraints we see on women at work, even in the so-called “advanced nations,” seem aimed to enforce and perpetuate female dependency. When an employer refuses to accommodate motherhood, they are essentially saying women should quit work and become dependent if they want to have children. How different, really, is this from the poor girl in Africa who must produce children and depend on her husband to avoid starvation? Are either of these situations something you could rightly call “free choice”?

This complete dominance of males over females in the home, in many instances a situation indistinguishable from slavery, is often seen as necessary to the family and presented as a positive cultural choice.  (Of course, you have to wonder why such vicious control is necessary if this setup is, in fact, any kind of a choice.) But what the new data has taught us is that total female dependence is very bad for families, especially for children. Consider that, among the global poor, girls are married very young, often soon after their first period.  They normally don’t get to choose who they marry.  There will be little or no access to contraception. And the wife does not get to say “no.” So marriage turns into a forced march to excessive fertility. Adolescent pregnancy is a high-risk phenomenon. Both infant and mother are more likely to die in childbirth or soon after.  Young women in these circumstances often cannot seek antenatal care and are not fed enough to produce healthy offspring (the precursor to paying women less is feeding them less). The uncontrolled increase in children only produces more pressure on scarce resources, adding to tensions. This whole situation is engineered to produce and reproduce poverty, as well as conflict. The subordination of women has so many negative outcomes that they radiate out endlessly.  It is impossible for me to write up all the damages in a single blog.

Since about 2007, when a UNICEF State of the World’s Children report endorsed women’s economic empowerment as the best way to help children, economic development experts have focused on the fact that if women have money and control over spending, they will consistently invest in the health, nutrition, and education of their children—and then they will begin working on their communities.  In sum, breaking the cycle of female dependency actually helps families to thrive and lifts whole communities out of despair.

“Women’s empowerment” is what they call the global movement to help women in developing countries achieve economic autonomy. My point here is that American women could use some of that “women’s empowerment” for themselves.

As a consequence of this learning, a huge initiative has arisen among governments, NGOs, international agencies, and foundations behind programs and reforms that will empower women economically. There are, right at this moment, teams of people in even the most remote corners of the earth, trying to help women learn to start businesses, to manage money, to save cash safely, and so on.  There are advocacy groups trying to get inheritance practices changed and others re-educating banks to include women. It is a quiet, but truly radical, revolution. The US, through its international aid and through many organisations that are rooted within its borders (including both charities and corporations), is one of the countries leading the push. And, as an American, I am proud of my country’s role in this historic effort.

Yet the situation at home still bears the marks of female dependency. The apparent acceptability of the idea that working women who have chosen to have children should be pressured until they give up and go home, becoming forever dependent on their husbands, thus putting their own economic security (and that of their children) at risk, is unworthy of the 21st century. We have the technology to work flexibly and from anywhere, yet studies show that women, when they take advantage of such arrangements, are valued less than those visible in the office.  It is a 19th century attitude that insists people aren’t working unless their bums are on the chair where you can see them.  And it is a 19th century attitude that women should not be at work, but at home caring for their children and dependent on their husbands for everything.

Like the young wife in Africa who must choose between runaway fertility and her own destitution, the young wife in America is faced with an impossible choice between children and economic autonomy. Both conditions drag us back to female dependency and both are dangerous. In Africa, policies and practices that perpetuate female dependency lead to fertility that is too high, resulting in poverty and conflict.  In the West, policies and practices that perpetuate female dependency are leading to fertility that is too low, producing what last week’s Economist called “the baby strike.” (Interestingly, the Economist reports that the only measure that seems to actually work to both keep women working and shore up birth rates is affordable child care.  Oh, really?)

There are a handful of nations left with a population growth problem, all of them in poor, conflict-ridden countries. The problem arising is a fertility decline in “advanced” nations that is so steep and so entrenched that it will threaten the economic security of these societies. America is currently just below “replacement rate,” which is 2.1 and marked by the black bar here. However, internal trends show that the US, too, will likely start to shrink. From there, it is all, literally, downhill. An economy that can’t reproduce itself is hell waiting to happen.

The advanced countries, including America, are on a steep fertility decline that will, within a decade, begin to affect everything from labor supply to tax receipts to social programs to consumer demand.  When we hear someone saying it is ok to pay women less because they have children, we all need to learn to hear it as a horribly antisocial statement.

Young couples, in the US and other “advanced” nations, need two incomes to create the kind of home that cultivates educated children.  As the Economist points out, the cost of raising children, which amounts to as much as 30% of household income per child, is borne by parents, even though national economies cannot survive without an adequate stream of skilled human capital.  It’s a huge burden, in terms of both money and time.  We should see these young parents as doing something altruistic for all of us.  Yet, instead of evolving to meet the new global needs, workplace expectations have actually increased the pressures that make it hard for a woman to have a family and hold down a job. The expectations have ratcheted up, almost as if in response to the rising numbers of qualified females wanting to have careers. I do not think it is a coincidence.

We really should not be surprised, though I admit that I was, to find the White House bringing in businesses and business schools to confer on how to engage, retain, support, and promote women in business.  In a summit called on August 5, this is exactly what happened.  The meeting brief makes a very strong case for (1) why employers need to treat women more fairly, especially with regard to childcare, (2) why the business schools need to get serious about becoming women-friendly, and (3) why it is important to the future of the American economy that the situation improve dramatically.

To exclude half the adult population from an economy, especially when it is the best educated half, is a bad idea. You not only lose their skills, but their dreams and ideas. To say you are doing it for the sake of families is simply unacceptable. This blind, systemic exclusion is good for no one.

The White House was at pains to point out something the international coterie of development data geeks already knows:  the economic growth of the United States since 1970, as well as the increase in family income during the same period, is largely attributable to women entering the economy. Research cited in the brief also shows that the presence of women increases productivity, improves decision-making, and heightens performance.  The brief makes many points about the disadvantages for women in the US, as well as how damaging it could be for America’s future if business cannot learn to be more inclusive.

But it is clear that the whole point of this meeting and this brief was to underscore that women are needed in MBA programs.  Women have long since equalled or surpassed men in their representation at every level of American higher education except the MBA.  Several reasons for this were outlined and the B-Schools present have committed to trying to resolve the issues that keep women out.  But the message was quite clear:  women are a valuable resource and they are needed in business, especially in the leadership. And so America, writ large, needs business and business schools to step up and behave like citizens.

So here I was, speaking to a large group of the very women who could make the future different.  These young ladies were Americans, but from my perch at Oxford I know that the same leadership need, as well as the same source of talent, exists in many other countries. Failure to pull these women through will cost us all dearly.

I didn’t want to leave them shell-shocked. I mean, it was a recruiting event, after all. Not good to end on a downer. And, anyway, my mission is to inspire action, not produce despair. And I really think the time is right for change. All the data supports the need to create a new world order. If these young women seize the moment, it can be done.

But, yikes, maybe I had scared them!  I didn’t want to leave my audience feeling there was no hope. But I also did not want to try to sell them a false idea that there is some magical way to manage this situation on an individual level.  I know from conversations with earlier classes of MBAs that they do not appreciate the role model who stands up at a reception designed to “inspire” them and says:  “I home-schooled all nine of my children and am still head of a leading investment company. You can do it, too!”  It just makes them depressed.  And angry.

Anyway, there is no individual solution because this is a systemic problem.  I wanted my audience to take that lesson away, if nothing else. As long as the system persuades us that each young woman is experiencing an individual problem that she alone is failing to solve, we are done for.  The only way toward a solution is to insist, together, on reform.  Unlike previous generations, this cohort has the support of major world institutions, not only the US government, but the IMF, the OECD, and the World Bank, along with many others.

The data have spoken.  It must be done and it can be done.

The most important takeaway: women’s subordination is an ingrained, totalizing, systemic problem, not an individual’s failure. If we are ever to transcend these ancient prejudices, we are going to have to join with each other to confront them. The women’s leadership of tomorrow will have to take a conscious step away from the strategies of the last generation of businesswomen: they must stop denying there is a problem, they must stop pretending they are not female, they must speak up instead of quietly absorbing mistreatment, and they must band together instead of trying to go it alone.

Normally, when I finish a speech, I am mobbed by young women who want to quit their jobs and save the world.  I always tell them to stay where they are because that is where we need them.  I have seen too many instances where more women at the top of a business would help all the women in the company, as well as their consumers. Business leadership is a place from which to have a serious impact on the world.  Though research shows that women tend to see business as immoral, this path is not to be dismissed as unworthy, even if many fellow travellers are creeps (and I won’t lie to you, there will be creeps).

So you can imagine how delighted I was that, after this particular speech, the women wanted to talk about how to engage with the problems I had outlined, from the position of business.  We all sat down in the folding chairs, sipping wine and talking candidly about the challenges. It was wonderful.

In academic year 2015/2016, I have been given a chance to teach “The Women’s Economy” to the MBAs at the Said Business School for the first time.  We will cover everything from the most basic exclusions experienced by poor women in developing countries to the question of quotas for corporate boards. After meeting the young women at this reception, I simply cannot wait.