The Economic Cost of Gender Inequity and the Leaky Pipeline

By: Katica Roy

In no country on earth are women equal to men. Not one. Not by any measure – World Economic Forum, United Nations, Organization for Economic Co-operation and Development (OECD) and more.

In fact, in North America, it will take 158 years until we reach gender equality if our pace and urgency don’t change.

If gender equality is the vision, gender equity is the path.

“Gender equality, equality between men and women...does not mean that women and men have to become the same, but that their rights, responsibilities and opportunities will not depend on whether they are born male or female. Gender equity means fairness of treatment for women and men, according to their respective needs. This may include equal treatment or treatment that is different, but which is considered equivalent in terms of rights, benefits, obligations, and opportunities.” United Nations Educational, Scientific and Cultural Organization (UNESDOC)

The gender equality conversation plays out across every aspect of life; however, the aspects tend to converge in one arena: the workplace. Women are leaving the workforce in significant numbers, and by the U.S. Bureau of Labor projections, we will continue to see a decline in the labor force participation of women for the next seven years. Why are they leaving?

Mommy Tracking & Universal Assumption

At best, the “mommy tracking” concept -- that women are less committed to their careers once they have children -- is an ill-informed oversight. For starters, 60% of working women stay in the workforce long after the birth of their first child. Additionally, falsely attributing the departure of women to motherhood overlooks the fact that 90% of women leave their jobs for reasons other than having a child. There is a difference between why they leave and when they leave. We’re not listening.

Meaningful Employer Investment

In the United States, the labor force participation of women fell from 59.2% in 2004 to 57% in 2014 and it is projected to fall to 55.8% in 2024.

Meanwhile, the U.S. faces a rapidly growing skills gap. A recent Georgetown University study projected a 5 million skilled workers shortage by 2020. Less than three years from today.

So, more women are leaving the workforce at a time when we actually need more of them to stay -- and to succeed. Yet the investment in them and approach to valuing them lack alignment with their capabilities.

Let’s look at the research:

• Men are promoted at a rate of 30% greater than women at their first promotion
• If there is only one woman in the candidate pool, she has statistically no chance of getting the job
• We have a pay gap of 21% in the U.S. and 61% in top 2% of wage earners
• Statistically women are better sales professionals than men, yet are paid less and are a lower percentage of senior sales staff
• Women take on almost twice as much unpaid work as men, and that correlates to decreased opportunity to assume leadership positions and lower labor force participation
• And, if women advocate for gender diversity, they are penalized

Clearly, we have off spouts and cracks in the pipeline where missed opportunities for potential investment in female employees leads instead to their exiting the workforce, to decreased labor force participation of women and lower leveraging of talented women. In other words, we have a very leaky pipeline.

These issues are causing the workforce pipeline to leak not only the talent to get the job done, but also lost opportunity for growth and innovation. Beyond the immediate social injustice, it is also causing a $2 trillion GDP gap in the U.S. – businesses are losing money and constricting their economic footprint, because they are not embracing the full capacity and capability of the female labor force.

The Byproducts of Gender Inequity

Let’s not forget that in 40% of U.S. households with children under the age of 18, women are the primary or sole breadwinner.

And when we underinvest in our female workforce, we pay the price both now and in the future:

• Among people 65 and older, more than twice as many women (nearly 2.9 million) as men (over 1.3 million) lived in poverty in 2013
• The U.S. would close the Social Security Savings gap by a third if we closed the gender pay gap
• 56.5% of children living in poverty are living in households headed by women. So, not only are we leaving women behind, we are leaving the next generation behind.

The leaky pipeline has immediate and long-term costs that exponentially metastasize the longer we wait. We must correct and change the narrative: Women are not broken; the system is broken. And we must focus on the real issue of fixing the system. Why are we waiting?

Let’s fix the leaky pipeline -- share your thoughts on changing the narrative.

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Katica Roy is an ambassador for gender equity in the workplace and beyond. She is the CEO and co-founder of Denver-based Pipeline, a SaaS platform that leverages artificial intelligence to drive economic gains through closing the gender equity gap.

Ellevate Network is a global women’s network: the essential resource for professional women who create, inspire and lead. Together, we #InvestInWomen.