Their growing clout-as entrepreneurs, executives and consumers- is changing how companies do business and spurring economic growth around the world
THE FIRST WOMAN TO HOLD A SEAT on the New York Stock Exchange, Muriel “Mickie” Siebert, passed away in August 2013, leading many to look at how far women have come since she took her place at the Wall Street “table.”
The economic gains are impressive: 21 women now lead Fortune 500 companies1, with millions more women buying the products and services those companies produce. Perhaps one of the biggest breakthroughs for women’s influence came October 2013, when Janet Yellen became the first woman to be nominated as chair of the Federal Reserve Board. Yellen’s confirmation made her not only the first woman to hold the position of gatekeeper of our economy, setting monetary policy for the U.S. government, but also one of the most powerful people, man or woman, in the world economy. It’s becoming evident that the world is in the midst of a sea change in the fortunes of women. Where 30 years ago “Close the wage gap!” was the feminist rallying cry, today one notable thing about the wage gap is that it’s increasingly something that men experience. The titles of two best sellers—The End of Men and the Rise of Women and Lean In: Women, Work, and the Will to Lead—suggest how far the conversation has evolved.
The numbers informing that conversation are hard to ignore. Boston Consulting Group predicted last year that by 2030, women as a group will earn almost as much as men. Already, the number of U.S. women with six-figure incomes is rising at more than three times the rate of men who earn that much, according to Census Bureau data between 2007 and 2009. The wage gap still persists, particularly for women of color and older women who have moved in and out of the workforce during their careers. But increasingly young women, earning more than their mothers ever dreamed of, are entering upper management, with all of the power and responsibility that entails. In developing nations, meanwhile, women’s earned income has been growing at a rate of 8.1%, compared with 5.8% for men, according to Deloitte’s 2001 report, “The Gender Dividend.”
This is a shift that every investor should be aware of, says Mary Ann Bartels, Head of Merrill Lynch Wealth Management Portfolio Strategy. “Women’s growing economic power has international implications, and in the coming years there will be many avenues for pursuing the opportunities it represents.”
Women’s success lifts all boats
As women have entered the workforce in increasing numbers, entire economies have benefited. In the four decades from 1970 through 2009, for example, women went from having only 37% of all U.S. jobs to almost a 48% share. That put an additional 38 million women in the workforce, according to a McKinsey & Co. report from 2011—and without that growth in the labor force, McKinsey estimates that the U.S. economy would be 25% smaller than it is today.
Global industry consultant Strategy&, formerly Booz & Co., estimated in 2012 that if female employment rates in the U.S. matched the rate for men, it could boost U.S. gross domestic product by 5%. The potential gains are even higher in places where women’s current underrepresentation may be more pronounced. In Japan, for example, women’s equal participation in the workforce could expand the economy by 9%, and in some developing nations, having equal numbers of male and female workers could add as much as a third to economic output.
Nearly 1 billion women will enter the global economy during the next decade, according to Strategy&. “Globally, as female labor participation rates rise there is a direct correlation to a rise in growth,” says Chris Hyzy, chief investment officer at Bank of America Global Wealth & Investment Management. “This not only leads to changes in demographics and social norms around the world—it also leads to investment opportunities.” Beyond the investment opportunities, the rise in dual incomes has personal implications as well. For many families during the most recent recession, the wave of unemployment hit men much harder than it did women—leading to talk of a “mancession.” Often, it was Mom’s paycheck that kept those families afloat.
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