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McKinsey: Boost gender parity -- and the GDP

Thursday, August 11, 2016  
Posted by: Rufino Cabang
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Full gender equality in the United States could add up to $4.3 trillion to the annual gross domestic product by 2025 – and companies can drive change, according to a new report from the McKinsey Global Institute.

A more likely scenario, where every U.S. state catches up to the states most rapidly progressing toward workforce gender parity, would add $2.1 trillion — or 10 percent — to the country’s GDP, according to The Power of Parity: Advancing Women's Equality in the United States. This increase over the currently expected 2025 GDP would be the result of three factors: a higher number of female workers, a narrowing of the gender gap in the mix of men and women working part-time and full-time, and increasing women's employment in more productive workforce sectors, such as professional business services and manufacturing.

While all U.S. states rate highly in gender equality, each has some distance from an ideal state. Using a State Parity Score (SPS) of 1.00 to represent perfect gender parity, the report shows that SPS results range from 0.58 (Alaska) to 0.74 (Maine). Northeastern states rate highest overall, states in the South average the lowest, but "all states have an opportunity to improve gender equality," McKinsey says.

What's stopping us?

McKinsey identified these six "impact zones" that negatively impact women’s participation in the workforce — and their ability to advance to leadership roles:

Representation in management. McKinsey recommends companies take a comprehensive to advancing women, emphasizing flexibility, hiring transparency and the support of women's networks.

Time spent in unpaid care work. Increasing the amount of available paid parental leave has been shown to decrease the rate of new mothers leaving their jobs.

Single motherhood. Initiatives that offer skills training and childcare solutions will increase the likelihood of better jobs for low-income, single mothers.

Teenage pregnancy. Education, access to birth control and media messaging can all contribute to a decline in teen birth rates.

Political representation. Training and fundraising programs for women running for office can help balance gender inequality in political leadership.

Violence against women. Preventive and practical programs, including education, shelter and legal services, are valuable tools for women in need of safety, financial empowerment and independence.

A win for everyone

Interventions in four of the impact zones — unpaid care work, management positions, single motherhood and teenage pregnancy— in the 10 most affected U.S. states would improve equality for more than 50 percent of the women affected. Organizations can help, the report says, by considering their own unique skills and advantages in the effort to narrow gender inequality state by state.

"Corporations have the clout not only to drive change within their own organizations," McKinsey notes, "but also to inspire action and motivate change in the broader community through financial support and public advocacy and by providing the human resources and capital required to kick-start a movement."

Download the report

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