The Spectacular Triumph of Working Women Around the World

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An appreciation of how far women have come in the world economy -- and how far they still have to go, even in the U.S.615 women china reuters fists.jpgReutersGrowth is complicated. But there are a few easy rules. One such decree is that you cannot expect to have a fully functioning economy if you insist on treating half of your adult population like second-class citizens.

And yet, many countries insist on doing just that with women. Look at Sudan. The nation placed 128th out of 128 countries surveyed by the Economist Intelligence Unit's second annual Women's Economic Opportunity Index, released Tuesday morning. (Sweden was first. We were 14th.)  "Women in Sudan still do not have access to bank accounts or financial services," the authors write, "and are not free to manage their own financial affairs, even when a woman is widowed and left money by her husband." It's not much better in Yemen, 126th on the list, where it is illegal for women to leave the home "without permission from a male family member or an escort."

The triumph of women in the workplace has been one of the great success stories of last 100 years. Remember, in the U.S., it wasn't until 1920 that the states signed a constitutional amendment banning voting discrimination by sex. Less than a century later, the rise of the female worker has added nearly 2 percentage points per year to GDP growth. In Europe, economists estimated that the shrinking gap between male and female employment contributed 25% of Europe's growing wealth in the last two decades. As the Economist once put it: More than China, more than the Internet, and more than banks and central banking, economic growth is driven by women.

And economic stagnation is driven by women not working. One in two prime-age women -- that's 1.5 billion in the world -- are not active in the "formal global economy," according to EIU, which means they're either unemployed or working part-time by cleaning, cooking and selling wares and simple services for petty cash.

The triumph of female employment and opportunity is quite possibly the most important economic story in the world. That was the case before the recession, and it will be true after the recession. Here is a brief global tour of the state of female education and employment. For my roadmap, I'm using recent studies from the Economist Intelligence Unit, Bank of America economist Neil Dutta, and the U.S. Census.

THE UNITED STATES:
More Graduates. Equal Work. Less Pay.

Screen Shot 2012-03-06 at 4.48.58 PM.pngWe begin our world tour at home. If the downturn was sexist, so was the upswing: Both were biased toward men. In the Great Recession, male employment fell by twice the rate of female employment. But in the recovery, jobs have grown three-times faster for guys. As a result, women have recovered only a quarter of the jobs they lost, while men have filled 40%.

"We attribute this phenomenon to a few factors," writes Neil Dutta, U.S. economists for Bank of America, in the new report Global Girl Power. In a sentence: Male-dominated like manufacturing and mining bounced back, while some female-heavy industries like education and local government shrunk even as the economy accelerated.

For a brief period in the trough, however, women made up a majority of the workforce in the United States for the first moment in U.S. peacetime history. Get used to that picture: You'll be seeing a lot in the future.

American women are well-placed to gain over men in the workforce for three big reasons. First, they earned three out of every five higher-ed degrees awarded in the last 10 years, which suggests they will have an advantage in tomorrow's market. Second, as the economy transitions away from male-heavy construction and manufacturing, guys will have to do jobs today that aren't so muscular. Third, the fastest growing jobs in the next ten years are already dominated by women, especially those in health care.

But when it comes to wages, equality is elusive. In 2009, the median female wage was 77 cents to the median guy's dollar, according to the U.S. Census. Women earned less, on a per-month basis, than men at every degree level. Here's a graph -- please click to enlarge -- of male (blue) vs. female (red) monthly earnings for selected degrees at community college, four-year colleges, and graduate school. As you can see, even if women dominate the number of graduates, men dominate post-graduate wages across the board -- and their lead appears to grow with schooling years.

big education thing.png 
What accounts for this widespread, lingering discrepancy of pay? Barriers to career advancement, family choices, office sexism: All of these play a big role. But there two more economic explanations that I hadn't seen before reading the Bank of America report.

First, many degrees with lower-than-average pay are dominated by females, and many degrees with higher-than-average pay are dominated by men. In 2009, women accounted for 80% of education degrees and 60% of natural science degrees ... but only 40% of business degrees and less than 20% of engineering and computer science degrees. Second, it seems that female workers have clustered in a small set of industries that have grown very quickly, but also tend to pay less. This is also true in Europe, which is next on our worldwide tour.

EUROPE
Just Like the United States. But More So.

Screen Shot 2012-03-06 at 4.50.16 PM.png

In the European Union, as in the United States, women go to school more, earn less, and are scarce at the corporate executive floor. The glass ceiling extends across the Atlantic Ocean.

EU women hold only 20% of management positions -- and less than 3% of senior managerial roles, according to BofA. Seen at this canopy level, Europe appears as male-dominated as the United States. At the roots of the labor market, women have even greater educational advantages. The typical European female worker has three more years of education than the guys, and the last decade produced 40% more female graduates than male.

In fact, Europe was the overwhelming winner of the Economist Intelligence Unit's Women's Economic Opportunity Index, grabbing the world's top seven spots thanks to "robust, gender-sensitive legislation and progressive cultural norms," especially in the north.

"Northern Europe dominated our list because both the laws and social norms are favorable to women," explained Sandra Taylor, key spokesperson for the index and report. "Political participation among women is greater. There is more evidence of equal pay for equal work and access to finance for women." 

In 2010, EU women earned a sixth less than men despite totally crushing it at the school level. One reason to expect this wage gap will disappear quickly is that women have big leads among education, health care, business, and law graduates -- the basic elements of a service economy. One reason to expect it won't change quickly is that austerity has already squeezed education and health care hiring.

THE REST OF THE WORLD
The Dark Side of the Industrial Revolution
Screen Shot 2012-03-06 at 5.20.42 PM.png

As a general rule, women are thriving in countries that are rich, stable democracies. Unfortunately, much of the world is neither rich, nor stable, nor democratic.

These are the countries that deserve our greatest attention. In the 128-nation Women's Economic Opportunity Index, "it's in the 80s, 90s, and 100s where the greatest opportunities for empowerment are," Sandra Taylor said. "That's where growth is going to come from. Our index offers a target for where we should target interventions to help women, and what interventions we can realistically make."

The simplest explanation for the lack of female opportunities in developing countries lives in the word "developing." These nations are decades behind Europe and the U.S. in wealth, education, service sector jobs, and formal economic development.

Screen Shot 2012-03-07 at 9.30.07 AM.pngIt lends some clarity to view the worldwide story of women through the lens of manufacturing. Manufacturing is -- and has often been -- a male-dominated industry. As the United States and Europe off-shored manufacturing, they moved toward a service economy that might benefit women. As this industrial base moved to China and India, developing economies had manufacturing revolutions that disproportionately employed men. As advanced, heavy machines come to dominate world agriculture, we could see more women temporarily squeezed out of formal jobs. As these countries get richer, they might become service economies with highly educated women, too. But the fact is, some economic growth is biased toward guys.

The ticket off the farm and the streets -- where more than a billion women work in the so-called "informal economy" -- is education. There is a happy story to tell here. In almost every geographic region, women are catching up to men in school years, as the BofA graph above shows (click to expand, it's a great one). But some of the world's most exciting emerging economies are backtracking. In India, the school-year gap between men and women has grown by 50% in the last 40 years.

***

We end where we started, at home. In the United States, we ponder the end of men and economists discuss ways to retrain guys to be better suited to the modern economy. This doesn't look to many people like good news, and for millions of men trying to support families, it is a real, and addressable, economic tragedy. But seen from the chockoblock bazaars of Hyderabad, where women push their wares on tourists, and the straw huts of Kenya, where they walk half marathons to and from the nearest water source, it does represent a triumph of economics and development that in the advanced world, policy makers have cause to advise their male populations to "be more like women." Inequalities exist in the modern world, if not in our laws, then in our culture and practices. But looking across countries and decades, one can't help but see that the long arc of history is bending toward women, and is still bending.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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