Add to the many good reasons to overcome gender income inequality the compelling business case. McKinsey & Co. recently calculated that advancing women’s income equality on par with male counterparts could add as much as $28 trillion, or 26 percent, to the global annual GDP by 2025. That is equivalent to the size of the Chinese and U.S. economies, combined.
The World Economic Forum states: “As women become more economically independent, they also become more significant consumers of goods and services, including the majority of purchasing decisions of the household. The combined impact of growing gender equality, the emerging middle class and women’s spending priorities is expected to lead to rising household savings rates and shifting spending patterns, affecting sectors such as food, healthcare, education, apparel, consumer durables and financial services.”
The economic benefits of closing the gender pay gap can be felt globally, in both advanced countries as well as developing countries. According to the WEF, greater female participation in the United States workforce since 1970 accounts for 25 percent of the country’s current GDP. McKinsey analyzed 95 countries worldwide, finding that in 46 of them the best-in-region outcome could increase annual GDP by more than 10 percent in 10 years. The Indian and Latin American economies stand to benefit the most in reducing the earnings disparity among the sexes while the U.S. and Eurozone GDPs would increase by nine percent and 13 percent, respectively. Conversely, Asia and the Pacific lose as much as $47 billion annually as a region by limiting women’s access to employment opportunities. “If women – who account for half of the world’s working-age population – do not achieve their full economic potential, the global economy will suffer, reports McKinsey.
To make equality a reality, the private sector needs to work hand-in-hand with the public sector as well as with nongovernmental organizations. This is a massive effort that will require the cooperation of all constituents that stand to benefit from closing of the economic divide between men and women. Writes the World Economic Forum: “Ensuring the healthy development and appropriate use of half of the world’s available talent pool thus has a vast bearing on how competitive a country may become or how efficient a company may be.”
If the global business case for closing the gender pay gap is not convincing enough, consider an April 2013 fairness study conducted by scientists in which one Capuchin monkey was rewarded with a bland cucumber while her counterpart was given a sweet grape for performing the same work. The result shows that unequal pay for equal work is offensive even to nature.