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Time to correct the greatest gap in the economy
At a time when efficiency, productivity and cost-effectiveness are mantras within business and industry, there is a glaring gap in the economy - the full integration of women in the workplace.
Even today, after the sustained pressure and success of campaigns for equality in hiring, for equal pay and for flexible working, still half of the population is under-utilised.
In 2021, when our economies should be blossoming with the added intellectual strength, determination and ability of millions of women, most countries and companies retain attitudes which should have been left to history a long time ago.
The reality is that the failure to integrate fully any particular segment of the population into the workplace is a failure not of that population but of society. All forms of discrimination means not allowing that group of persons the possibility to realise their potential. Such forms of exclusion amounts to deliberately choosing a worse economic outcome, as economic growth is a function of the labour employed.
A costly absence
The opportunity cost of lower female employment rates across the OECD is estimated at USD 6 trillion by PwC in their annual Women in Work Index. The World Bank calculates that the gender pay gap costs the global economy USD 160 trillion, and that countries are losing 14% of their wealth, on average, simply because of gender inequality. In Europe, the gender pay gap equates to women working two months per year for free, compared to men.
These are jaw-dropping statistics that should cause all of us to take a moment. Apart from any moral considerations regarding gender equality, economically speaking it is an own goal.
The situation has been made even worse by the pandemic. The rate of progress towards gender equality has slowed as women’s jobs have been disproportionately impacted by Covid. Health services, hospitality, food services, administration, and the arts are all areas in which women often dominate and which have been particularly blighted by Covid.
A choice we can ill afford
Redoubling efforts to close the gender pay gap and ensure greater inclusion across the board – not only for women but for all disadvantaged groups – is a task made even more urgent by our changing climate. Climate change is arguably the most formidable challenge humanity has ever faced. It will require vast resources and every possible tool in the toolbox to bring it to fruition and rarely has economic growth been such an imperative. With stronger growth, both private and government revenue will increase, and the climate transition depends upon it. Inclusion in all its forms is a growth strategy, and therefore an integral and necessary part of the effort to bring about a sustainable economy. Make no mistake; we will need every person, man or woman, to reach net-zero carbon emissions in 2050.
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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