The economics of gender equity in Colorado
A $40 billion opportunity
In a 2015 Status of Women in the States study conducted by the Institute for Women’s Policy Research, Colorado was tied for 9th place with Rhode Island as one of the best states for women.
That’s good news, right?
Well, let’s not celebrate just yet.
In data science, when someone asks what a number means, our common response is: “It depends on your baseline.”
Our 9th place spot needs to start with the baseline. In no country on earth are women equal to men. Not one. Not by any measure, if you ask the World Economic Forum, United Nations, Organization for Economic Co-operation and Development (OECD). In North America, it will take 158 years to reach gender equality.
To be clear, gender equality does not mean that men and women are the same – rather it means that their “opportunities will not depend on whether they are born male or female.”
Our 9th place is merely saying we are less biased than most states in America. Gender bias equals a constricted economic pie: not just for women, but for everyone. So the economic pie in Colorado is less constricted, but constricted all the same.
Let’s start at the beginning. What do we mean by economics?
A 2008 Swedish study examined the connection between gender equality, economic growth and employment, and found three key factors to the interplay of economics and gender equality: education attainment, labor force participation and pay. Later studies, including McKinsey’s hallmark gender equality research, have confirmed this finding. In fact, these additional studies have further delineated the factor’s order of importance:
- Education attainment
- Labor force participation
- Pay (wages)
So let’s see how Colorado stacks up against those factors.
A 2012 study by the OECD found that for each additional year of education, there is a 10 percent increase in Gross Domestic Product (GDP) per capita. Overall, Colorado fares well in terms of education attainment by women. Some 37.5 percent of women in Colorado hold a bachelor’s degree or higher. That number is higher than the national number of 33 percent of women in the U.S. There is a catch though; when we add the lens of race and ethnicity coupled with gender, we find that intersectionality matters. If you are a white or an Asian woman in Colorado, you are almost twice as likely to hold a bachelor’s degree than you black, Native American or Latina sisters.
LABOR FORCE PARTICIPATION
First, the labor force participation rate of women in Colorado is slated to fall 2.32 percent by 2025. If we maintained the 2017 labor force participation rate of women in 2025 as it is in 2017, we’d have nearly 59,000 more women in the workforce.
Second, women are more than twice as likely as men to work part time. Both of these trends put downward pressure on the ability to continue to grow Colorado’s economy. Bottom line: we need women to participate in Colorado’s economy – and participate more fully – if we desire to realize our full economic capability as a state.
In a state where our current unemployment rate is 2.4 percent and our compound annual growth rate is 1.9 percent, we need women participating in the labor force, and participating full time to continue to grow our economy.
Because labor force participation is a key supply-side ingredient to growing our state’s economy. It’s difficult, if not impossible, to grow our economy without a skilled labor force. In business terms, that’s your talent pool – who you can hire, the skills they possess, how long it takes you to hire, how long they stay with your company, etc.
In fact, McKinsey found in their research that increasing labor force participation rate of women in Colorado accounts for 41 percent ($16.4 billion) of our $40 billion opportunity – or ability for the state of Colorado to drive more GD – and increasing the number of women working full time accounts for 30 percent.
Increasing Colorado’s GDP is good for everyone. For citizens of Colorado, it means more jobs and increased wages. For the state, it means an increased tax base which is good for public projects such as infrastructure as well as attracting more businesses to Colorado because of our highly skills work force.
We will not reach equal pay in Colorado for 40 years – until 2057. Sure that’s below the average for all states in the U.S. of 2059, but it’s also worse than 18 other states. Women earn 80 cents on the dollar of their male colleagues. In fact, “at almost every educational level, women in Colorado earn less than men with lower educational qualifications.”
Women are also the sole or co-breadwinners in 42.5 percent of the households in our state with children under the age of 18. We are not only leaving out women, we are leaving out the next generation. In fact, in Colorado 36.5 percent of households with single mothers live in poverty (compared to a 19 percent poverty rate for single fathers and 7 percent for married couples).
What about the top earners in each state? A 2015 American Community Survey by labor economics research firm Job Search Intelligence (JSI) found that the gap between the top 2 percent earners by gender in the state of Colorado was 61 percent. That means that the top 2 percent female earners in Colorado make 39 cents for every dollar their male peers make. To clarify, this statistic is not just abut equal pay for equal work, but about equal opportunity.
WE HAVE WORK TO DO
Colorado, we have work to do – we have a leaky pipeline. There is great opportunity in fixing the system and immediately correcting the narrative on gender equity in the workforce. In shifting our thinking that women are broken, instead focus on the truth that the system is broken and needs fixing.
But, not if we wait.