New research, conducted by Mario Macis at Johns Hopkins University found that although women in many developed countries have comparable education and jobs to those of their male counterparts, earnings disparities between the genders are greater in wealthier countries. Macis set out to examine the reasons for the persistence of wage and leadership gender gaps and their consequences.
Gender wage gaps and women’s underrepresentation in leadership positions exist at remarkably similar magnitudes across countries at all levels of income per capita, Macis found. Women’s earnings are:
- 80% of men’s earnings in countries with a GDP per capita below $10,000
- 82% of men’s earnings in countries with GDP per capita between $10,000 and $30,000
- 76% of men’s earnings in countries with GDP per capita above $30,000
One great way to close this gap is to get more women into leadership positions. First of all, numerous studies have found a positive correlation between female leadership and firm performance. Macis’ paper also emphasized the beneficial role female leaders play in reducing gender inequality, and reports that interactions between female leaders and other women in firms have been shown to contribute to greater gender equality and to have a positive effect on female promotion in the lower ranks.
Macis’ findings are just the latest in a growing body of research showing that companies with more diverse workforces have better financial returns, which benefits everyone:
- A recently published study from the Peterson Institute reports that companies with at least 30% female leaders—specifically in senior management—had net profit margins up to 6 points higher than companies with no women in senior management. That is a 15% increase in profitability.
- In 2015, McKinsey & Co. found that companies in the top quartile for gender diversity are 15% more likely to financially outperform their counterparts in the lower quartile.
- McKinsey also found that companies with more balanced leadership do a better job recruiting and retaining talented workers, leading to cost reductions associated with replacing top executives.
- In 2014, MIT researchers found that a more even gender split not only leads to happier, more productive employees, it can increase revenue by 41%.
Ultimately, we find through these studies and many more that when women lead we all win. It is critically important that senior leaders commit to gender diversity. Although 74 percent of companies report that gender diversity is a top CEO priority, less than half of employees surveyed believe that to be true. To make headway, companies need to invest time and money in gender diversity. This makes for a happier workplace, and a more profitable one.
We need to use the power of our voices, keep the conversation going, point out injustices in our communities and in the workplace, and support legislation. And most importantly we need to join hands with our sisters and unite our voices, our actions, and our strength. That’s how change happens, and how together we can achieve full workplace and wage equality.