Strategy&: At current rates, gender pay parity is 112 years away

Covid-19 has reversed years of progress for gender equality in the workplace across OECD countries, according to new Strategy& analysis. Pay parity alone might take more than a century to achieve if the status quo persists.

Marking International Women’s Day 2021, Strategy& highlighted how women are among the historically, socio-economically disadvantaged communities to feel the brunt of the pandemic-induced economic crisis. In focus are OECD markets – nearly 40 member countries that form a global economic cooperation platform.

“More women than men are employed in the sectors hardest hit by Covid-19; women’s job losses outpaced men’s in 2020 across the OECD,” noted Larice Stielow, senior economist at Strategy&. “With job retention schemes still masking the full effects of the economic fallout on employment, it’s likely that the worst is still to come for women.”

Then there is the matter of unpaid care and household work – a burden unfairly borne by women worldwide. Since the outbreak, these inequalities have intensified – “leading some women to reduce their participation in the workforce” according to Stielow. In many cases, this withdrawal will likely be permanent.

The outcome is a devastating setback for gender equality. Strategy& has been tracking gender parity in the OECD for years – along metrics of labour force participation, pay gaps and unemployment rates, among others. This year, all indicators have moved backwards.

Female workforce participation fell from 70% in 2019 to 66% in 2020, while the gap between female and male workforce participation jumped from 10% to 13%. The gender pay gap increased by 1%, and female unemployment rose by 2%. Strikingly, the number of men in full-time employment (FTE) was unaffected in OECD markets, compared to a 2% dip for women.

Decades to close the gap

The disparities are damaging as they are. More worrying is the time it might take to close them. “If the OECD is to completely recover from the damage done by Covid-19 to women in work – even by 2030 – our scenario analysis shows progress towards gender equality needs to be twice its historical rate,” noted Strategy& economist Tara Shreshtha Carney.

And this is just to recover from Covid-19. The path to numerical parity remains some way in the distance if current rates persist. An equal workforce participation rate, for instance, is 22 years down the line per the researchers, while closing the participation gap will take even longer.

Four years can be written off to bring unemployment on equal footing, while a staggering 60 years will likely pass before female FTEs equal the current rate of male FTEs. The feature story here is gender pay parity. According to Strategy& estimates, closing the gender pay gap will take 112 years at the current rate of progress.

The situation is far from sustainable, and a concerted effort is needed. Social considerations aside, the experts highlight the economic benefits to be derived from a more equal economy. “Our analysis finds that increasing women’s employment rates across the OECD could boost GDP by $6 trillion per annum, while closing the gender pay gap could boost female earnings across the OECD by $2 trillion per annum,” concluded Stielow.