Womenomics 101

By Joshua Holland, AlterNet. Posted March 16, 2006.

Women play a greater role in the American economy today than at any time since Rosie the riveter gave up making bombers for the baby boom after World War II, but American corporations -- enabled by a political class dominated by men -- continue to punish them for the high crime of being female.

The irony is that if public and corporate policies were to take the needs of working American women seriously, it wouldn't just give a boost to working families, it would also strengthen the economy; doing the right thing in this case also happens to be good for the bottom line.

The American workforce has one of the highest rates of female participation in the world. Between 1955 and 2002, the percentage of working-age women who had jobs outside the home almost doubled, while men's workforce participation fell by more than 10 percent.

That transition took place just as it became harder for a single-earner to keep a family afloat. Economist Doug Henwood showed that a worker making an average manufacturing wage had to work 62 weeks in order to earn the median family income in 1947. By 1973 that had risen to 74 weeks, and in 2001 it was 81 weeks.

So we can thank women's participation for a significant chunk of the American economy's much-vaunted "dynamism." Highly educated women entering the workforce in the 1990s added to America's "productivity miracle." Harvard economist Richard Freeman studied labor stats in 1998 and found that women moving into the workforce increased the employment rate by almost 10 percent. Forget about "business-friendly" regulatory environments and the wonders of "Rubinomics" -- that injection of fresh workers accounted for almost two-thirds of the difference between the unemployment rate in the U.S. and other advanced economies.

And women are a big part of that entrepreneurial class that we worship in this country. According to the Center for Policy Alternatives (PDF), one in four Americans now work for women-owned businesses; those firms grew at twice the rate of all new businesses between 1997 and 2002. It's part of our national edge -- American women start up almost five times as many new businesses as women in other high-income countries (PDF).

But for all they do to boost the economy, women continue to get the shaft across the American workplace. It's not just the wage gap -- which remains at around 20 percent four decades after equal wages were made the law of the land (According to the AFL-CIO, the average 25 year-old woman will lose almost a half million dollars over her working life). And it's not just the "glass ceiling" (white men make up les than a third of the workforce, but hold almost 95 percent of top corporate positions, women make up 46 percent of the workforce, but hold less than five percent). The real problem facing working women in the U.S. is that we have the most inflexible workplaces in the developed world.

According to Harvard's Project on Global Working Families (PDF), the United States is one of only five countries out of 168 studied that doesn't mandate some form of paid maternal leave. The only other advanced economy among those five was Australia's, where women are guaranteed an entire year of unpaid leave. That puts the U.S. -- the wealthiest nation on the planet -- in the company of Lesotho, Papua New Guinea, and Swaziland.

That means that women in America face a unique burden. Regardless of how enlightened we believe we are, the yoke of housework and childrearing and eldercare still fall disproportionately on women. The legendary progressive economist Marilyn Waring was the first to consider the economics of unpaid housework in the 1980s. Waring estimated that if what has traditionally been thought of as "women's work" were counted economically, it would constitute the world's single largest service and production sector.

Women haven't caught a break at home to compensate for going to work in the numbers that they have in recent decades. Suzanne Bianchi, a sociologist at the University of Maryland, studied time-use surveys and found that working mothers spent an average of 12 hours a week on child care in 2003, an hour more than stay-at-home mothers did in 1975. That double-burden constrains women's workforce participation, lowers fertility rates, and impacts the wealth of both women and two-income families in myriad ways.

Inflexible workplaces offer socially mobile women a devil's choice: they can advance in their careers or they can have families. According to BusinessWeek, female corporate execs are twice as likely to be child-free as the the female population as a whole. Those women making $100,000 dollars per year are two-and-a-half times more likely.

But more often women don't have that choice, and take the financial hit. Much of the "wage gap" is in fact a baby gap. Karen Kornbluh notes that women without children make 90 percent of what their male counterparts earn, but working mothers earn less than three quarters of what men make. A first child lowers a woman's earnings by an average of 7.5 percent, a second child by 8 percent.

It's not so much that women leave the workforce permanently to have kids, it's that when they leave their jobs for a period they can't return. That has a ripple effect across their working lives -- costing them raises, promotions and benefits. According to economist Heather Boushey at the Center for Economic Policy Studies (CEPR), "If women have paid leave they are much more likely to go back to their jobs, and much less likely to quit or switch jobs."

Leaving the workforce temporarily to have a baby or deal with a sick child or parent costs women seniority, raises and any benefits that require a lengthy stay of employment to become vested. Former Clinton advisor Gene Sperling points out that the average time a worker needs to put in to get pension benefits -- if they get them at all in our wonderful "New Economy" -- is five years. Men's average length in the same job is 5.1 years; for women it's under four. According to the AFL-CIO, "Half of all women with income from a pension in 2002 received less than $5,600 per year, compared with $10,340 per year for men."

With our uniquely inflexible workplaces, a third of women work in "non-standard" or part-time jobs with crappy benefits or none at all. All that helps explain why women over 65 are twice as likely to live in poverty than men.

And it's not just maternity leave; according to the Institute for Women's Policy Research (PDF), only half of American workers get paid sick leave and only a third get paid leave to care of a sick kid. Forget about paid leave for taking care of an ailing parent.

Pretty much every aspect of women's reproductive work is punished economically in the American workplace. And that affects all two-earner, nuclear households -- the ideal to which we're all supposed to aspire (the wage gap is estimated to cost working families $200 billion dollars per year).

But it doesn't need to be that way. We're so far behind the rest of the world (PDF) in commonsense, pro-women and pro-family policies that we don't need to reinvent the wheel to figure out what works.

In a globally competitive environment, we need expanded parental leave, universal pre- and after-school programs, more flexible work hours and time off to take care of sick kids and elderly parents. The Center for Policy Alternatives has a whole suite of measures that would help working families balance career and home (PDF).

The CEPR's Heather Boushey proposed addressing the wage gap with tax credits. A series of bills -- the "Fair Pay Act" and the "Paycheck Fairness Act" have been floated -- and defeated -- in recent years that would have enforced the fair pay laws that are already on the books.

Just about every measure to close the wage gap or mandate parental leave policies is opposed by the "dead-enders" of a cranky old patriarchy whose views are increasingly out of step with the realities of modern life and the imperatives of a global economy. When Bill Clinton managed to squeeze the Family and Medical Leave Act (FMLA) through Congress -- a brief, unpaid family leave measure for which only four in 10 workers qualify -- the late Strom Thurmond warned that similar measures in Europe had "contributed to a stagnating economy and unemployment." The Chamber of Commerce has been fighting the FMLA ever since, forming a fake grassroots group called "The National Coalition to protect Family Leave" to, well, destroy family leave legislation.
In fact, three out of four of the world's most competitive economies belong to Northern European countries with generous family leave policies, according to the World Economic Forum's annual rankings.

The truth is that family-friendly policies are also good for business. In his book, "The Pro-Growth Progressive," Gene Sperling reviewed the gains made by firms that have gotten ahead of the curve in workplace flexibility. He cited a study of 100 U.S. businesses that found that paid parental leave resulted in a 2.5 percent increase in profits. He cited another study which concluded that employees participating in one company's "work-life" programs were 45 percent more likely to say they'd "go the extra mile" for their employers than their colleagues who weren't in the program. Sperling concludes that giving employees more flexibility results in improved "motivation, making workers more productive" and ends up cutting costs by "reducing employee turnover."

The returns on investing in working families are high. The Department of Education estimates that the cost of universal after-school programs would be between $5 and $10 billion dollars annually -- the same as three to six weeks of the Iraq war. A study of a comparable program in North Carolina found that freeing up parents to work added $590 million dollars to that state's economy alone.

As is becoming increasingly common, progressives are making gains on these issues at the state level. California is leading the pack; in 2002, the state adopted a program that replaces slightly more than half of lost wages for six weeks for "any individual who is unable to work due to the need to care for an ill parent, child, spouse, or domestic partner, or for the birth, adoption, or foster care placement of a new child. According to the Institute for Women's Policy research, 21 other state legislatures are looking to follow suit. Real equal pay legislation has been introduced in at least 28 states.

It's time to nationalize the debate. Putting all these pieces together, you get a picture that puts the lie to the right's claim on "family values."

Working families have every reason to feel beleaguered by a culture that doesn't care about their values. They should have a clearly defined choice between progressive and conservative solutions; they can support the right-wingers who whine to Larry King about violence in videogames, but never do anything about it, or they can support liberals fighting for the United States to catch up with Mexico and Greece in terms of family-friendly public policy. Arguing for an economy that works for women and their families is the type of politics that once upon a time fueled the New Deal Coalition -- it's the promise of a humanist economy.

**This story has been corrected. In a previous version, the economic contribution of North Carolina's "Smart Start" program was given as $590 billion dollars.

Joshua Holland is an AlterNet staff writer.

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