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FT editor Roula Khalaf will select your favorite stories in this weekly newsletter.
The writer is founder of Lean In and Option B and former Chief Operating Officer of Meta.
This is a key moment for America and its economy. There is a fierce disagreement on almost every issue you can think of. But there is one thing we all agree to. We want a strong economy. This is the foundation of the US national security, global status and the well-being of our family.
The best way to have a strong economy is to maximize the potential of women in our workforce. To understand the impact of losing women’s workforce participation in America, look at Japan. Low birth rates, near zero immigration rates and low utilization of women’s capabilities were key factors in the economic stagnation in 30 years. Between 2000 and 2022, Japan’s labor productivity fell from about 70% in the US to just 58%.
In 2013, Prime Minister Abe Shinzo launched a “Women’s,” an economic plan aimed at reversing this trend by increasing the number of women in the labor market. But so far, Womennomics has been partially successful. While more Japanese women work, almost half of them work part-time or temporary jobs. The gender wage gap in Japan is an astounding 32%.
The United States faces similar forces that could lead to stagnation. Population growth is projected to slow to 0.25% in 2038. Immigration is expected to decline in the coming years. And women are underrepresented in workforces of all levels, cohorts of all ages, and almost every sector.
Workforce participation among American women is 57% compared to 68% of men. That’s an 11-point difference, despite women making up half the population. Gaps exist at all ages. Worse, for workers in the most productive years (ages 25-54), women’s participation in the United States has stagnated, lower than that of Japanese women.
The leadership gap in the US is even more pronounced. Women earn 59% of university degrees, but only 11% of Fortune 500 CEOs. This is not due to a lack of ambition. Women are interested in moving forward and are more likely to seek promotions, just like men. To embrace leadership disparities, we must believe that male college graduates are nearly 12 times more talented than female counterparts. Obviously, it’s not.
Filling these sustained gender gaps in workforce participation and leadership, our economy and our country are stronger and more competitive.
If the women’s workforce to the US reaches the highest level seen in other G7 countries, our workforce has around 700,000 women, and the economy could increase by an additional 4.2%. This is a huge boost given that, on average, the US economy has grown to under 2% per year since 2015.
Several studies have shown that leveraging women’s talents also directly benefits companies. According to a 2016 Business Survey by Credit Suisse, at least 15% of women in senior management reported 50% higher profits than women in less than 10% of leadership roles.
This is not to say that there are fewer men in the workforce. The higher the ability we have, the better. In my time working in Silicon Valley with the US Treasury for decades, I saw firsthand how you draw from the best you are very available, leveraging the talent of the entire population. It is not surprising that this will improve economic growth and business performance.
Unfortunately, we live in a culture that doesn’t always encourage women to lead or welcome their contributions. Systematic barriers still exist – this is especially true for women of color.
This not only hinders these individuals, it also holds back the entire economy. This was true in 2013 when I wrote Lean In, but unfortunately it’s still true today.
Now, more than ever, businesses need to continue to be committed to women’s progress. It’s not about special treatment – it’s about leveling out the arena. This means that all women have access to mentorship, sponsorship, and networks that men have had for a long time. It means tackling the widespread bias that hinders and promotes the best people. And that means that companies need to believe in the potential of women, giving them the same opportunity to prove themselves that men know what they are getting.
This is not just a fair question. It is an economic obligation. For America to remain competitive, safe and economic superpower, it is necessary to reach its full potential for women.
