Forget tax cuts. The economy needs more working women.
If you really want to make America great again, get more women in the workforce.
That’s the top takeaway from a new report by Standard & Poor’s chief U.S. economist, Beth Ann Bovino, who says in the latest POLITICO Money podcast that the nation would be in much better shape if women’s participation in the workforce had not stalled out in the 1990s.
Bovino said the U.S. economy could be much larger and more productive if it just kept adding women to the workforce at the same pace Norway has since the 1970s. And she said addressing the issue would add much more to economic growth than the tax-cut plan, H.R. 1, now moving through Congress.
“If the participation rate of women in the United States kept at the same pace as what happened in Norway, we would have today, as of 2016, an economy that is $1.6 trillion larger,” she said. “That means $5,000 for every man, woman and child in the U.S. It seems like it would be worth it.”
The pace of women joining the workforce in the U.S. slowed for many reasons, Bovino said. High among them: the lack of mandated paid maternity and paternity leave.
“The U.S. is the only country in the OECD that doesn’t provide income support during maternity and paternity leave,” she said, referring to developed countries in the Organisation for Economic Co-operation and Development. “If it costs a lot as a woman who is taking care of children, you are going to do a cost-benefit analysis and say: ‘Is it worth it to get that paycheck when over 50 percent goes to child care? Maybe I’ll just stay at home.’”
Bovino, one of Wall Street’s leading economic forecasters, said finding ways to increase participation among women will be especially key in the coming decades as the baby-boom generation retires.
“At a time when we have baby boomers leaving the workforce at a very sharp pace, having those women in the workforce over the next few decades, the productivity gains and the competitive edge that we would have, would grow the economy by leaps and bounds, by 5 to 10 percent going forward.”
On the public-policy front, Bovino suggested adding a formal score, such as those done by the CBO, to every major piece of legislation, assessing how it would impact women in the workforce.
“Think about it as kind of a cost-benefit analysis on the decision to work, taking into account child care costs,” she said. “This is something that the CBO has done, or something similar, when the Affordable Care Act was being enacted.”
On the recent raft of sexual harassment cases in politics and the business world, Bovino said it was too soon to attach a dollar cost but that the impact on women deciding to stick with careers and rise up the corporate ladder was likely immense.
“It’s incredibly hard to quantify both the psychological impact on the women and the workforce,” she said. “Even if it happened to just one or two women within the workplace, probably the sentiment is felt across the office, and that has a traumatic impact on morale. And if morale is hurt, that slows down productivity.”
Source: POLITICO – TOP Stories