One More Thing Justin Trudeau Has Figured Out That America Hasn’t

Photo Credit: Flickr / Alex Guibord

By Fairygodboss

READ MORE: Childcare, Gender equality, Maternity leave, Paid leave, Parental leave, Women in the workplace, Accenture, Economics, Family, General Electric, PwC, Working dads, Working moms

It’s no secret that the playing field for men and women in the workforce is far from level.

We are making progress in baby steps; in fact, the percentage of women in the U.S. workforce drastically increased over the past several decades  — which in turn led to better national  productivity and a higher standard of living. Yet in spite of that forward movement, we’re also faced with the gloomy fact that women’s increasing rate of workforce participation began to slow in the late 1990s.

What accounted for this decline, and what can we do to reverse it? A recent Wall Street Journal article by Ben Leubsdorf suggests that we look to our friendly neighbors up north for guidance. For decades after World War II, women in both the U.S. and Canada joined their countries’ respective workforces in growing numbers. But when that trend slowed down in the U.S., it continued north of the border.  

Leubsdorf, who analyzed data from the Organization for Economic Co-operation and Development, notes that “by 2016, 74.3% of U.S. women between the ages of 25 and 54 were working or looking for work, compared with 82.2% in Canada. Both were near 76% two decades earlier. The participation gap between men and women also narrowed more in Canada than in the U.S.”

So, what’s causing the difference in participation between the U.S and Canada? To answer that, it’s important to have a sense of what factors might be hindering U.S. women’s workforce participation for a number of obvious reasons (#equality and #diversity, to name a couple) — but understanding the gender gap might also be key to the U.S.’s economic growth.

As Leubsdorf points out, “President Donald Trump has pledged to boost annual increases in U.S. output from around 2% to above 3%. Achieving that ambitious goal would likely require, among other things, boosting labor-force participation.” Of course,  broader differences between the U.S. and Canadian economies may also be impacting their workforce numbers; for the past 20 years, Canada’s average economic growth has been slightly higher than that of the U.S., and the country hasn’t experienced a recent financial recession (thanks, ’08) either.

Still, there’s reason to believe women’s decreased participation the U.S. workforce reflects other conditions and policies, too.

“Canada’s federal government encouraged more two-working parent households in the late 1990s and early 2000s by cutting tax rates, adding support for child care and expanding paid parental leave. Quebec’s provincial government introduced universal day care,” Leubsdorf writes. In contrast, “The U.S. government spends relatively little to subsidize child care and has no national paid family-leave program, though employers are required to grant up to 12 weeks of unpaid leave.”

We know that from a business perspective, one of the main benefits of offering employees paid parental leave and childcare support is improved employee retention — so it’s no surprise that Canada’s policies ultimately resulted in an increase in female workforce participation.

In fact, Federal Reserve Chair Janet Yellen has cited research indicating that “policy differences—in particular the expansion of paid leave following childbirth, steps to improve the availability and affordability of child care and increased availability of part-time work — go a long way toward explaining the divergence between advanced economies.”   

Yellen also pointed out that if the rate of working women were to rise to the same level of working men, America’s annual economic output would stand to benefit by 5 percent — but the only clear way of getting there, she affirmed, is by making jobs outside the home more accessible to women by mimicking some of Europe’s more mom-friendly work policies.

Of course, there are some individual U.S. companies, such as Accenture — which has recently pledged to have a completely gender-balanced workforce by 2025 — that recognize how crucial it is to attract and retain more female talent. Accenture and other top firms like PwC and GE are no doubt leading the way and encouraging other employers to follow suit.

But we surely hope that some policy changes are enacted on a national level, as well, so that all women — moms and non-moms alike, no matter what their background or area of interest — will be better supported if and when they decide to enter or return to the workforce.

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