In previous articles I’ve written about the boost to western economies that can be achieved by ensuring gender equality in entrepreneurship.
The general idea is that persistent inequality means that too much of the talent we have available to us is being left untapped.
It’s an ethos that’s shared by recent research from Stanford Graduate School of Business, which highlights the economic gains that are possible from greater equality in the workplace. Indeed, the authors believe that a whopping 25% of the economic growth achieved in the United States between 1960 and 2010 can be attributed to greater racial and gender equality in the workplace, and believe it could even be as high as 40%.
Distribution of talent
The researchers reasoned that as around 94% of doctors and lawyers in America were white men in 1960, and this had shifted to around 60% by 2010, a similar distribution could be found across many fields. This would allow them to explore how balance in the workplace contributes towards GDP.
“The 94 percent figure, of course, is really, really, really far from that,” the researchers say, “which suggests that in 1960, you had all these not-very-talented white men who were doctors and lawyers and lots of extremely talented people from other groups who were excluded. In the past 50 years, these groups have been changing places.”
The notion was that in the 1960s, you had quite a few white male doctors who weren’t especially good at the job, with numerous people from other groups shut out of the profession. This has gradually changed over time, and this has benefited the economy.
As well as providing an overall boost to the economy, however, this shift has an obviously detrimental effect on the income of white men, who are no longer so unfairly dominant in the workforce. The data suggests this redistribution of talent accounts for a 12% fall in white male earnings.
“There is, of course, a cost to consider as white, male doctors and lawyers and other professionals are replaced by, or competing with, other people,” the researchers say.
They argue that this provides far greater gains however across society as a whole, as black men have seen earnings grow by 29%, black women by 51% and white women an incredible 77%.
Barriers to employment
Nonetheless, barriers to employment clearly still exist, ranging from blatant discrimination to a lack of educational opportunities for certain sections of society. Even social norms can limit the ability for people to successfully enter the workforce.
“Over the last 50 years, more than a quarter of all growth in the U.S. GDP is attributable to these declining barriers in the labor market,” the authors explain. “If we ask where, specifically, that growth came from, much of it is from women moving out of the home sector and working in the market, especially in highly skilled occupations.”
The data also revealed that the wage gap was fairly stable across professions, despite there being considerable gaps in employment prospects between groups. For instance, despite women being some 250 times more likely to be a secretary than a lawyer in 1980, a female secretary and a female lawyer would still earn around 30% less than their male peers.
“The key insight, though, and what I find interesting and surprising is this: Looking back at the world in the 1960s, it is stunning how big the differences were in terms of men and women and blacks and whites in the workplace,” the researchers conclude. “We’re far closer to an equitable balance today, and it’s important to be aware that such gains aren’t simply good for the groups that most obviously benefited, but for the economy as a whole—for all of us.”
AI uncovering inequality
Given the propensity of stories, books and reports charting the way unfettered destruction AI is going to unleash on the labor market, it may seem strange to believe that the technology might actually help deliver this equality-driven economic growth.
That’s the hope of a new project by researchers from Lancaster, Exeter and Alberta Universities, which aims to utilize AI in uncovering unintentional biases in areas such as recruitment and networking.
They aim to work with a number of industrial partners to better understand the gender and ethnic biases that exist within HR processes, with data crunched from hiring and recruitment platforms. Ultimately they hope to use this insight to develop an AI-based tool to help mitigate and address these biases.
“We need to tackle labour market inequalities caused by gender and ethnic biases in hiring, job advertising and professional socialisation,” the researchers say. “They prevent equal and sustainable socio-economic development across all groups in society, and the recruitment process can often be the start of these issues.”
Given the problems AI systems have had with perpetuating biases themselves, it would certainly be a nice turn up if they were also able to reduce biases in the labor market. The benefits of being able to do so are clear, and the challenge will be whether technology can lend its weight to changes already being made across society.
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