Independent Thinking^®

“Womenomics” in the United States

It’s been almost 25 years since a Japanese economist, Kathy Matsui, put forward the concept of “womenomics” as an antidote to sluggish economic growth. The concept, rooted in a belief in gender equality, was that full female participation in the workforce would generate fresh perspectives, enhance innovation, and boost overall productivity. Few – or at least considerably fewer – people would argue with that hypothesis today. But in that time, female participation in the U.S. workforce hasn’t really budged.
 
The gains between 1950 and the late 1990s were remarkable with a 260% rise in women joining the U.S. workforce, according to the U.S. Department of Labor. And the economic gains of that period – a fivefold increase in U.S. real GDP – paved the way for Matsui’s theory. But around 1999, when she published her argument (and the Japanese workforce still looked a lot like the U.S. one in the 1950s), U.S. progress in women’s labor force participation stalled. Today, 57.3% of working-age women participate in the U.S. labor force, compared with 68.1% of men.¹ The World Bank today ranks the United States about halfway down its list of high-income countries in terms of female labor force participation – still above Japan but well behind that of many other large economies.
 
Changing demographics, as described in Is Demography Destiny? by Brian Pollak and Where Are the Kids? Demographics in the United States by John Apruzzese, could be seen as bolstering the case for womenomics. If labor, especially young labor, is in short supply in developed economies, encouraging more women to join the workforce would make sense. However, as Brian Pollak observes in his article, an unintended consequence of female empowerment in the workforce has been a decline in fertility rates; families around the world struggle with work-life balance and traditional social mores.
 
Near term, embracing womenomics in the United States could be instrumental to enhancing economic growth. The broad range of remote work or hybrid options available today may encourage women to seek and retain employment. And higher wages, especially for the lowest paid workers, are making it more economically beneficial to stay in the workforce.
 
Judy Moses is a Partner and Portfolio Manager at Evercore Wealth Management. She can be contacted at [email protected].

¹ U.S. Bureau of Labor Statistics