When the G20 leaders declared they would boost global economic growth by an additional 2 percentage points over the next five years, the obvious question was ‘how’?
One of the answers surprised and bemused many. Female workforce participation around the world is way below male participation, so just get all those ladies into jobs! Problem solved.
The goal is to decrease the gap between male and female participation rates by a quarter by 2025 -- or “25 by 25” -- which will mean stimulating investment to create those jobs and lifting sentiment so that global consumers buy what the new female workers produce. Both are big problems, but not impossible.
What looks less possible is that a ‘25 by 25’ boost will occur in Australia.
Here, female participation has not changed very much in a decade, rising from about 55 per cent to 58 per cent (see chart below). Over the same period, male participation has hardly changed at all.
Of course, the G20 is not relying on Australia to boost global growth. So why does female participation matter?
There are two compelling answers. Firstly, the working-age population in Australia is shrinking relative to the total population. If we all stay here (When the young abandon Australia, November 19) a growing proportion of our national earnings will be used to pay the pension and healthcare costs of an ageing population. That will require all hands on deck, regardless of gender.
The participation rate does not tell the whole story, however. Anyone working a few hours a week is ‘participating’ for statistical purposes, but the number of hours they do is vitally important.
And on that score, the news isn’t good. Despite large increases in the hours worked per Australian resident during the Howard years, and another stimulus-led increase during the Rudd/Gillard years, the number of hours worked per resident continues to fall quite spectacularly.
So Australia faces a similar task to the rest of the developed world. While it would be great to have more women working, the jobs they could fill are every bit as much a function of investment/consumption forces as male-filled jobs.
Or rather, they are even more a function of those forces. Because when investors are timid (as they are now) and consumers are scared (as they are now), female workers lose their jobs more quickly than men because they are over-represented in part-time and casual roles.
And those dynamics feed into a second big reason why Australia should care about female workforce participation: their role in propping up the nation’s inflated housing finance system.
Around 2009 when the great ‘housing bubble’ debate was underway, including at Business Spectator, one of the arguments used by the ‘no bubble’ crowd was that although mortgages were much higher than in the recent past, more homes were now two-income homes due to women entering the workforce in unprecedented numbers.
Anyone who still believes that should glance again at the first chart above. The big changes in female participation took place between the mid-1970s and mid-1990s, which is before the epic run-up in house prices began. And as male participation fell, the overall participation rate (the green line) didn’t change all that much.
Now, with house prices at record levels and continuing to surprise on the upside, one would hope that women were working more than ever to help men pay for all that debt, particularly as wage growth overall is so sluggish.
The good news is that they are indeed doing more hours. The bad news is that a lot of that is down to population growth. ABS data shows that in the past seven years, the aggregate number of hours worked by women grew by 11.4 per cent, while the population increased by 14.2 per cent.
Or another way to look at it is that male hours worked increased in the same period by only 8 per cent.
That’s another way to close the gender gap in participation, I suppose -- convince men to stay at home. Now where’s my stubbie holder and the TV remote?
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