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Simon London: Hello and welcome to this episode of the McKinsey Podcast, with me, Simon London. Today we’re going to be taking stock of the role of women in the global workforce and also the experiences of women in the workplace. In other words, we’ll be starting with a macrolevel view on this hugely important topic before zooming in on the micro. If you’ve started to lose track of everything that’s published at this complex intersection of gender and work, this podcast is for you.

To discuss the facts, I sat down in Vancouver with Lareina Yee and Kweilin Ellingrud. Lareina is a leader in McKinsey’s High Tech Practice and is also the Firm’s chief diversity and inclusion officer. She helps to lead the Women in the Workplace research project, in partnership with LeanIn.Org and the Wall Street Journal. Now in its fifth year, Women in the Workplace 2019 published on October 15, so please do keep an eye open for it. Kweilin is a leader in McKinsey’s Operations Practice. She sits on the advisory council of the McKinsey Global Institute and helps to lead the Institute’s Power of Parity research program.

Simon London: Lareina and Kweilin, welcome to the podcast. Thanks for being here.

Kweilin Ellingrud: Thank you.

Lareina Yee: Thank you for hosting us in Vancouver.

London: You are more than welcome. We’re going to cover a lot of ground today. What I’d like to do is start with the macro, thinking about women in the workforce, the global workforce. Later on, we’ll go to the micro to think about the workplace.

Kweilin, if you think about the macro level, and you think about women in the workforce overall globally, what do we see?

Ellingrud: In terms of paid work, what we see around the world is that women generate about 40 percent of global GDP. They are concentrated more in part-time roles; they have the majority of part-time roles around the world and the minority of full-time roles. They’re also concentrated in lower-productivity sectors. They’re typically more junior in organizations, and there’s also a significant wage gap globally. In the United States about $0.80 on the $1.00 for similar work, and when you compound that for women of color that can be quite a bit lower, $0.60 or so on the $1.00.

London: Right. So, fewer women in the global workforce, tending to be congregated in lower-paid occupations. Even if they’re in the same occupation, they’re probably less senior, and even if they’re in the same level of seniority, they’re probably paid less. As an economist, why should I care about that?

Ellingrud: You should care because it’s a big economic opportunity that we’re missing, to the tune of about $12 trillion around the world. In fact, it would be about $28 trillion if we were to fully match equality in the workplace between women and men across all of those three dimensions.

London: If we got to absolute parity in terms of participation, seniority, pay, everything.

Ellingrud: That would be worth $28 trillion, which is an economy the size of the US and China added together, but it’s not realistic anytime in the near term. To account both for near-term progress and potential, but also to account for individual choice, we took a look at what would be a more realistic scenario. We looked across each region and said,“What’s the best rate of improvement we’ve empirically seen happen over the last ten years?”

London: This is country by country?

Ellingrud: Region by region, country by country. In Western Europe, improving at the same rate of Spain across the entire region. In Latin America, improving at the rate of improvement of Argentina. If we did that across each region, that gets us to about 40 percent of the opportunity, or $12 trillion. That would be like adding the UK, Japan, and Germany to the global economy, or about 11 percent of global GDP. It’s a big deal.

London: Wow. So, the global economy could be 11 percent bigger in GDP terms if we could get to that more conservative level of progress toward parity?

Ellingrud: Exactly, and it comes from three places: about 60 percent of it is from more women formally working in the workplace, another 20 percent of it is more women taking full-time roles versus part-time roles, and the last 20 percent of it is sector mix, so concentrating in different sectors.

Yee: In some ways, what we have is a challenge in front of us to say, “How do we help half of the world’s population have better access to participate in the global economy?” That’s where you see the tough challenges. The business case is an easy one.

Ellingrud: Absolutely.

Yee: Then we have to move onto the harder stuff.Simon London: Yes, and that’s the other thing: it’s easy to talk about the economy in the abstract, but the fact is that the economy is underpinned by a great deal of law, social norms, access to services, and personal security. There’s a whole range of social and legal aspects to this that underpin or then give you the outcome in the sense of workforce participation.

Yee: That’s probably one of the reasons why people feel that this is an intractable and challenging problem, in the sense that it is many things. It’s a systemic set of challenges.

Ellingrud: On a global level, it is a system. You can’t expect to capture your country’s share of the $12 trillion opportunity unless you’re going to tackle the societal barriers that hold women back from participating in the workplace.If you want that economic boost and the growth that we are talking about—which government leaders, companies, and CEOs want—then you have to be willing to tackle the societal gaps. If you plot over 100 countries on both their equality in work and their equality in society, those two things are highly correlated.

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Here is a direct link to the complete article.

Kweilin Ellingrud is a senior partner in McKinsey’s Minneapolis office, and Lareina Yee is a senior partner in the San Francisco office. Simon London, a member of McKinsey Publishing, is based in the Silicon Valley office.