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How to boost GDP 10% in a year, without breaking a sweat

25 February 2012

Equal pay for the same work between men and women in South Africa would boost Gross Domestic Product by at least ten percent, new figures from the United Nations indicate.

And the World Economic Forum, calling for a quick fix solution to global economic collapse says: "We are rapidly moving from capitalism to "talentism". In such a world, gender parity can no longer be treated as superfluous. Women make up a half of potential human capital. The efficient use of this talent pool is a key driver of competitiveness."

Liza van Wyk, CEO of AstroTech Training, a national management training group based in Johannesburg said, "Companies and government are scrabbling after endlessly failing solutions when one of the easiest is right in front of us." And eliminating pay disparity does not require significant investments, the OECD and United Nations estimate that it would be 16% to 17% in South Africa– those gaps get bigger at lower and higher levels of the employment scale, with men in top positions earning around 21% more than women.

Van Wyk quoted new figures from UN Women ahead of International Women's Day on March 8 which says: "It is estimated that if women's paid employment rates were raised to the same level as men's, America's GDP would be 9% higher; the Euro-zone's would be 13% higher, and Japan's would be boosted by 16%. In South Africa where women form 54% of the working population, but also more than half of the nation's poor, a boost to women's earning power would give a turbo-boost to the economy."

In the UN's "gender-related development index" South Africa is ranked a poor 129th out of 182.

Global consulting group McKinsey says that "although 80 percent of CEOs say they are committed to gender diversity, that commitment does not show in staffing, and half the women McKinsey interviewed in major roles in Fortune 200 companies were primary caregivers and primary breadwinners, no man assumed both roles. (In SA women spend twice as much time caring for children than men do, according to the OECD.) Women's advancement is often stymied by the decisions male bosses assume for her, one company had a woman successfully running their Asia operations but did not consider formally employing her in the position because she was pregnant and they made the assumption that she would not want to take the job."

Van Wyk, McKinsey, the United Nations, and World Economic Forum said research proves that women who earn more tend to invest it. "Women are careful with savings and investments. If they have children, they'll tend to invest in better education for their offspring, a home and big ticket items for the home, all of which tend to boost the manufacturing and financial services industries, and with it, job creation. But an economy that has more women unemployed or earning low wages stagnates and then declines. We're starting to see that in South Africa."

Van Wyk said, "women also tend to be loyal to employers that pay more"

"Although government has done many things that have advanced women's rights, for example, 44% of parliamentarians are women, and 41% of cabinet posts are held by women, this has not translated into gains for ordinary women. Here women are more likely to be unemployed, paid less than men, and struggle with poverty.

"The Women's Business Association says that a fifth of the country's private-sector boards have no women (and that only 10% of chief executives and board chairmen are women).

"And women's progress is disabled through threats to their physical safety – and this is not just an issue for government, business needs to find ways to fund actions that prosecute perpetrators. It is not enough to assist women once harm has occurred; the focus has to be on prevention. Human Rights Watch, a New York-based lobby, describes the level of physical and sexual violence against South African women as "shockingly high."

The OECD says that although girls tend to outperform boys in schools, and enter the workforce better qualified than men, they are earning 10% less by the time they're 30 years old. "It's a disparity that over the long term eats into economic success, South Africa has performed well on so many indicators for women, it would be good if we could lead the world – and economic regeneration, by taking small steps to parity that would reap giant economic rewards," Van Wyk said.

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