This article was published on September 14, 2017

Supporting working women: single most impactful way to boost the economy

Supporting working women: single most impactful way to boost the economy
George Beall
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George Beall

If the United States is going to stay competitive in the global economy, we need everyone who wants to work working, including working mothers. Workforce participation is at critical low levels, and unless we do everything we can to keep women in the workforce our economy won’t be able to remain competitive with other industrialized nations.

Understanding the needs of and supporting working mothers and families as well as professional women who may not even be thinking about motherhood can help keep more people in the workforce who want to be there, thereby ensuring the U.S.’s continued competitiveness in the global economy.

Why is workforce participation so important?

There are three major factors that make workforce participation crucial to the economy:

  • When fewer people participate in the workforce it slows economic growth
  • Fewer workers means less tax revenue, straining an already strained system
  • Time out of the workforce hurts future potential earnings, which also strains the economy and the tax base

How do parental leave and childcare policies help keep women in the workforce?

Many women leave the workforce to become parents, only to return after a few years to start over at the bottom. Many of these women take a look at the cost of childcare and maternity leave and realize it doesn’t make financial sense to keep working. These are willing participants in the workforce who are being pushed out by lack of paid parental leave and childcare policies.

According to Forbes:

  • Between 1990 and 2014, female workforce participation in the United States dropped from 6th place in OECD countries to 22nd of 24 countries
  • 28% of the decline was attributed to lack of family-friendly workplace policies
  • Half of the earnings gap women experience can be made up for with parental leave and childcare policies
  • In the United States childcare accounts for the single largest household expense in many regions, which leads to decline in workforce participation
  • The United States is the only developed country without a universal paid parental leave policy
  • Women achieve higher rates of workforce participation when there are paid leave opportunities

Unfortunately women’s workforce participation is trailing off when it should be growing. Compared to other wealthy nations women are not being supported in the workforce and are even being punished for having children, which is leading to a decline in the overall economy.

Paid family leave is good for the economy and spurs economic growth

According to a study by the CATO institute:

  • Paid leave strengthens the workforce by allowing workers who would otherwise leave jobs to do caretaking duties to stay in the same job
  • Paid leave correlates positively with employment-to-population ratios
  • 87% of California businesses who participated in a state family leave policy said the program did not result in cost increases
  • Paid leave policies reduce worker turnover, which can cost an average of 21% of a worker’s salary
  • Paid leave prevents people who want to work from having to use public assistance
  • Paid leave provides children with a more stable and solid foundation in life

Supporting working mothers is the next step

Working mothers make up a third of working women in the United States. Because of issues with work/life balance and a job market that has yet to respond to their changing needs, women are twice as likely as men to work only part time.

Supporting working mothers is key to ensuring they are able to participate in the workforce as fully as they would like to. In addition to providing paid leave policies to help women stay in the workforce after recovering from birth and lowering the cost of childcare so it doesn’t prevent them from participating in the workforce, there are other areas that can help women stay in the workforce longer.

Flexible work schedules and flexible workplace policies can help women achieve the balance between work life and home life that a traditional nine to five job with traditional constraints can’t do. The flexibility to work at home can mean moms can get more done in a day when time is saved on commutes, while the flexibility to change schedules around to meet family needs can ease the strain of balancing family needs against career requirements.

Additionally, supporting new mothers when they return from maternity leave is crucial to keeping more of them in the workforce if that’s where they want to be. Offering the flexibility to reduce hours upon return can eliminate anxiety about sleeplessness and childcare. Just as important is supporting breastfeeding mothers who will need to pump during the work day to keep up supply for their infants.

Federal law protects the rights of breastfeeding mothers to pump in a clean non bathroom space with a locking door for up to one year after the birth of a child, but this law only covers employees of companies with more than 50 employees. However, extending this support of working mothers to all employees can help reduce problems working mothers face upon returning to work.

Keeping all people who want to be in the workforce there is crucial if the United States is going to remain competitive in the global economy, and supporting working families is the single most impactful way to do it.

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