Judith Warner
Early this year, a team of distinguished economists, current and former government ministers, academics, labor leaders, and opinion makers gathered at the Mayflower Hotel in Washington, D.C., to announce an ambitious plan to create “inclusive prosperity” on a transnational scale. The experts—led by former U.S. Secretary of the Treasury Lawrence H. Summers and Britain’s then-Shadow Chancellor of the Exchequer Ed Balls—spoke about new investments in infrastructure, raising wages, and more progressive taxation. They also highlighted a time-tested approach that is too often omitted from mainstream economic debate: maximizing the earnings power of women.
The Scandinavian nations have largely managed to avoid the “toxic cocktail” of “growing inequality” that is now poisoning social and economic life in much of Europe and the United States, said Pär Nuder, Sweden’s former minister of finance. A key reason for this success, he said, is that “we have, contrary to many other countries in Europe and elsewhere, mobilized the whole work force. Not only the male part but also women.”
Nuder conveyed a truth that has been proven time and again in studies around the globe: Women’s employment is key not only to a nation’s economic growth but also as a powerful countervailing force to the contemporary scourge of income inequality.
Since the 1980s, household income inequality has increased in nearly all advanced industrialized countries. The rate and extent of that increase, however, has varied among nations due to a variety of social, economic, and political factors. Among the most important of these is women’s work, which is supported in many countries through generous paid leave, child care, and flexible scheduling policies. A 2013 European Commission policy brief stated this categorically: “It has been shown that ‘women-friendly’ reconciliation policies play a major role in facilitating work-life balance for female second earners in households, thus increasing household income and countering inequality.”
The dual awareness that women’s work serves as an income equalizer among households and that family-friendly policies, by extension, are essential tools in fighting income inequality has been slow to take root on this side of the Atlantic. In recent years, it instead has been fashionable in the United States to point to studies showing that women’s work has actually worsened income inequality. That conversation has focused on “assortative mating”—the practice of people marrying others like them, in this case, others with a similar education level—to argue that the widespread movement of women into the workplace since the 1970s has brought high-earning men and women together into even more high-earning households in an entirely new way.
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