The economic damage caused by the pandemic has fallen disproportionately on women. Image: REUTERS/Carlos Barria
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- Common metrics, which take account of gender and race, will stimulate global efforts necessary for inclusive capitalism to thrive.
- Taking account of gender and race within those metrics will ensure there are no blind spots.
- Machine learning and cloud computing are necessary to help companies assess progress towards their goals.
In less than 12 months, the United States lost 22 years of progress towards gender pay equity and 32 years of progress towards gender parity in the labour markets. If we don’t recuperate these losses now, we will not only face a sluggish economic recovery, we will also experience greater levels of inequity in the decades ahead.
If, for instance, the labour force participation rate among mothers persists post-COVID, the wages of US families will shrink by $64.5 billion annually. This decrease in household wages directly impacts the 28 million US children (29% of whom are Black) who rely on breadwinner moms for their economic security. Indirectly, a decrease in household wages depresses the entire economy via dampened consumer spending, increased reliance on social welfare programmes, and higher levels of poverty.
Common stakeholder capitalism metrics are critical for our economic revival
The adoption of common stakeholder capitalism metrics as proposed by the World Economic Forum in September 2020 provides one of the most promising avenues to restore the gender-imbalanced losses of the past year as well as strengthen our post COVID-19 economy.
Achieving gender equity across all races and ethnicities could expand the US economy by $2 trillion. But at current rates, we will be well into the year 2228 before achieving gender equity in the US. Now is not the time to walk back from our commitment to gender equity. If anything, we must be all the more diligent in pursuit of it.
The common stakeholder capitalism metrics are a step in the right direction for our economic future because they stimulate corporate, regulatory, and global efforts necessary for a more inclusive and equitable form of capitalism to thrive.
To take these common metrics a step further, companies will need to:
1. Integrate them with intersectional data to avoid creating blind spots, and
2. Use advanced technologies such as AI and cloud computing to implement their commitments to stakeholder capitalism
Considering how, in the span of eight weeks, the pandemic accelerated digital adoption by five years, now is the opportune moment to implement these changes in pursuit of equity for all.
Why intersectional data is critical to achieving stakeholder capitalism
In the time between the publication of the stakeholder-centric Davos Manifesto 2020 and now, we’ve witnessed the destruction wreaked by a global pandemic that’s fallen disproportionately on the shoulders of women. There are few signs of it relenting.
During this same time, as the pandemic and its related fallout spreads across the globe, Brian Moynihan, CEO of Bank of America, was working with the big four accounting firms in partnership with the World Economic Forum to decide how to measure stakeholder capitalism. If organizations no longer exist to maximize shareholder value, then traditional financial reporting will not suffice to assess corporate progress. We need updated metrics to tell us how successful companies are (or aren’t) at creating long-term prosperity for all their stakeholders.
Moynihan’s work resulted in a comprehensive framework for measuring stakeholder capitalism that includes metrics for diversity and inclusion, pay equality, and wage levels. It is a historic first step, and we must not stop there. Next, we need to apply an intersectional lens (gender plus race/ethnicity) to the metrics. Because if we view the common metrics through a singular lens – either gender or race/ethnicity – then black, indigenous, and other women of color (BIPOC) become invisible.
For example, by August of 2020, white women had recovered 61% of jobs lost in 2020. Black women, however, had recovered only 39% of jobs. Had we not disaggregated this data by gender and race/ethnicity, we wouldn’t have seen this disparity. As such, we wouldn’t have had an accurate representation of how the business community and economy at large is working for different segments of the population. It’s not enough to disaggregate data by gender only or by race and ethnicity only. Doing so makes blind spots out of BIPOC women – who, by the way, have been earning much less than their white female counterparts for years now.
A commitment to common metrics is the first step, implementing them is the second
Committing to an intersectional common metrics framework is one task. Implementing the commitment into business strategy is another. To make good on commitments to stakeholder capitalism, companies must embrace the arrival of the Fourth Industrial Revolution. Advanced technologies such as machine learning and cloud computing are necessary to help companies ascertain progress towards their goals.
What's the World Economic Forum doing about the gender gap?
Not only can tech-driven solutions collect, organize, and analyze vast amounts of intersectional data across an entire organization, they can also detect and mitigate biases that inevitably affect the wellbeing of their employee stakeholders. Companies make three key talent decisions every year: how much will we pay people, how will we evaluate their performance, and how will we determine their potential? For the average Fortune 500 company with 60,000 employees, that’s 180,000 opportunities to move towards stakeholder capitalism every year. Advanced technologies can ensure each of those 180,000 decisions is both an equitable decision and one made in the company’s best interest.
Towards a more equitable form of capitalism
The Davos Dialogues launch early this year. My ask is that when key global leaders share their views on the state of the economy in 2021, they ensure it’s through an intersectional gender equity lens. It’s no longer optional to report on stakeholder capitalism metrics, it’s required for our economic recovery. This is our moment to be bold, to build back better, and to embrace the Great Reset as a catalyst to bend the arc of history towards inclusion.
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The views expressed in this article are those of the author alone and not the World Economic Forum.
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