Investing in Women is Investing in the Economy

Ignoring the financial value of women on our economy has influenced the continuing viewpoint by certain individuals that women do not have a large enough voice in the purchasing decisions and availability of the wallet of a household , that women do not contribute as much as men and therefore should not be paid as much as men and that women can not be as strategic and influential as men in leadership roles. However, there is clear evidence that this viewpoint is based on faulty rationale.

Close-up of woman hand holding credit card in payment terminal

Woman Drive Purchasing Decisions

Women drive 80% of the purchases in the United States and 70% of purchase decisions by consumers in the European Union based on a study conducted by Lois Joy, Nancy Carter, Harvey M. Wagner, and Sriram Narayanan. If women are driving these financial decisions,this would led to a hypotheses that if women were paid more for their equal contributions that more money would flow back into the economy. This is further supported by studies and the results of micro lender to women, Opportunity International, whose CEO, Vicki Escarra has stated, “More than their male counterparts, women have proven to be great credit risks for lenders. Of the more than $515 million in our loan portfolio the repayment rate is at a healthy 98%”. This is largely in part because women grow businesses to invest back into their families and their communities.

Woman on Boards Drive Financial Health

Adding further weight to this data, there have been numerous studies that have proven diversity on boards is critical to a company’s sustained performance and higher returns. The “Mining the Metrics of Board Diversity” study by Thomson Reuters in July 2013, found that companies with no women on their boards underperformed, on average, relative to gender-diverse boards. In fact, when Fortune-500 companies were ranked by the number of women directors on their boards, those in the highest quartile in 2009 reported a 42% greater return on sales and a 53% higher return on equity than the rest. The financial return of a diverse board was further validated in a separate study where an analysis of FTSE-listed boards found that operational performance and share prices were both higher in the case of companies where women made up over 20% of board members than those with lower female representation.

Women make up approximately 50% of the population and depending on the area of study women can graduate at higher rates than men from universities. The market reality is that our labor markets are becoming constrained with insufficient labor to meet market demands as the current workforce ages and retires. Companies can significantly increase their recruiting pool by attracting more women to their ranks through greater pay and growth opportunities..

The data is clear, woman matter.