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Gender: The gap is shrinking in ranks and salaries, a marked improvement

There is “far too much of a gap between male and female employment and wages,” said Italy’s President, Sergio Mattarella, on 8 March. A gap of 20%. A discrimination that must, of course, be eliminated. But also a waste: a poor use of human capital with a significant cause and effect on innovation, stunting economic growth and slowing down meaningful economic and social development. Nobel-winning economist Gary Becker was adamant that it’s not worthwhile to discriminate (a lesson often mentioned in this blog). And the “gender gap” in terms of employment, roles, responsibilities, and salaries confirms the “economic stupidity” of those who insist on rewarding gender (or religion, culture, skin colour, etc.) rather than merit.

Italy is in good and bad company. The 2016 Gender Gap Report published by Job Pricing, including Eurostat data (IlSole24Ore 2 March), says that women earn an average 3,000 euros less a year than men doing the same job, with the same grade and education. The gap rises to 11,000 euros for management positions. Basically, women earn 10% less than men.

Italy ranks eighth for gender gap among the 31 European states covered by Eurostat data. Not too bad considering France is 18th and Germany is 28th. The gap is there, but it’s shrinking. Let’s say we’ve made some progress towards equality, but also that much remains to be done. This is confirmed by the IlSole24Ore-Fondazione Hume report (published on 8 March), which argues that “the resilience of women makes them winners in the recession but for occupational equality is still lagging behind” and that “the economic decline has had less impact than on men, but the knotty issues are constant: salary and family gap”.

On closer scrutiny, we can see that there are also more women in top management roles but nowhere near enough. The 316 companies listed at Piazza Affari [the Milan Stock Exchange] have 23.7% female presence on their boards (also thanks to the Golfo-Mosca Act), but there are less than 7% women presidents and CEOs. “Women are still not a change factor,” comments IlSole24Ore. Nor are their skills used properly in enhancing competitiveness and business culture to superior levels.

Nonetheless, there are sectors where things fare a little better. A glance at the pharmaceutical industry shows that 43% of employees are women, but that there are also 43% of women in executive and management roles (double the percentage of other industrial sectors). Pharmaceuticals are one of Italy’s best industries. So the smaller gender gap basically weighs in positively.

A recent survey by the International Monetary Fund confirms that the role of women in business is a positive-performance accelerator in terms of turnover and profits, as Danilo Taino wrote for Corriere della Sera on 13 March: “the arrival of women in the upper echelons increases profitability more in industries with a bigger female workforce, in hi-tech and very creative businesses. For instance, there’s a 5.2% growth of EBIT in services, 2.7% in manufacturing, 1.2% in trade, and a 2.2% EBIT drop in the construction industry. The analysis is of females in top roles, not women who arrived at top positions thanks to legal imposition, and hence cannot be applied to interpreting effects on the so-called ‘pink percentages’.” Talent and skill are being rewarded and the fallout is positive for the economy. Gary Becker got it right again.