“Female career discontinuity persists due to glass ceiling.”
“Korea’s GDP will grow by 6% if the country boosts its female employment.”
Experts pointed out that the Park administration has to increase the rate of women in the workforce on par with men to achieve per capita GDP of $40,000, one of its national agendas.
At the conference on ‘Womenomics,’ co-hosted by the Asan Institute for Policy Studies and Goldman Sachs, Kathy Matsui who is Co-Director of Pan Asian Investment Research for Goldman Sachs said “In 2025, Korea’s per capita GDP would have grown by 6% if the country’s female and male economic activity rates are similar.
In 1999, Matsui, also widely known as chief Japan strategist of Goldman Sachs Group, coined the term ‘womenomics’ in 1999 and advocated that Japan could increase its GDP simply by tapping the most under-utilized resource, Japanese women.
If the theory holds true, Korea’s GDP will go up by around KRW 80 trillion when women’s economic activity rate, currently 55.2%, is raised to 77.6%, men’s current level. Indeed, reports published by the OECD and IMF were a testament to the assumption. In 2012, while the OECD’s Closing the Gender Gap report estimated that Korea’s GDP will annually grow by 0.9% point, IMF predicted that the annual growth rate would be 5% and 9% for the U.S. and Japan, respectively, until 2030.
The female economic activity rate in advanced countries increased by more than 9% when their per capita GDP grew from $10,000 to $20,000. According to the Korea Labor Institute, Sweden’s female economic participation rate jumped from 69.1% to 80.1%, while the rate went from 56.7% to 70.7% in Norway and from 31.6% to 49.3% in the Netherlands.
For countries whose per capita GDP exceeds $40,000 including Norway, Denmark, Sweden, and Germany, the female economic activity rate surpasses 70% on average.
According to an official from Norway’s Ministry of Children, Equality, and Social Inclusion, whom the Women’s News interviewed last year, “Since the 1970s, Norway’s GDP has grown by more than 15% largely because of improvement in removing gender equality barriers.”
All of the above strongly suggests that the Park administration should exert effort to pursue gender equality and raise the female economic activity rate in order to achieve its national agendas: the employment rate of 70% and per capita GDP of $40,000.
During the conference, Matsui emphasized the need to look into reasons why women are quitting jobs. She mentioned that discrimination against women pushes them to resign.
“According to a survey, the burden of child care was the primary reason behind the employment discontinuity of married women in the U.S. and Germany. Meanwhile, ‘glass ceiling’ was the No.1 reason in Japan. Other reasons include job dissatisfaction, unequal opportunities for promotion, and gender wage gap. Many of these factors are caused by internal policies,” said Matsui.
She added “It is a common belief that women’s economic activity rate is inversely proportional to fertility rate. But that’s not always true. Even when more women are actively participating in the work force, fertility rates in the U.S., Sweden, the U.K., Australia, and the Netherlands are higher than that of Japan. A similar pattern was found among cities in Japan.”
She proposed that the government needs to lift relevant regulations to expand child care facilities, resolve gender wage gap, and readjust the tax system to cater to the need of married women under the goal of encouraging more women to find work and stay at work. While sharing her own experiences, she hinted that immigration policy reforms may be helpful.
“Back in Japan, I know no one, except for the Filipino nanny, to look after my children because I am from California and my husband is from Germany. If it were not for her, I would not have made it to the Conference today. In the same context, the Korean government may as well change its immigrant policies to open the country to more foreigners so that working mothers can ease their burden of either child care or house chores, expecially when they have no one close to help them.”
Womenomics has a vital role to play in the Abe administration. Matsui said “At first, Japan was not positive about promoting women’s participation. But now the government has adopted womenomics as part of its major policies. I think this is very encouraging. Nevertheless, we still have a long way to go. When the Japanese government reveals indicators for gender equality which have not been published, we would have a clearer picture of what areas need to be improved further."
Minister Cho shared Matsui’s opinions and introduced an exemplary case that encouraged women’s employment. In accordance with the government’s initiative to invite more women to stay in the workforce, SK Innovation introduced policies that aim to help address gender inequality in the workplace. As a result, it has been been certified as a 'family-friendly company.'
“I heard that one of job applicants said SK Innovation stands out among other companies, citing that the certification of ‘family-friendly company’ imprints an image that the company is not only concerned about making money, but also ensuring a decent future for its employees. Due to the certification, the competition for job openings at SK Innovation became intense, surging from 100:1 to 1000:1. It is significant for companies to make changes in the way they run their business. The first Miracle on the Han River has been possible due to men’s strenuous effort and women’s sacrifice. However, the second miracle would be facilitated, mainly, by women’s initiative,” said Cho.