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Pay transparency is ‘the first step’ in addressing the gender wage gap: Economist

Pipeline CEO and Gender Economist Katica Roy joins Yahoo Finance Live to discuss the women and middle-aged workers missing from the workforce right now, pay transparency laws' role in addressing gender wage gaps, and inflation's impact on female consumers.

Video Transcript

SEANA SMITH: 263,000 jobs added last month, with growth the strongest in female dominated industries, like education, health services, and hospitality. And that's why women accounted for the majority of jobs added in November, making up 62%. Here to talk a little bit more about this, we want to bring in Katica Roy, Pipeline CEO and gender economist.

Katica, it's good to see you. So women making up the majority of jobs added last month. But when you take a look at the labor participation numbers, that's a bit concerning and tells a different story-- women making up the majority of the people who left the labor force. How do you square these two dynamics that are going on right now in the job market?

KATICA ROY: Yeah, you know, I think it's actually if we look across all cohorts of women and since the beginning of the pandemic, we actually have 1.8 million women missing from the labor force. And when you look at that, we could actually close, essentially, the ratio of jobs open to folks looking for a job by a quarter, if we brought those 1.8 million women back.

DAVE BRIGGS: So when we say missing, who are they? Where are they? Where have they gone? What would bring them back?

KATICA ROY: So there's two things that would bring them back. The first is a more equitable workforce. That is, beyond pay, actually, equity of opportunity. And I'll give you one example. Women are 58% of college graduates, 47% of the labor base, but yet, they make up only 8% of Fortune 500 CEOs. So we have this gap in opportunity in the labor force.

The second piece is actually equitable skilling. So we leaped forward five years in terms of digital acceleration since the beginning of the pandemic. And so the jobs that existed at the beginning don't necessarily exist today. So we need to skill, in particular, women into those jobs.

SEANA SMITH: Katica, another troubling trend-- middle-aged men, which, by definition, 35 to 44 years old, are missing from the labor market. 89.7% working or looking for work in November. That's down from 90.9% pre-pandemic. Any idea as to the factors that are causing this?

KATICA ROY: It could be skilling. That certainly could be part of it. But again, it depends on the match between the jobs and the skills that folks have.

DAVE BRIGGS: Interesting. The tech layoffs presumably have been hitting a majority of men. Is that going to be reflected in the reports ahead?

KATICA ROY: It could be. But what actually happens is that women are the last hired, first fired. So while men make up the majority of the tech sector, if you look at the numbers of women, in particular, women of color, Black women and Latinas, they are most likely to be affected in terms of the layoffs. And actually, the impact is even bigger because they make up such a small percentage of the tech labor force.

SEANA SMITH: So then, Katica--

KATICA ROY: And I'll just add one more-- oh, go ahead.

SEANA SMITH: No, no, I'm sorry to jump in there. I guess then just looking forward, though, saying that, how much worse that gap could potentially get because you still have an aggressive Fed. The Fed is saying that it's not turning. It's not stopping any time soon. The economy continuing to weaken. So 1.8 million women missing from the labor force, that's likely to climb then pretty significantly.

KATICA ROY: Yeah, absolutely. And it will continue to decline, just as we predicted that it would, when the Fed began raising rates. And so one of the things that we know is that the good-- the inflation rate for goods and services targeted toward women is actually twice that of goods and services targeted toward men. So women were actually impacted by inflation even before the Fed started raising rates. And that also impacts women because it's a credit risk to be a woman. We pay higher rates for things on mortgages and car loans.

DAVE BRIGGS: The pay transparency law, which we're seeing spread across the country, and New York the latest to add that, was thought to at least address this, in part. Has it been successful?

KATICA ROY: Well, I think it's too early to tell whether or not it's been successful. What we know about pay transparency is that it's a first step. It's not a solution, that it is not-- or it is not the solution. So it provides guardrails in terms of being more transparent about what a job pays. But what's interesting about that is there was actually a study done that showed that men actually are more likely to benefit from pay transparency than women. They actually receive about 2x the increase in salaries compared to women.

DAVE BRIGGS: The last issue I want to touch on is remote work, which really helped the participation rate of women because they could work from home, but it's starting to disappear. Offices are starting to want employees to come back to work. What will be the impact on the gender gap?

KATICA ROY: That's a great question. I think that one of the things that we saw with remote work is it certainly does help more women participate in the labor force. There is an issue in terms of whether or not there's actual equity in remote work. That is, there's a bias around being closer in to the office, and you are more likely to be promoted and receive higher performance reviews and performance ratings. So I think there's still a question on that.

DAVE BRIGGS: All right, come back once we get some data on that. Katica Roy, nice to see you. Enjoy the weekend.