Womenomics for growth
A dilemma for both working moms and dads in a juggle between career and childcare
As South Korea’s growth outlook gets dimmer, as recently slashed by the OECD to 4 percent for 2013, the age-old issue of a gender gap in the workforce has regained attention as a hopeful area left for economic boost.
The biggest room for improvement lies on the inclusion of both working moms and dads in the ever-lasting juggle between work and childcare, experts say.
Costs of gender gap
Korea excels in gender equality in education — in fact, the number of female students admitted to Seoul National University surpassed male counterparts in 2010, as it is the case for most top Korean schools.
However, the country’s gender employment gap in the real world hits bottom among OECD countries: Only 62 percent of Korean women aged from 25 to 54 participate in the economy, the fourth lowest in the OECD, as opposed to more than 90 percent for men; and women earned 39 percent less than men on average, the agency figure showed.
The underrepresentation of women gets worse as it goes up the income ladder, mainly because those highly educated group of women struggle with returning to work after childbirth.
“Maybe the number of women in the labor markets has increased but their work-family dilemma remains the same as 20 years ago,” said Jung Ji-hye, a senior researcher at LG Economic Research Institute (LGERI). The significantly low job retention rate among women in their 30s stands out in Korea and Japan in the East Asian region as well as the Western countries.
As the gender gap has been a universal issue, the economic benefits measured in numeric terms have come out in the past.
Correlation between gender diversity in companies’ top management and the bottom line has been shown by various investment and research firms including Goldman Sachs, McKinsey Global Institute and Catalyst.
For instance, companies with three or more women as board directors had higher returns on equity , sales and capitals by more than 10 percent, according to a Catalyst survey among the Fortune 500 companies.
Kathy Matsui with Goldman Sachs in Japan estimated that closing gender gap would bump the country’s GDP by as much as 15 percent in 2010 by adding 8.2 million to the labor market.
For long, firms have “cautiously” claimed that they cannot ignore the cost factor when offering benefits to working parents such as flexible hours and longer parental leave, so pushing further in that direction has been slow.
But the indirect cost from losing talent, on the flip side, is a growing factor that companies cannot overlook anymore, Jung said.
“As the median age of marriage and childbirth for women is getting older to the early- and mid-30s, the cost for companies from losing the specific group of talent has grown larger, especially when they must have invested in them for almost 10 years,” she said.
One of the ingrained problems is that childcare responsibilities mostly fall on working moms both in terms of government policy as well as cultural acceptance.
Low paternity leave practiced in reality is an example.
The competitive work culture among men hampers them from taking vacation, said Andrew Barbour, a 37-year-old lawyer for Hyundai Corporation in Seoul.
Barbour, with a working wife and two children — Phillip, 5, and Sabine, 4 — took a week of paternity leave when Sabine was born, which was later taken off from his vacation days.
The situation is harsh for other fulltime workers who has taken off two or three days at best when they became newly dads.
Consequently, the burden falls more heavily on women in juggling between work and family.
“One of my female teammates is doing just that, so it’s definitely possible but she’s still the exception rather than the rule,” Barbour said, in a phone interview.
Under the current law, Korean working moms and dads can take parental leave of up to a year and receive a monthly compensation of up to 1 million won or about $850.
But out of some 42,000 workers on parental leave, only 819 men took paternal leave in 2010, according to the Ministry of Employment and labor.
Some experts point that the government’s assistance such as the “motherhood protection policy” is already discriminatory against women by addressing the childcare issue only focusing on moms.
The program offers a number of days off for sick leave or flexible working hours for women who came back from childbirth within a year.
“It ignore the reality that both mom and dad should carry the child-rearing responsibilities, instead it appears as if it’s a special benefit for women,” Jung with LGERI said.
Even that often ends up empty promises in the long-hour working environment in Korea.
OECD statistics show that over 72 percent of Korean working moms spend more than 40 hours a week at work, in 2010.
This is drastically high compared to 6.5 percent in Denmark and 11.4 percent in the Netherlands, according to Byun Yang-gyu, a director of macroeconomic policy research at Korea Economic Research Institute, in a column.
“Basically, what these statistics show is that female workers are forced to choose either to work long hours or not to work at all,” Byun said.
“This rigidity of working hours drives many female workers out of labor market.”
At a macro level, economists point to a gradual change as Korea’s big companies and financial institutions have become global and open their services to foreign competition, they conform to international standards and mentalities.
“Because of structural rigidity in the labor market, change has been slow to come but it is happening,” said Wai Ho Leong, an analyst at Barclays Capital in Singapore, who tracks the Korean economy, in a phone interview.
As large companies start to embrace foreign business friendly practices such as flexible management and performance-based evaluation, the benefits will trickle down to small corporate sectors, he said.
Leong projected that Korea will likely maintain a potential growth rate of 4.4 percent up until 2020.
womenomics : women + economics
workforce : n. 노동력 (forces : 세력)
excel : v. 을 능가하다 (= exceed, surpass, outdo)
underrepresent : v. ~을 실제보다 적게 표시하다
the number of A : A의 수(단수취급) (cf: a number of A : 여러(많은) A(북수취급)
retention : n. 보유, 보존, 유지
term : 여러 의미가 있다. 용어, 항, 측면, 학기, 조건 등(ex : middle term : 중간항)
board director : 이사회
equity : n. 공평, 공정, 지분
in that : ~ 라는 점에서
overlook : v. 간과하다, ~을 조사하다
one of 복수명사 + 단수동사
newly : 최근에, 새로이(=anew)
just : ‘틀림없이, 꼭’이라는 의미로만 알고 있음 안된다.
(ex :It’s just 10 o’clock and we are already hungry : 이제 겨우 10시밖에 안되었는데 벌써 배고프다)
discriminatory : a. 차별적인, 차별 대우의 (= discriminative)
rigidity : n. 단단함, 경직, 엄격
By Kang Ye-won
Published : May 25, 2012< Copyright © The Gachon Herald All rights reserved >
Source : The Korea Times