Women are gaining economic wealth at an explosive rate, but the number of women gaining this economic growth are highly fragmented, very complicated and have significant structural barriers that require urgent action.
Currently, women in total control of approximately $42 trillion in global wealth, but the total amount of wealth women control is expected to explode to $72 trillion by 2026 (approximately 32% of total global wealth).
The significant contributors to this increase will be education and work (approx 50% of female graduates internationally) and work (approx 47% of advanced economics); yet, the reality is that economic prosperity for women continues to suffer from historical barriers related to unequal pay, access to capital and legal rights.
Internationally, on average, women earn 20% less than men; however, in some regions (particularly South Asia and Sub-Saharan Africa), the female wage gap exceeds 40%.
The compensation disparity women experience causes limited ability to save and/or accumulate wealth and to invest in assets. In addition to the above barriers, the majority of women remain financially excluded from banks and/or financial institutions (58% of women vs. 65% of men have access to formal financial services globally), particularly those residing in the Middle East and North Africa.
Women in the Middle East and North Africa comprise only 30% of all bank account owners compared to 70% who are men. Without credit and/or financial products, women are severely hindered from establishing themselves as business entrepreneurs and creating wealth through the establishment of business enterprises.
Internationally, women own approximately 42% of all small and medium-sized enterprises (SME's).The Growth of Women-Owned Businesses
The number of women starting businesses has risen dramatically in recent years. However, women make up only about 10% of the total amount of venture capital funding available globally. This presents a serious challenge to the scalability and innovation of female entrepreneurs.
For example, in the United States, women make up 40% of all new businesses, but they only receive approximately 3% of the total amount of venture capital available.
This disparity has stifled the overall dynamism of the economy and has continued to perpetuate the gender wealth gap.
The Social Impact of Women Having Wealth
The social impact of women's wealth in communities is tremendous. Studies indicate that when women control the income for their families, they invest an average of 90%-95% of their income into their families and communities; conversely, men invest only 30%-40% of their income into their families and communities.
Therefore, the social impact of women having wealth is measurable in the communities where women control the income of their household. For example, in households where women control the household finances, child mortality is approximately 30% less than for households where men control the household finances, and there are higher rates of enrolment of children in schools.
The social impact of women having wealth is also observable in Rwanda, as women hold 64% of the parliamentary seats in the Rwandan government through the representation of women.
As a result of this political representation, there has been a 50% reduction in the overall rate of malnutrition in children over the past 20 years, and there is nearly universal primary school education for children.
The absence of women in political office, that would otherwise have a meaningful impact upon economic equity, is still a significant issue.
Women hold only 26% of the total number of seats in parliaments worldwide, which prevents women from having a meaningful voice in public policy that could otherwise advance economic equity in their countries.
While social or legal barriers to women's economic empowerment exist in every country, there are more than 90 countries where women are prohibited from owning property or inheriting property or from entering into a contract without a male's permission. In fact, less than 50% of women in South Asia possess any legal rights to inherit property, thus limiting their potential to create wealth.
When developmentally-oriented women are legally disempowered, they will have limited opportunities to earn an income and build wealth. They become trapped in a cycle of poverty.
Structural biases socially, culturally, and economically have placed significant limitations on women's wealth and have severely restricted women's growth potentials in the economy.
For example, there are many examples of women creating value in the economy, yet that value often goes unrecognized and/or unpaid. Examples of women's unrecognized and unpaid work include caregiving.
Accordingly, women's complete economic contribution, and therefore their complete potential to generate wealth, is largely obscured. If the structural obstacles preventing women from creating wealth continue, women will not be able to generate to their complete potential.
A comprehensive approach to addressing the gender wealth gap is necessary: expand access to capital and credit for women, amend and repeal discriminatory laws against women, increase the percentage of women in high-paying industries; additionally, invest in educational and leadership opportunities for women.
Only then will the projected increase of $28 trillion in women's wealth by 2026 result in true economic and social transformation for women and their families.
Growing the economic contribution of women is more than just about statistics; it is a catalyst for change that could redefine the meaning of wealth and prosperity on a global scale. Without addressing systemic inequities, the wealth created by women will be squandered.
The direction and advancement of the global community will depend primarily on how we collectively choose to create and optimise women's economic empowerment.
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