A recent, interesting news report tells how European banking and asset management associations are making efforts to shorten the trading day.
“Compressed market opening times,” to use the wording in the press release, should, these bodies claim, enable their member firms to recruit and retain more women traders.
As it is now, the area is male dominated in the extreme, largely, the banking and asset management associations surmise, because the time demands of the job interfere with other obligations, especially child care, which even these days still fall most heavily to women.
The impetus behind this new effort by the bankers and asset managers might seem like a straightforward desire to promote equality. No doubt that desire, though certainly also genuine, has gained intensity from criticisms leveled by women’s groups.
Also at work here are more fundamental, demographic pressures. Decades of low birth rates in the developed world, especially in Europe, have slowed the flow of young men and women into the workforce.
A relative shortage of workers has emerged, especially in those areas where immigrants are less likely to have the necessary skill set, areas such as trading.
Employers can see that their access to a once-ample supply of young men has become constrained, creating a much greater openness to women than in the past.
To secure those potential women traders, these employers have also acquired a new willingness to change the way they do things. Since trading is not the only area of life that will feel this demographic pressure, what is happening there now in European trading will become increasingly commonplace throughout developed economies.
The demographic pressure with which Europe, the United States, and Japan will increasingly have to cope has built up for a long time. Birth rates began to drop in the 1960s, slowing the flow of young entrants into the workforce by the 1980s.
Since birth rates continued to decline after the initial 1960s drop, that relative shortage has become acute. In Germany, for instance, the average woman in the 1960s gave birth to some 2 children during her lifetime.
In Japan, that figure was slightly higher, about 2.3 children, and in the United States, it averaged just below 3. By 1980, the German figure had dropped to 1.5.
By 2015, the latest year for which complete data are available, birthrates were even lower. Women in Germany and Japan averaged less than 1.3 births in their lifetime. The United States was higher, at about 2.0, but that was still barely at replacement.
The consequences of this ever-shallower flow of young people are evident in the relative proportion of working-aged people in these populations.
In 1960s, some 67% of the German population fell into prime working ages of 25 – 55. By 1980, that figure had fallen to 66%, and by 2015, it had dropped below 66%.
These seem like small changes but each percent in Germany amounts to hundreds of thousands of potential workers. In Japan, the demographics have reached extremes.
At last count, those in prime working age had dropped from over 67% of the population in 1960 to 64%. Since Japan has a larger population than Germany, this difference amounts to some 4 million potential workers.
Things are slightly better in the United States, where the proportion of the population of prime working age has held at some 67% but only because the proportion still in school has dropped so precipitously, hardly a good omen for the future flow of workers.
Figures for the U.K. and France, Italy and Spain, if not precisely the same, show the same trends. It is noteworthy, too, that these proportions include the full effect of immigration.
Bringing more women into paid employment has the greatest promise to alleviate the shortage of working-aged people. According to recent figures, women participant in paid employment at rates substantially below those of men.
In the United States, for instance, where women’s participation is generally higher than in the rest of the developed world, the difference nonetheless remains significant.
For the prime working age cohort — ages 25-55 — the Labor Department estimates that some 75% of women either work outside the home or actively seek such work.
The figure for men of that age bracket rises above 90%. If this economy and other developed economies, where the gender gap is even wider, could bring women’s participation just half way to men’s, the developing labor shortage would ease significantly. For the United States, such a move would mean about 5 million more ready to work.
Some of that effort will struggle with cultural legacies, especially in Japan. Otherwise, a good part of the participation difference would disappear, if the economy could address child care matters.
Because women carry most of the childcare burdens in this society, many women cannot even consider paid employment unless they can command pay substantially above the sometimes-steep cost of professional childcare.
Since the demographics make clear that the labor shortage will become more acute, economies – companies and governments – will increasingly have to accommodate these needs, as the European banking and asset management associations are considering.
The imagination of managements in need is always wonderful to behold. This little article can make no pretense of covering the gamut of possible measures that will doubtless emerge over the next 5 to 20 years.
Some seem obvious. A push for affordable, quality childcare seems inevitable. In this, universal licensing might help as well as subsidies, either to the childcare providers or through tax concessions to consumers of their services.
Concessions on working from home will become more commonplace, as will adjustable working hours so that parents can deliver children to childcare and/or school and retrieve them.
Nor is it hard to envision changes in law that allow parents to enroll their children in schools near work instead of near their homes. Some firms, in order to attract needed employees, may even support such schools.
Firms, at least those in suburban and rural settings, may well also lure employees by building on site childcare facilities, especially for after school. Several firms have already done so, under pressure from feminists but more to ensure that employees show up when school holidays fall on days that are not work holidays.
Some might see these possibilities as far fetched, others as overdue. The clash between some feminists and some traditionalists is, however, not at issue here.
The issue here revolves around the unavoidable imperatives of demographic trends that date back for decades. They, more than any culture clash, will dictate how businesses and government, society generally, will adjust in coming years and decades. The kinds of measures recently floated in Europe are only the beginning