Women are key to saving the U.S. economy, says Federal Reserve leader

To celebrate the 125th anniversary of women being admitted to Brown University, Janet Yellen, the first-ever woman to chair the Federal Reserve, spoke about gender as her main emphasis for the first time, sharing her views about progress for women at work and how that affects the American economy. Yellen is one of Brown’s most famous alumni.

In her Friday remarks, Yellen said women are still too underrepresented in the labor force, and when they are in the workforce, they still face “significant” earning gaps with men and prohibitive work-life balances that hold them back from career advancement.

Yellen warned that “if these obstacles persist, we will squander the potential of many of our citizens and incur a substantial loss to the productive capacity of our economy at a time when the aging of the population and weak productivity growth are already weighing on economic growth.”

‘The only real choices’ for early working women

For the early class of 1919, Brown women had limited opportunities, as Yellen pointed out: “Teaching. You could teach. You could be a lab technician. Or you could go into office work and be a secretary. Those were the only real choices,” as one 1919 female graduate noted.

Men were hostile to women taking jobs in the 19th and 20th centuries as women’s participation in the U.S. workforce increased.

Yellen showed that hostility in action with the story of Brown alumnae Margery Leonard who was told to drop out of law school by her professor. When she refused, he forced her “to recite the details of rape and seduction cases before her jeering, stomping classmates” in class.

After World War II, women were pushed out of jobs for returning soldiers. Yellen’s own family was affected by this; Yellen believed her husband’s aunt, mathematician Betty Stafford Hirschfelder, “was denied opportunities and greater success simply because she was a woman.”

Against that backdrop, Yellen, 70, said she matriculated at Brown when women were more welcomed: “I enrolled at Brown fully planning to attend graduate school and have a career, as did many of my classmates in the Class of 1967.”

Yellen slowly saw women gain rights. In 1974, women no longer had to apply for credit with a male co-signer; under the Equal Credit Opportunity Act, they gained the independence to apply under their own name.

Childcare policies need to improve

The number of women participating in the U.S. workforce has stalled. Yellen noted that the U.S. fell to 17th place out of 22 “advanced economies” in female labor participation numbers in 2010. Additionally, women are earning 17% less than men on average.

Yellen highlighted that what would fix this gender gap is more flexible work policies: “Top jobs in fields such as law and business require longer workweeks and penalize taking time off.”

The inability to take leave “disproportionately” hurts women who “bear the lion’s share of domestic and child-rearing responsibilities,” she said.