A conversation with the co-founder of the Age Wave demographics think tank.
Maddy Dychtwald: I’m Maddy Dychtwald and I’m an author of a book called "Influence: How Women’s Soaring Economic Power Will Transform Our World for the Better." I’m also cofounder of a company called Age Wave, which is a think tank focused on the future trends that pertain to demographics.
Question: Why do women have so much more economic influence now than they used to?
Maddy Dychtwald: Well if you think about it for a minute you’d really begin to realize that for thousands of years women were really economically dependent on men and that is just the way it was. I mean in fact, if my grandmother or great grandmother were alive today she just wouldn’t even believe the way the world works and the way women have really gained economic power. I think if you go back to the 1960s, you begin to see the early signs of that because baby boomer women were the first generation en masse to get that education and education was really the key for women succeeding in the workplace—not just entering the workplace, but staying in the workplace and getting really some pretty good earning power. Back then, very few women prior to the baby boom generation had that opportunity, but this generation went in there, made it happen and education really has been sort of at the heart of what's allowed women to really gain that economic power that has transformed their role in society for now and well into the future.
Question: What has changed?
Maddy Dychtwald: What is so interesting to me is that while women were gaining their education for the very first time in history we saw our economy transform itself pretty dramatically. We went from an economy that was industrial, manufacturing-based, where brawn really defined your role and gave you the power to really earn income, to a more knowledge-based economy where the skill set was more education based. So women got that education at exactly the right moment in history that allowed them to really succeed in the workplace. Today for the very first time we see a critical mass of women entering the workforce with that education and gaining earning power. In fact, what is so incredible is that if you were to look over the last 30 years what you would notice is that men’s income has remained rather flat if you adjust for inflation, whereas women's income has grown exponentially. Now of course some of that is just trying to catch up and we’re still not all the way there. There is still a lot of work to be done, but women have gained incredible, incredible power, economically and they’re beginning to take that power and translate it into all kinds of interesting ways of doing things different than the way men have.
Question: What are some of those ways?
Maddy Dychtwald: What we begin to understand as we see large numbers of women with earning power is that women in fact do use their money differently than men. In fact, it’s been noted even in developing countries that 90% of women take their income and they reinvest it in their families and their communities while in those same developing nations only about 30% to 70% of men take that money and reinvest it in families and communities. They have a tendency to spend it on alcohol and tobacco. So you know it doesn’t sound really great on the surface, but that is just really the truth in developing countries. But even in the United States what we notice is that women have a tendency to spend their money more on their family and more on education, on health and on things that really make life for families a little bit better. That is good news
Question: What does the increased economic influence of women mean for the economy?
Maddy Dychtwald: One of the great pieces of news that we’ve seen actually manifest itself as we see more women in the workforce, more women taking on positions of leadership, is that there is an actual economic benefit to companies, to countries, to the economy at large. For instance, based on studies that have been done what we’ve noticed is that when Fortune 500 companies have more women in positions of leadership their profitability actually increases. And when we’re talking about board of directors, for Fortune 500 companies in particular, having at least three women on their board of directors sees increased profitability. That is good news. What else do we see? We see in countries, developing countries when they educate their young women and girls they see an increase in GDP, so there is a bottom line return. We see more countries doing that as a result. Again, great news and according to The Economist the number one thing that we have seen actually improve our economy over the last decade has been women in the workforce and not the economy of China or India and not the growth of technology. It’s women in the workforce. This is great news.
Question: How will this change marketing?
Maddy Dychtwald: It comes as no surprise to anyone that women buy things. They always have. in fact, throughout most of history even though women weren’t economically very independent they were generally sort of the chief family and household purchaser of household things, clothing, food, the small items. And the big items like automobiles and financial service products, insurance, real estate, those were considered the sort of decision domain of men and that is just not the case anymore.
In fact, 83% of all consumer purchases today are made by women and women in fact do have a large say, if not the final say, in most large decisions today in terms of the marketplace and marketers tend to forget that. They still tend to think automobiles let me talk to the guy. Real estate let me talk to the guy. Yet using real estate as an example when we’re talking about who buys residential homes right behind married couples is single women, the second largest segment of purchasers of real estate today. Now that is influence. Yet the real estate marketplace, even though there are so many realtors who are women, doesn’t generally do their marketing and their advertising campaigns to women per se. The automobile industry for instance where women buy 62% of all new car purchases they are notorious for doing a horrible job of speaking out to women. If anything, they give just kind of lip service or what we call "pink marketing" to women and that is going to have to change. In fact, we’re seeing the early signs of that changing right now. Electronics, another great example. We used to think of electronics as you know "toys for boys." Not anymore, 55% of all electronic purchases are made for women, so women have a seat at the table. Marketers if they want to hold onto women as these key customers are going to have to try to dig deep, figure out what women really want because most women say they feel very misunderstood by the marketplace.
Question: Where does increased female economic power leave men?
Maddy Dychtwald: I think this is good news for men and good news for women for a couple of reasons. First, improved profitability in companies, increased GDP in countries and an improved overall economy—well that is good news for everybody.
Second, that idea that gender should be the number one thing that defines our roles in society seems a little ludicrous and sort of old school, and many men have told me and I’ve interviewed a lot of men over the last several years about this very issue. They’ve told me they love the idea that no longer are they defined completely in their role in society by being a guy. I mean there is lots of men that feel that their skill set or their talent is much more relevant to maybe being a stay-at-home dad or maybe having sort of a part-time or a consulting type of arrangement. And they look forward to the opportunity of really moving towards a more partnership society.
You know one of the interesting things that happened to me in my life is that I got a chance to have dinner once with Betty Freidan and... I was with my husband and I asked her—I got up my nerve when she… of course this is when she was alive and I got up my nerve and I asked her—"I said, what made you decide to write 'The Feminine Mystique?'" and I think her answer is one that is really relevant to this question that you just asked. She said, “You know I just didn’t want women to be judged by the metric of men moving forward.” I would say it’s the same thing for men. They need to be judged as individuals and based on the talent and skill that they have individually rather than being just a guy.
Question: How does this affect young women?
Maddy Dychtwald: It’s interesting because we’ve seen dramatic shifts take place in society in terms of the role of women and we don’t often think about it. I mean just think back: 100 years ago. Women couldn’t vote. Women didn’t have the right to own property. In fact, they were considered property of their husbands and women couldn’t even open a bank account in their own name, so we’ve seen dramatic shifts. One of the key shifts took place during the baby boomer generation as they were growing up and that was back in the 1960s. That is when the doors of higher education really opened up for women and in fact baby boomer women were the pioneers of many of the great strides we’ve seen women take in the workforce today and that is great news. In fact, when you talk to younger women they don’t even understand really how bad it was or how difficult it was for women in the past, so now you see young women graduating from high school in better shape to go into college than men, graduating from college in higher numbers than men. I mean for every 100 men who graduate from college there is 131 women. I mean that is a huge difference and now you see women, young women, in urban centers like New York, Paris, Frankfurt, San Francisco where I’m from... you see them entering the workforce in similar positions to men having as much income or even more income. So that is a huge breakthrough and hopefully we’ll see that translate into continued growth in their positions and the opportunity to move into leadership positions because that's the next step. That is the tipping point at which we’re at right now, women not just entering the workforce and staying, but taking on lots of the key leadership positions and that hasn’t happened yet, but my hope is that we’re going to begin to see that happening more and more.
Question: Where does this leave the middle class?
Maddy Dychtwald: Today we see the middle class really struggling to hold on, and you know it’s not good news for anybody. But I think it’s important to keep in mind that the only reason we have anyone in the middle class today is really because of women in the workforce. Now what do I mean by that? Well over the last 30 years the only families that have seen any increase in income at all is when the wife is working. That is pretty incredible. What it really translates into is the fact that dual-income families are the only ones who have thrived over the last 30 years. So instead of just having one income to be middle class today we need two and that is a huge transformation that puts a strain on all kinds of families. That is the direction we’re going to be moving. We need to be aware of it and we need to really recognize the contribution that women have made to families.
Question: What will be the legacy of the Baby Boomer generation?
Maddy Dychtwald: The baby boom generation is a large population that has always got a tremendous amount of attention from the media, sometimes very positive, mostly pretty negative. And I’m a baby boomer myself, so I can appreciate both sides of the coin there. But we need to keep in mind that this generation is very different than generations that came before them and have been kind of the pioneers of many of the attitudes and values of younger generations alive today, so think about it. They’re very irreverent, kind of cynical, very well-educated and have often been portrayed in the media and by other generations as being very narcissistic, self-centered or out for themselves really.
And you know frankly I think it’s a bit of a bum rap. I mean the baby boom generation has done much for our world, for the economy in general. They’ve been the pioneers of the whole entrepreneurial trends that we see taking place today. One of the biggest legacies of the baby boomers I believe is women. I mean I think the boomer women have really been the pioneers of women not just entering the workforce, but thriving in the workforce and taking on new roles and responsibilities in families.
I also think that the baby boom generation has been very innovative. I mean they love something new, something different. You know keep in mind they’re the ones that were around who really began the whole technology revolution. And you know they’re at the forefront of all these fantastic trends. But they get very little credit for it and instead they get blamed and they will be blamed, by the way, for the debacle we are about to experience when we see 78 million Americans begin to enter retirement, not being able to afford retirement. It’s going to be a horrible thing. And also being recipients of Medicare and taking that system and putting it on its head. I mean we’re just not prepared for such a large population of older adults and they’re going to get blamed for all the financial woes that will come as a result of this, but it’s really unfair because our government has done a very poor job of getting the right services in place to really be ready to service 78 million older adults.
Recorded on October 12, 2010
Interviewed by John Cookson
