The Latest Evidence From Norway Shows Female Hiring Quotas Hurt Women

The Latest Evidence From Norway Shows Female Hiring Quotas Hurt Women

The latest data from Norway and some other European countries on female quotas in the workplace show a policy with a good intentions doesn’t necessarily translate to a good outcome.
Helen Raleigh
By

Norway has many American admirers, from President Trump to Sen. Bernie Sanders. Progressives like Sanders consider Norway a progressive paradise because it has implemented almost every leftist policy under the sun, from fully government-run health care to government-mandated sex “equality” policies in the workplace.

But have these policies achieved their desired outcome? The latest data from Norway and some other European countries on female quotas in the workplace shows a policy with a good intentions doesn’t necessarily translate to a good outcome.

We’ve all heard this argument: “Women are well-represented in education and the labor force, but at the top of the power hierarchy they are still surprisingly poorly represented.” In a recent viral interview of psychologist Jordan Peterson, Cathy Newman, a journalist from UK’s Channel 4, kept saying “only seven women run the FTSE 100 companies” as evidence that male dominance in the workplace is what prevents women from reaching the stars. But is it true? The evidence suggests not.

Norway did Just About Everything Possible

Ten years ago, Norway, the leftist paradise, took a drastic step to address this sex gap at the top of corporations. Its minister of trade and industry, Ansgar Gabrielsen of the Conservative Party, introduced a mandatory female quota of 40 percent for the boards of all public limited companies.

This draconian law means “if a company breaks the gender quota rules in Norway it will be denied registration as a business enterprise in the Brønnøysund Register Centre and be subject to forced dissolution by the courts.” Following Norway’s example, a dozen other European countries, including France, Germany, and Italy, adopted similar quotas. In those countries now, 30 to 40 percent of corporate boards must be made up of women.

Ten years later, The Economist reported recently how the policy turned out based on data from these countries. On the surface, it seems the quota mandate achieved its desired outcome: female representation on corporate boards increased. “In some countries the share of women among directors of large companies has increased four- or fivefold since 2007.” But as always, the devil is in the details.

Did the higher female representation on corporate boards improve profitability and governance, as proponents promised? The data is inconclusive. Some companies saw improvement in both areas, but some didn’t. Did it improve boards’ decision-making, as supporters claimed it would? Data shows that although decision- making processes might have changed, their substance and quality didn’t improve by simply having more women on boards.

Now corporations in Europe have difficulties finding qualified women to fill the quota. Some reached for less-qualified and less-experienced women, which doesn’t improve corporate performance or governance. Since the law in Norway only applies to public companies, some Norwegian companies became private. The number of public limited companies in Norway dropped from 452 in 2008 to only 257 in 2013. The number of board seats dropped from 2,366 in 2008 to 1,423 in 2013. So there are fewer seats for women to fill.

Benefits Only For the Already Advantaged

But what everyone is most interested in answering is: did the quota really benefit women? It depends on whom you ask. The quota has certainly benefited a small group of women who are already high achievers and at the top of corporate hierarchies. They are called the “golden skirts,” and their numbers are very limited. Since the quota mandate led to a surge of demand for these women, many found more opportunities and higher pay, but they also found themselves stretched thin by serving on multiple boards.

As The Economist reported, the most puzzling information the data reveals is that the quota mandate “had no discernible beneficial effect on women at lower levels of the corporate hierarchy.” Proponents of such a policy have long promised that more women in leadership positions would translate to more career opportunities and promotions for women in the lower levels, which in turn will lead to better-paying jobs and a shrinking pay gap. But that promise turned out to be wishful thinking.

Data shows that in France, Germany, and the Netherlands, which all mandate women taking 30-40 percent of corporate board seats, only 10-20 percent of senior management jobs—one level below the board of director position—are held by women. That number has been consistent for the last 10 years. The Norwegians’ own study shows that, eight years after Norway introduced the quota law, there are zero female CEOs in the country’s 60 largest companies.

No data demonstrates any higher pay or more career-advancing opportunities for the vast majority of women in the workforce. Thus, more women leading companies has done little to benefit 99 percent of women in the workforce. It failed to lure more women to climb the corporate ladder or to open more midcareer opportunities and better pay.

Let Women Set Their Own Priorities

In fact, Norway is seemingly going the wrong direction. In 2015, the World Economic Forum’s Global Gender Gap ranked Norway as the world’s second most gender-equal country, with a score of 0.85 on a scale where 0 is inequality and 1 is complete equality. But in 2016, Norway’s ranking dropped to the third place with a lower score of 0.84.

The only logical conclusion, as The Economist presented, is that “Gender quotas at board level in Europe have done little to boost corporate performance or to help women lower down.” Like so many leftist policies, the mandatory quota benefits a very small elitist group at the expense of the masses, despite slogans of “equality.”

One of the major reasons we don’t see more women at the top of corporate hierarchies is the choices women make. For example, some women choose stay with their children full-time for a period due to the costs of child care or their own satisfaction in mothering their children. When women make such choices, they trade for them career advancement.

So if society wants to see more women taking paid leadership roles, one sensible policy is to make child care more affordable. Given that the high cost of child care is the result of government policies, getting rid of those policies will help. The last thing women need, however, is a useless quota at the board level that does nothing for almost all of us.

Helen Raleigh is a senior contributor to The Federalist. An immigrant from China, she is the owner of Red Meadow Advisors, LLC, and an immigration policy fellow at the Centennial Institute in Colorado. She is the author of several books, including "Confucius Never Said" and "The Broken Welcome Mat." Follow Helen on Twitter @HRaleighspeaks, or check out her website: helenraleighspeaks.com.

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