Executive View by Marshall Loeb: Women Shake the Work Force

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Marina Whitman, the newly appointed chief economist of General Motors, I claims that she can almost cite the fateful day when the men who run New York City's banks declared: "O.K., fellas, we've got to let them in." Them are American women, and it was only half a dozen years ago that they began to be admitted, little by little, to the executive establishment. Whitman knows because when she meets groups of bankers, she sees more and more women junior executives, poised for that big leap up to higher management. But almost all are age 32 or 33 or younger—and practically none are older.

Throughout corporate America, male managers are awaking to the reality that women are rising all around them—challenging them, changing their companies and generally shaking things up. Men at the very top are pressing this revolution. Even in the most encrusted industries, chief executives like Bethlehem Steel's Lewis Foy, Equitable Life's Coy Eklund, Du Font's Irving Shapiro and many others are telling their troops to find and hire and promote women. Resistance persists down in the middle-management trenches, but it is crumbling.

For all the publicity surrounding this significant social development, several essential points probably deserve more emphasis. For instance:

The rise of young women executives will fairly soon accelerate. In U.S. graduate schools of business, one in five students working toward an M.B.A. degree is a woman. The percentage is larger in the elite universities. The share of women M.B.A. recipients in last spring's graduating classes was Stanford 24%, Dartmouth 25%, Wharton 26%, M.I.T. 28%, Northwestern 30%, Columbia 33%.

And the percentage is growing. In the incoming first-year classes this autumn, the share was 38% at Yale and 44% at New York University.

Even more important is the rapid growth of women in the blue-collar force. Over three-fifths of all U.S. women aged 20 to 64 hold jobs and are tremendously affecting the current economy. One example: productivity is flat, in some part because many women are holding first-time jobs and are not so well trained as men. But as the newcomers gain experience, productivity will rise.

Policymakers are radically changing their views about unemployment. Even liberal economists no longer consider "full employment" to be a 4% rate of unemployment, but a 5.5% rate. That means, compared with the past, the U.S. is prepared to accept 1.5 million more Americans out of work before Washington policymakers start pumping up the economy in an inflationary way to fight unemployment. A higher level of joblessness is tolerable today because so many more people are at work, and thus, if one family member loses his or her job, there is a better than 50% chance that another family member is collecting a paycheck and can take up the slack. This is a reason why the Federal Reserve Board felt prepared a month ago to put on extremely tight credit clamps, risking a jump in unemployment just as a recession appeared to be developing.

Future recessions will be milder and briefer than they otherwise would have been.