Women’s mass exodus from the financial industry

Just when you thought the finance industry couldn’t get any more dude-heavy, The Wall Street Journal (via Annie Lowrey) reports that women are leaving the financial industry behind:

In the past 10 years, 141,000 women, or 2.6% of female workers in finance, left the industry. The ranks of men grew by 389,000 in that period, or 9.6%, according to a review of data provided by the federal Bureau of Labor Statistics. The shift runs counter to changes in the overall work force. The number of women in the U.S. labor market has grown by 4.1% in the past decade, outpacing a 0.5% increase in male workers.

It’s also interesting how this breaks down by age and advancement. Older women have stayed in the business, but most haven’t risen very high through the ranks. (A world of Ms. Blankenships?)

The picture is quite different for older women who joined the industry in the 1970s and early 1980s. The number of women in the business over 55 years old has grown by 366,000, or 56%, since 1999, outpacing a 234,000 increase, or 34%, in similar-aged men.

But that longevity doesn’t necessarily equate to advancement. Senior executives such as Sallie Krawcheck, head of global wealth and investment management at Bank of America Corp., and Heidi Miller, head of international operations at J.P. Morgan Chase & Co., are still a statistical anomaly.

This isn’t a new trend — Forbes covered it last year, too.

It probably goes without saying, but even in our post-economic-meltdown world, finance is still arguably the most important industry in America. There are good reasons, beyond minor little issues like equality, to want women to be a part of it: studies show women tend to be more cautious investors than men. And if there’s one thing the financial sector could use more of right now, it’s caution.

Why are we seeing such backsliding now? The now-defunct Portfolio magazine tackled this question in 2008:

The reasons behind the stagnation are tricky. Some people I spoke to suggested that, because of all the overt signs of progress–the Clinton candidacy, a woman speaker of the House, female Fortune 500 C.E.O.–the barriers women face today are more subtle and therefore harder to overcome. Basically, the popular perception is that women have made it, so there’s nothing to discuss.

Therefore, if you’re not a success, it’s about you and your abilities (or lack of ability), because we can all certainly see that women have reached the top.

I think there’s some truth to this idea that there is less pressure on companies today to diversify their ranks, especially at the top. (It’s true even in Hollywood! Just look at how they cast Shia LeBeouf  instead of a young woman in Wall Street 2. … j/k) Once they can point to a person of color on their board or a woman at management level, they feel as if their obligation to diversity has been met. But we still live in a racist, sexist society — which means that without constant vigilance, businesses and power structures will default to “white/straight/male”. Clearly that’s what’s happening in the finance industry.

On a related note, last spring my former colleague Dana Goldstein and I discussed whether or not it’s sexist to say the financial crisis was caused by men. Transcript here.