Mary Daly Dropped Out of High School. Now She's the President of the San Francisco Fed

Badass Women celebrates women who show up, speak up, and get things done. Katie Porter is a February 2020 InStyle Badass 50 honoree. 

When you think of economists, older white men with an Ivy League education typically spring to mind, and that stereotype isn’t so farfetched. Economists tend to be a homogeneous group, but Mary Daly, a labor economist and the president and CEO of the Federal Reserve Bank of San Francisco, is committed to tackling what she has called “the diversity crisis facing economics” by leveling the playing field so everyone, regardless of socioeconomic status, race, or gender, gets a fair shot.

As a gay woman from a modest background who likes to paint and weld on her off hours, Daly herself doesn’t square with the conventional image of an economist, and her path to the top of her field was just as unorthodox. Growing up in Ballwin, Mo., Daly and her family fell on hard times. Like many Americans today, they were living paycheck to paycheck, and when a string of health and financial emergencies struck, Daly decided that the best thing to do was quit school and start earning a living. At age 15, she moved in with friends and got jobs at a doughnut shop and Target to make ends meet. She was struggling, so her former guidance counselor put her in contact with a friend, Betsy Bane, who was teaching classes at a local university.

Bane saw the potential in Daly and persuaded her to get her GED. Once she passed her high-school equivalency exams, she wanted to become a bus driver, thinking that steady wages and union benefits would be the best option for her, but Bane encouraged Daly to continue her education instead. She was skeptical but applied to the University of Missouri-St. Louis, and to her surprise, got in. The only problem was that she couldn’t afford the tuition. Bane wrote a check for $216 to cover the costs of the first semester.

Daly experienced some setbacks and didn’t always feel she was good enough, but with more encouragement from Bane and the advice of professors along the way, Daly persevered and went on to graduate with a bachelor’s degree in economics and philosophy from the University of Missouri-Kansas City, a master’s in economics from the University of Illinois at Urbana-Champaign, and a Ph.D. in economics from Syracuse University.

She joined the San Francisco Fed as a research economist in 1996, when Janet Yellen was the president and CEO. The first woman to hold that position, Yellen too became a mentor to Daly and, of course, would later serve as the first female chair of the entire Federal Reserve system, from 2014 to 2018. Daly worked her way up through the research department, determined to forge a path for young economists from all backgrounds.

In the United States less than a third of students who earn a Ph.D. in economics are women, and that proportion has remained roughly the same for the past 20 years, even as the share of women earning doctorates in STEM subjects has increased. Among economics professors with full tenure, only around 13% are women. The prospects for racial and ethnic minority groups are even grimmer.

Why is it that so few women and minorities enter, and more importantly, stay in economics? Anecdotes abound describing the biases they experience, ranging from reports of sexual assault to micro-aggressions, which Daly has described as “death by a thousand cuts,” something she can relate to. “For me, it was oftentimes something simple like people saying, ‘I’m surprised you did as well as you did,’ and you wonder why they feel surprised. And it has nothing to do with experience or age or anything; it has to do with being female,” Daly tells InStyle.

“The overt actions are easier to spot, and everybody can rally around you when they happen,” says Daly. But those inadvertent comments cut even deeper, she says, when no one in a position to say something intervenes. “I really think that's part of the problem, that good people are saying nothing because we actually don't realize how much these things hurt.”

Daly recalls another example of this type of unconscious bias that occurred in her own department while she was research director. When research associates were needed to bring guests up from security, it just so happened that only the women were escorting guests. “The optics of that are, well, we have subordinate roles: We’re not at our computers doing research, we're escorting guests,” says Daly. “And so there's an easy fix for that.” Daly notes that it was a male research associate who alerted her to this problem: “That’s an example of a good person speaking up.”

Rectifying other inequities at the Fed proved much more challenging. When Daly was associate director of the research department, only a fifth of the research associates were women. “We're public servants, first of all, in the Fed,” she says. “It's a profession that believes in diversity of thought, and we have to live up to that by recruiting people who have diverse views. That’s often reflected in balances across gender, ethnicity and race, and socioeconomic status.” Daly resolved to review and improve the recruiting and hiring practices to attract a diverse group of qualified candidates. At first, she was met with resistance from colleagues who thought their methods were already fair and that working to achieve diversity would mean having to lower standards. “I'm vehemently against that concept,” says Daly. “We went back and did a review of the hiring, and the women coming in had equal criteria. There was no diminishing of the standards or anything. We were just getting too few even applying.”

Mary Daly

Daly’s team put the word out to students and faculty that the Fed was committed to creating an inclusive work culture. When new graduates started applying, their names and schools were omitted from résumés so no one could guess the gender or background of the candidates. Daly also made sure the interview panels were diverse. “When you have diverse interview panels, you end up with more females for two reasons. One, your economists are choosing diverse people, but also — and this is the magic bullet — the interviewee sees people who look like her on the panel. Or even if they don't see a woman, they see a person of color and they say, ‘Oh, it's not only one type of person [working here], so maybe I won't be uncomfortable.”

As a result of these initiatives, the share of female research associates went from 20% to 50% in the first year, and these methods were rolled out to other Reserve banks and to the Board of Governors. “People saw that their research associates were just as good, and sometimes better, more motivated, more interested, and then that resistance fell away to some extent,” says Daly.

She also believes that increasing diversity is important for a healthy economy overall. “It's beyond fairness,” says Daly. “[P]olicymaking reflects the people who make it. If we don't have people around the table who are diverse and represent our population, we're going to spot problems that are more limited. We won't know this full span of problems and we certainly won't get to the full span of solutions. We need that diverse lens.” She also points to the shortage of Americans, especially minorities, with at least a four-year college education. “[T]he inequity in educational attainment assumes that that's the distribution of talent. But it's not. We are leaving people off on the sidelines, not in their optimal role, in a way that could contribute the most to society. It's bad for them, but it's also bad for our economy.”

The San Francisco Fed has a number of educational programs, such as My Economy, a photojournalism project for young people to learn how a job in economics can be a way to create positive change in the world, and Zip Code Economies, a podcast highlighting the lives and economic situations of everyday people in the Federal Reserve district Daly serves. But as the first person in her family to graduate from college, Daly is particularly excited about the launch of a support network for students who are also the first in their families to go on to higher education. Made up of Fed employees who are also “first-gen,” it’s “about building a virtual bridge” between high school and the first semester of college, says Daly, whose ultimate goal is to boost employment. “[The Fed is] responsible for full employment,” says Daly. “That's one of our mandates from Congress.”

Yet, despite all the resources available to help young people succeed, Daly says it’s essential to have the support of mentors. “[T]here’s no way that I would have been able to find my way without some help,” she said in an interview for the podcast Women in Economics. “And it just reminds me of the importance of mentors at any point in your life, but especially when you’re young, having someone say, ‘I see something in you that you don’t see in yourself. And I see opportunities for you that you don’t even imagine.’”

When asked what young people can do if they don’t have a mentor, Daly says, “You can find them. Janet Yellen famously told me, ‘Mary, no one doesn't want to talk about themselves.’ People actually want to share. Go ahead, be brave. Take that courageous step and ask somebody, ‘What did you do? You're successful, how did you get here?’” You never know how far you can go if you don’t take that first step.

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