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Why the GDP Won’t Work for Women

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You probably know that GDP stands for gross domestic product and is used as a measure of the value of all goods and services produced in the national economy. Economists and elected officials are happy when GDP is up, and headlines are dire if GDP trends downward or is flat. Generally speaking, the assumption is that a growing economy and rising GDP means plenty of everything for everybody. If you are a woman, a mother or other family caregiver, you should beware of the GDP. It certainly doesn’t account for the unpaid carework you are doing, and you may well be struggling in spite of a robust GDP. At long last, social scientists, women’s policy advocates and world leaders are starting to take notice. Some are even taking action.

The first thing to remember is that the GDP counts positively any market transaction, even if it is harmful. For example, the sale of cigarettes is reflected in the GDP as a positive transaction. So is the medical care consumed by those suffering from tobacco-related illnesses, such as cancer, respiratory diseases, and perhaps death. Production of goods increases the GDP even if forests are leveled, rivers poisoned, or habitats lost. Remember when the reports of the disaster in Japan included the assertion that the hurricane and tsunami would result in an economic boost in new construction and expenditures in recovery costs? Did it strike you that that was an odd way to look at an event that killed upwards of 25,000 people, wiped out entire villages, towns, businesses, orphaned tens of thousands of children, and caused incalculable heartbreak and suffering? That is the perversity of the GDP.

The second thing to keep in mind is that a rising GDP would only represent more of everything for everybody if everyone shared equally in economic growth. You know that that is not now and never has been true. Income inequality, the gap between the poor and the wealthy, is wider now than at any time after World War II. In fact, graphic representations of income distribution look like a barbell, with lots of people with not much on one end, and fewer people with a great deal on the other. Consider that in 2007 the top 10% of US earners took home nearly 50% of all wages earned. In the past 5 years the top 1% of incomes got fully two thirds of all economic growth. Flipping the perspective, the bottom 90% of US households compete for about 27% of American wealth. So, the GDP can rise, and economic indicators can show a wealthier economy, but most people will see no discernible difference in the family checkbook. In recent decades, the GDP grew nicely, yet middle income earners saw their wages stagnate, and lower income earners actually saw theirs decrease. High wage earners alone reaped the gains.

Around the world and in the U.S., women spend twice as much time as men on unpaid work, in the home, with children or other dependent family members, and making their communities richer and better places. These transactions, which would cost billions on the open market, simply never appear on any public balance sheet. Caring for others, tending our small corners of the natural world, lending our energy to a neighborhood or community project, are the very building blocks in our social structure and economic interaction. Yet these interactions are totally invisible in any economic measure of human activity. What enhances our well-being and promotes the realization of our potential, as individuals and collectively, escapes the GDP calculation. Economic success and the quality of our lives are not the same thing. The GDP is inadequate, incomplete, and unreliable as a gauge of national productivity. It over-represents market activity, and under-represents everything else. It fails to account for the unpaid work of producing functional human beings and sustaining the ill, elderly or disabled. In other words, the GDP fails to account for what women do. As a result, women suffer disproportionate political and economic poverty, and inequitable opportunity.

And that’s why the GDP won’t work for women.

‘Til next time,

Your (Wo)Man in Washington

P.S. If you want to learn more painlessly about income inequality, here are two articles, one from Mother Jones and another from the Huffington Post.


Comments

  • Viviana Russell

    Great blog post.