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This Alternative Study Of Economics Cuts Out Centuries Of Bias

By Fast Company
Capital Markets

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“There really isn’t just one story of the way things are.” That’s true for many issues, and it’s especially true for economics, argues Joyce Jacobsen, provost and vice president for Academic Affairs at Wesleyan University. She says that traditional economics provide an incomplete narrative that leaves out women (specifically women of color) and families, and suggests that feminist economics offers a more accurate picture of the labor market.

Jacobsen was speaking at an event held by The Center for American Progress, which examines how the economy actually operates for women and how long-held attitudes still shape policy decisions. She explained that traditional economic models rely on the “idea of this lone person endlessly optimizing and improving their well-being.”

Picture a man who has complete agency over his work, from what he chooses to do, to where and how long. Not only does that not work in the real world (people aren’t always able to make those choices because of geographic or financial constraints), but agency also is affected as soon as you add other people (family members) into the mix. “When you are looking at households,” says Jacobsen, “it makes you realize there are all these power dynamics.”

So while economists share an affinity for accurately and objectively measuring things, the field is fraught with variables, not the least of which is that half of the population and their contributions aren’t accurately and equally counted.  Although Jacobsen said that the roots of feminist economics can be traced back to the 19th century, it wasn’t until the early 1990s that an organization and publication were founded to publish and advance feminist economic theory and research.

THE GENDER GAP IN ECONOMICS

This is largely due to the lopsided gender balance in the field. In 2014, women constituted only 12% of American economics professors. A study published in 2016 found that the women who do go on to earn PhDs in economics are less likely to get tenure and promotions than their male peers. Those who do are more likely to leave academia within a tenure cycle of earning their PhDs. Elinor Ostrom is the only woman to ever win a Nobel Memorial Prize in Economic Sciences.

The result of this imbalance, according to Jacobsen, is a misrepresentation on a broader economic scale in the GDP. If work is unpaid, it isn’t included in “production,” and since women do the bulk of this informal work around the world, their contribution has been devalued.

For example, a couple with two incomes doesn’t always represent a net increase because there is labor not being done. Part of that labor could be domestic work, and part of it could be caring work for the elderly, children, or sick. Such work is often unpaid, said Jacobsen, “and it hurts the bargaining power of the caretaker. It’s harder to ask for higher wages or to leave a job.”

The disparity between traditional economic models and feminist economics widens when you consider other factors. Nina Banks, associate professor of economics at Bucknell University, explains that intersectional analysis–an approach to understanding gender based on multiple forms of oppression such as race, ethnicity, sexuality, and citizenship status –takes into account the work experiences of women of color that are largely not factored in when economists study work as a whole. “Work in the U.S. has always been segmented along the lines of race, gender, ethnicity according to sector, industry, and occupations,” Banks observed.

THE POOL AT THE BOTTOM

Michelle Holder, assistant professor of economics at John Jay College at City University of New York, posited that among the 22 occupational categories in the U.S. labor force, women are “crowded” into those with low wage. Although women make up 48% of the workforce in the U.S., Holder noted, they represent 70%-80% of personal care and healthcare support positions, which are among the lowest paid jobs.

Banks also noted that women’s work in the U.S. has also always had a “hierarchy of jobs that historically places white women at the top and women of color at the bottom.”

That pool at the bottom were typically low-wage workers who could be pulled into the economy at various times as needed, but were always available as a source of low-wage domestic labor for white women. “So when we talk about women at work in America, we are typically talking about the entry, exit, and re-entry of white women into the labor force,” said Banks. Economics already has the androcentric (male) bias, Banks said, but there’s another layer of Eurocentric bias that skews reporting.

WAGE GAP SQUARED

African-American women, Banks and Holder both pointed out, have a much longer history in engaging in both unpaid and paid labor in the market and have always had higher labor-force participation rates. However many more hours black women have worked collectively, their position in the economy hasn’t reflected their contribution, nor has their experience translated into earnings or employment prospects.

Holder called it “wage gap squared,” to reflect the disparity of earnings between gender as well as race. At the intersection are black women–even controlling for education and occupational distribution–and they are still earning less overall. Those economists studying and trying to make sense of these gaps, said Holder, can only come to one conclusion: There’s systemic discrimination.

The issues the modern woman in the workforce grapples with, argued Banks, are the same that black women have faced for over a century. Likewise, she pointed to how working-class white men are dealing with cultural marginalization in the same way people of color have for decades. “It’s just a continuity of their experience,” she stated.

Randy Albelda, director of the graduate program and professor of economics at the University of Massachusetts, Boston, underscored that the labor market is not responding to the reality of any women’s lives. She echoed Jacobsen’s sentiment that the labor market model assumes that workers are free to be fully engaged at work, and benefits and policies are geared toward a white, heterosexual family with one person as the dedicated breadwinner.

“Caregiving changes the dynamics of how much you can work and where,” she said. Both of which reduce wages, she added, “the cost of those lower wages follow you through your lifetime, through social security and retirement benefits.” On a national scale, this represents trillions of dollars lost to the economy as unpaid, informal work that remains uncounted in the GDP, and earnings that can’t be used, for example, to start new enterprises that could potentially employ even more people.

Photo: Getty iStock

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