IWD

EIS lecture

March 7th 2013

Dynamic Earth

Edinburgh

Ailsa McKay

Good evening and thank you all for coming tonight and thank you to the EIS, in particular Alan Scottand Sheila Harris, for inviting me to participate in this International Women’s Day event.

I would like to start with a confession – when I was invited to deliver this lecture “Women in times of Austerity: Rising to the Challenge” – the title was suggested to me. I did not therefore come up with it - but I am happy to take credit for it! However, I felt it served as a useful starting point and therefore happily agreed to talk to it. Not surprisingly then I have framed what I am going to say around the notion of ‘women rising to the challenge’.

Firstly I want outline what I think that challenge is and then I wanted to say a little bit about ‘why’ and ‘how’ women can and should embrace that challenge with a view to improving the position of women and their families across Scotland.

In terms of challenge the impact of ever increasing austerity measures is an obvious focus and of course debates on how to mitigate the worst impacts are crucial. However, a near exclusive focus on such debates can be likened to a ‘bolting the stable door’ type analogy.

That is, before we discusshow to respond to the challenge we need to initially question and define what the ‘challenge’ actually is. And in my view an equally important focus should be a challenge to the idea of ‘austerity’.

In doing so I believe we need to go even further and ‘challenge’ the idea of ‘crisis’.

What do we mean by ‘crisis’, why is it a ‘crisis’ of and how do we move beyond ‘crisis’? My initial attempts at answering those questions did not yield any positive results but rather led me to more questions – you may conclude ‘typical economist’.

But I would defend myself by highlighting that it indicates an approach to analysing the problem from a range of perspectives, incorporating and introducing new ideas, a wider choice of possible answers and potential solutions. I like to think of it as being ‘creative’ – but more on that later.

The meaning of the word ‘crisis’, derived from the Greek, incorporates notions of both ‘threat’ and ‘opportunity’. With respect to the current economic crisis - the vulnerability of our economic institutions and systems presents as a threat but also provides an opportunity to consider change and options for the future.

The current economic crisis is therefore a turning point. A time for reflection – a time for ‘challenging the norm’ and taking nothing for granted. In that regard we should embrace the opportunity provided by the crisis to rethink and reform our economic processes and institutions. As they say ‘never waste a good crisis’.

However, that is exactly what seems to be happening. The explanations of and response to the global financial crisis and subsequent economic recession has highlighted the limitations of mainstream economic thinking. The economics discipline, as it is commonly understood and practiced failed to accurately forecast the outcomes of deregulated global financial markets or come up with an effective response to the ‘crisis’ that followed the collapse of those markets.

Indeed, rather than promote recovery, the favoured austerity measures, imposed across Europe in order to deal with the aftermath of bailing out failing banks has led to further recession.

And all the current economic forecasts predict slow or even stagnant economic growth rates indicating little hope of economic recovery in the near future.

Thus it looks like more of the same – further job losses, personal bankruptcy, cuts in public spending and the associated contraction in public services are becoming endemic features of Scottish society. If we look around us at what is going on in our own workplaces, communities, neighbourhoods and homes we witness numerous examples of the disadvantage, despair and hopelessness experienced by individuals and their families.

What has struck me in recent weeks in particular is the evidence relating to tactics used by employers to ‘performance manage’ people out of jobs in order to reduce the pay bill in tough times. So even those who are managing to hang on to their jobs are doing so by hanging on by their fingernails and at the expense of their own mental well-being.

As Ann Henderson, Assistant Secretary STUC told me last week – women workers across Scotland who are living with the impact of widespread recruitment and pay freezes and increased redundancies are “stressed out of their tights”.

So it would seem that any opportunity presented by the ‘crisis’ is being overlooked by a tendency to favour the norm. That is, the response to the crisis in our economic institutions and processes is to continue to rely on those institutions to come up with a suitable ‘fix’ as opposed to questioning the seemingly indisputable faith we place in those institutions as the principal and indeed necessary arrangements for securing our overall economic welfare. This then is the challenge – we need to challenge the ‘norm’.

We need to think creatively about how we can embrace the future in ways that do not rely exclusively on the accepted wisdom of doing what we did in the past. Thinking along these lines perhaps allows us to think of the ‘crisis’ as the norm and if we don’t challenge it with new ideas and ways of thinking then the ‘norm’ will be a recurring and lasting feature of our economic systems.

I would therefore like to spend the rest of my time this evening perhaps setting out why and how women in particular are best placed to challenge the norm and how we can and indeed should rise to that challenge.

If we start by considering women’s position in the economy – both at a national and international level – with a few key facts:

  • Women represent 52% of the Scottish population and 48% of the Scottish labour market
  • In Scotland the labour force participation rate for women is 66% - compared to a global average of just over 50%
  • Both the OECD and European pay gap is 16%; in Scotland the gap between men’s and women’s full time hourly earnings - using the median - is 10% and using the mean is 15%
  • Recent research indicates that 12 months after graduation women on average earn £3,000 less than male graduates in the UK
  • Twice as many women work in the public sector in Scotland than men and women make up 67% of the Local Government workforce
  • 97% of childcare and early years education workers are women and 98% of class room assistants are women
  • A recent OECD study indicates that around one third to a half of all valuable economic activity is not accounted for in traditional measures of economic performance ie GDP
  • Across the globe women undertake the majority of unpaid care work – only one third of their total work activity is spent in market based paid work
  • The UK household satellite accounts found that the value of informal childcare (unpaid work women do) in 2010 was £343 billion – equivalent to 23% of GDP

So women across the globe are more visible in the paid labour market but their experience in that labour market is very different from their male counterparts. They remain clustered in particular occupations that often reflect stereotypes about skills and attributes commonly associated with either gender. They are paid less than men because of those stereotypes and they continue to undertake most of the unpaid care work that goes on in households.

Does any of this matter and should we care?

Not surprisingly I think it does and that we should. However, just in case we need further convincing perhaps we can return to the ‘threat’ presented by the current economic crisis.

The global financial crisis, the resulting economic recession and the response to it by the UK government have resulted in very bleak outcomes for women in Scotland’s economy, particularly with reference to the labour market.

Women’s unemployment has almost doubled over the period from 2007 to 2012. Over the same period a rise in the number of part time jobs against a fall in full time jobs amongst women indicates that women may be ‘underemployed’ in a stagnating economy.

In addition reform to the welfare system has resulted in wide ranging reductions in benefits, an increase in pension contributions and an increase in the age at which pensions can be drawn. This comes on top of a two-year wage freeze for the majority of workers in the public sector in Scotland. So the terms and conditions of public sector workers, the majority of whom are women in Scotland, are deteriorating. Furthermore, as the public sector continues to contract, a consequence of increasingausterity measures, more women will lose their jobs and at the same time will find their eligibility and access to social security payments significantly restricted.

However, a focus on labour market data is limited, providing a partial account only of the ‘threat’ posed by the economic crisis on women’s position in the Scottish economy. In considering the full range of impacts account needs to be taken of the relationship between the paid and unpaid sectors and the role of women across both those sectors.

As we know from the stats relating to where women are located in the Scottish labour market, female and male employment tends to be concentrated within occupations traditionally related to their gender, and views on their role within society. As a result female employment clusters around the ‘softer’ caring, teaching and cleaning sectors. These ’perceived’ lower status and subsequently lower paid jobs tend to be viewed as ‘feminine’ work and not suitable for the greater part of male employment. Thus occupational segregation features as a key characteristic of modern labour markets with an associated tendency for the market to consistently and persistently undervalue the jobs that women do.

Furthermore women’s position within the labour market is more precarious, primarily because they work flexibly, are more likely to be in temporary or part-time employment and/or are segregated in low-pay sectors and occupations. Women, therefore, are less likely to have built up any savings, resulting in less resilience to weather tough economic conditions and putting them, and their families, at greater risk of increased poverty.

And as there is a link between women’s poverty and child poverty we should be concerned about recent trends in women’s employment patterns and the impact on child poverty.

A further cause for concern in considering the impact of the crisis on women’s position in the Scottish economy relates to the changing face of the public sector. The unique feature of this recession and subsequent limitedrecovery is that rather than serve as a natural buffer against the impact of the downturn, public spending has been the focus of an austerity policy with long lasting implications for the nature and purpose of the public sector in modern economies. It is this reconfiguration that presents as a real ‘threat’ when we consider the impact on women and families.

However, this impact remains largely ‘invisible’ in the context of mainstream economic analysis. Cuts in state support in care services, alongside restrictions in benefit entitlement, pay and recruitment freezes in the public sector and pension reform have dominated the policy agenda since at least 2009. The combined effect has been to expose women to greater risks of job losses, real reductions in income over the longer term and managing increased pressures on limited household budgets.

Furthermore, reductions in spending on state supported care services do not imply a subsequent reduction in demand for those services but rather a transfer of responsibilityfromthe public to the private sector. With no guarantee that the private sector will pick up the slack, and given what we know about the gendered division of labour within households, it is safe to assume that women will absorb this activity. Thus women will find that their opportunities for formal labour market participation are further restricted due to the demands placed on their time performing necessary work at home, without pay.

The gendered impact of the current economic recession (and subsequent austerity measures) highlights how women are now disproportionately paying the price. Given that there appears to be no let up in the implementation of austerity measures the conclusion to be drawn perhaps is that this particular gender inequality is a price worth paying? This question is essentially a question of what do we as a society value?

We know from the stats relating to occupational segregation, the gender pay gap and the gendered division of labour within the household that many of our community assets are going unrecognised, in particular the skills and knowledge of our women workers both in the paid and unpaid economies.

Thus, the evidence seems to indicate that as a society,we undervalue women and the work they do and or want to do.

The stats continue to paint a worrying picture about women and employment but what does this tell us about women and work? In looking only at the stats we fail to account for the provisioning, caring, nurturing and managing activity that supports and indeed drives our local communities. And what impact has the reconfiguring of public finances and the contraction in public sector employment and services had on that activity?

We don’t have numbers readily available to measure this activity thus we tend to ignore it in the context of our formal economic analysis and modeling techniques. However, as I mentioned earlier various attempts have been made to estimate the value of this activity and results have indicated the significant value of unpaid work in contributing to societal welfare. The cooking, caring, cleaning and managing that goes on in households contributes to current consumption but is also significant investment activity contributing to future well being. We also know this range of activity secures ‘sustainability’ and thus is crucial in the survival of local communities.

But we do not adequately account for this unpaid workand as a result we do not fully realize its value.Women are at the heart, and are the heart of, our local communities and if we continue to restrict a vital blood supply to that source we are in danger of threatening the survival of those communities.

How can we move beyond this position?This is where I think we have opportunity – rising to the challenge. That is, what can we do to nudge society along a path that makes sense with respect to valuing all of our assets and not just those with a market price.The global financial crisis and the resulting great economic recession presents us with many opportunities to rethink our economic structures, institutions and processes and embrace radical reform that will produce better outcomes for us all and not just a privileged few.

In thinking of how we do just that I am drawn to the work of my fellow Feminist Economists.

I attended the annual conference of the International Association for Feminist Economics in Barcelona last year and along with many of my colleagues and friends I signed the following statement:

We feminist economists gathered in Barcelona on the occasion of the 21st Annual Conference of the International Association for Feminist Economics (IAFFE), considering that in the last decades neoliberalism has produced multiple crises, in different parts of the world, and this global crisis has moved from the periphery to the centre and is now hitting Europe….We reject both the current mainstream explanations of the global crisis and the proposals for resolving it. We reject the economic strategies that continue to skew income and wealth distribution in favour of finance and large capital while depriving people of necessary care and the means for a sustainable life. We reject an economic system that exploits women’s unpaid care work to keep the economic system going, relying on them to absorb the dramatic costs of the crisis.

Barcelona June 28th 2012

This statement highlights the frustration many of us, as feminists, feel about how any opportunities for change are being hijacked by the mainstream, in particular the mainstream in economic thinking.

This then is the challenge - We need to begin by challenging the commonly held assumption and associated practice that the economy and the study of economics is the preserve of men.

In 2010 women represented 22% of all academic staff in UK University Economics Departments and only 10% of full Professors. In the US the picture is strikingly similar. In 2011 women made up just over 22% of all faculty in PhD granting University Economics Departments and only 13% of full Professors are women. In 2009 Professor Elinor Ostrom became the first, and to date only, woman, to be awarded the Nobel Prize in Economics since it was established in 1968.

Thus, the study of economics, at least as an academic discipline, is male dominated.

So why are there so few women academic economists? Perhaps more crucially does any of this matter and to whom? In exploring the relevance of this question it is crucial to consider the actual power and influence of the discipline in determining public policy. As Keynes, a very influential male economist, so eloquently argued: