Economy

How Measuring The Economy Differently Could Increase Gender Equality

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Every three months, the government takes the temperature of the economy by releasing Gross Domestic Product, or GDP, figures. GDP goes up: the economy is supposedly healthy. GDP goes down: there’s a bug (or an all-out contagion, as during the Great Recession).

But GDP — which adds up the value of work being done, widgets created, profits made, money spent by consumers and the government, and things invested and exported — was never meant to accurately assess everything happening in the economy. It was created during the New Deal to see whether the programs were really helping. The creator of the GDP measure itself, Simon Kuznets, warned, “The welfare of a nation can scarcely be inferred from a measurement of national income as defined by the GDP.”

So a handful of groups have tried to create alternative measures that would gather more information. “Green GDP” measures would factor in the environmental side effects of economic production. Others measure leisure, happiness, and overall welfare and quality of life.

One group is pushing the incorporation of Social Wealth Economic Indicators, or SWEIs.

SWEIs measure the environment, health of the population, poverty rates, income inequality, and educational attainment to see where the country currently stands. But they also measure investments in the future, such as the time parents spend doing unpaid housework and childrearing, government and business investment in care work, public spending on education with a focus on early childhood education, paid parental leave policies, and employee flexibility to allow for child care needs.

“It’s not simply a measure of where we are today,” Natalie Cox, coordinator at the Caring Economy Campaign that is working on the SWEIs, told ThinkProgress. “This tool has the potential, unlike other metric tools out there, to really understand what inputs are needed to produce the kind of human capacity outputs and competitive outputs we’re after.”

And in doing so, they end up putting a lot of focus on gender. “Gender is the elephant in the room,” said Riane Eisler, president of the Center for Partnership Studies that is the incubator for the SWEIs. The indicators “show the connection between closing the gender gap in every respect and boosting economic competitiveness.”

These aren’t small adjustments. A study from the U.S. Bureau of Economic Analysis in 2012 found that if GDP had included unpaid work in the house, it would be 26 percent bigger. But that study only calculated the value with a “replacement” model, tallying up the unpaid hours people spent and giving them a dollar value by estimating how much it would cost to have paid someone else to do them. But wages are very low for domestic workers and housekeepers. A similar study in Australia also calculated the income people doing domestic work could have earned during those hours and found that unpaid care work would expand the country’s GDP by just over 50 percent if taken into account.

Without measuring these activities, they end up being invisible to policymakers and businesses. “From a gender lens, the fact that this kind of information, the value of care work, is not included in our measures is disastrous,” Eisler said. The SWEIs are meant to create “a shift in what we consider productive and valuable. It goes right to the heart of the devaluation of women and anything that has been stereotypically been called feminine…as not economically effective.”

That really hurts women. “We have this idea, and it’s represented in how we track our economic numbers, that women’s effort is worth less,” Valerie Young, advocacy coordinator at the National Association of Mothers’ Centers and an adviser to the SWEIs campaign, said. “When in fact if women aren’t caring for others and making it possible for other family members to go to school, to go work, and go to work themselves, the economy comes to a screeching halt.” But women are severely penalized in their wages for becoming mothers, part of the enduring gender wage gap. Given that the U.S. doesn’t have paid family leave, universal and affordable child care, or policies making it easier for people to work less or adjust their schedules, women, still the default caretakers, are pulled away from the workforce. Despite the fact that they’re making an investment in the future of the economy by raising children, they will suffer monetary and career setbacks.

SWEIs put a focus on these issues and expose the ways that United States comes up short. “They document that our nation lags behind other [developed] countries, both in the condition of our quality of life and in our present investment and the condition of our human capital,” Eisler said. “The economic implications of this lag are dire, yet [GDP] and even the other alternatives don’t really connect the dots and don’t give that information to policymakers so they can ensure that we move in the right direction.”

The goal isn’t to replace GDP, but to supplement it. Congress in fact approved the use of a handful of alternative measurements, and Eisler’s group fought to have SWEIs included, but it was never funded. In the meantime, she and the rest of her coalition is planning to bring the indicators to businesses and local governments. “We’re adapting them for business to really make the business case,” she said, showing them studies that companies that provide things like paid leave and child care perform better. And they also want local and state governments to adopt them in policymaking. “Our expectation, number one, is to change the thinking, change the conversation about what is going to be economically productive.”

If they were to be adopted at the federal level, she thinks a number of policies would rise to the top. “You could have a caregiver tax credit,” she pointed out. “We have child tax credits but the caregiver is invisible.” Paid leave would get a boost, as would stipends for low-income parents. “These are very, very sound investments.” And it would improve women’s lives. “You would certainly see a smaller wage gap, you would certainly see much lower poverty rates,” she said. It’s not such a crazy idea. Switzerland and other countries have started using similar measurements. But the United States has yet to move forward.