May 15, 2014
Women, not men, are the key drivers of the Irish economy.Posted in Behavioural Economics · 67 comments ·
On Monday evening I was in Tesco in Ballybrack. Like every other supermarket in Ireland on a Monday evening it is full of women and the odd few men sent out to get things that the family have run out of like milk, bread and “stuff for the packed lunches”. The shoppers, overwhelmingly women, stopped in the aisles, priced stuff, weighed up their options and chose. This is how the economy works. Millions of everyday decisions taken by millions of people every day make up what is the economy.
The economy is the amalgamation of our small decisions.
Earlier that day, I was at a brilliant (but for a middle-aged, white male economics commentator, rather disconcerting) ‘Women On Air‘ conference at Dublin Castle, organised by Caroline Erskine. It was enormously important because it dealt with why there are still relatively few women on air and in the print not just here in Ireland, but all over the western world.
The media, and broadcasting in general, is more friendly to women than most professions and yet here too, in this crucial forum where opinions can be moulded, changed and formed, the voice of half the population is heard but not at full volume. In contrast, men’s voices are amplified far in excess of 49pc of the population. We all know that whoever tells the story, frames it, dictates the parameters and determines, if not the conclusion, the range of conclusions.
Among the many interesting speakers was the American journalist Katie Orenstein who put up a slide showing that on certain subjects, the so-called ‘pink topics’, women do write more than men. These are the four Fs – food, furniture, fashion and family. But on ever other topic, men outnumber women. If you take as your starting point that we all write about what we know, the inference must be that women have more experience and expertise in these areas.
The charts shows this bias in the US for women writing about the four Fs. The most depressing revelation is that in the US, only 11pc of economics articles in mainstream media are written by women. The inference must be that women don’t have expertise in the hard world of economics.
Is this true? In fact, the opposite is true. Irish women are more important to the Irish economy and job creation than Irish men. Indeed, most of the growth rate of the Irish economy over the past three decades is down to Irish women.
Who creates jobs? The accepted narrative is that entrepreneurs create jobs. This implies that the wealthy people on boards of firms are job creators and therefore should be lauded. This is not the case.
The consumers who buy products create jobs. The best product in the world if it is not bought, won’t sustain a single job. Jobs are created after stuff is bought, not before.
Who are the main consumers in Ireland? Why, Irish women of course. Women have traditionally done most of the household shopping. Surveys suggest that women make perhaps 80pc of consumers’ buying decisions. Of course, some men might retort that these Irish women are doing this with Irish men’s money.
Again this is not true and this is where the extraordinary contribution of Irish women to the economic growth rate and job creation becomes apparent – as too does the fact that Irish men are not only falling behind, but not pulling our weight in terms of GDP.
GDP – which is only the aggregation of all the little stuff that goes on in the economy – comes from three sources, from more people being employed and having more wages to spend, from using new technology or from an increase in the productivity of labour and capital due to new technology.
Since my mother was teaching back in the 1970s, when only 25pc of women had a full-time job, women have filled two new jobs for every one taken by a man. The biggest social change since then has been the fact that 51pc of women are now full-time workers. The figure for men has fallen from 85pc to 67pc. In 1970, women’s average wages were 47pc of men’s. Today it is 94pc.
The employment of extra women has not only added more to GDP than new jobs for men but has contributed more than either productivity or new technology. The huge increase in women graduates and the fact that they are doing better in the Leaving Cert would suggest that much of the increase in productivity comes from the 977,000 women in the workforce.
When we multiply the doubling of the amount of women in work and the gradual catch-up of their wages we can see where, in terms of the sexes, the growth rate of the Irish economy is coming from; it has come from Irish women, not Irish men.
If Irish women have been more important to the economy than men, how do we explain why there are no women board chairs or CEOs in any of the top publicly listed companies in the ISEQ index?
If women are more important to job creation and the economy than men, why are there so few women economic commentators? It’s time to change that – bring it on sisters!
David McWilliams writes daily on international economics and finance at www.globalmacro360.com