to interview Linda for this book and she talked about the cost of not focusing on women, and gave the specific recent example of the pandemic Shecession of 2020.
DEFINITION: The Shecession (from the Skimm) is the economic downturn that disproportionately affected women. Especially women of color. Not only are women more likely to work in hard-hit industries like hospitality and leisure, but many left their jobs due to lack of childcare.
From Linda:
From an economic perspective, those who run the world's economies are chasing growth (they want the economies to grow). Right now governments are trying to recover from the economic impact of the pandemic and for the most part they've ignored the special needs of women. It has been manifestly evident throughout the pandemic that women are suffering to a different degree and for different reasons than men, and obviously will need different solutions. And rather than deal with those needs, they are being pooh-poohed and set aside.
It's pretty ridiculous because on average, in the global economy, women contribute just under 40% of GDP and in the United States they contribute at least 40% of the GDP20 and make up more than half the workforce. In 41% of families, women are the primary breadwinner. And if women decided to form their own country, they'd immediately be big enough to join the G7 (the world's seven largest developed economies). When you're trying to kickstart an economy it doesn't make sense to ignore women!
Women are the world's most valuable wasted resource.
Linda's book starts with the Gloria Steinem quote, “The truth will set you free, but first it will piss you off.” Yep. Feeling that. But Linda shares some concrete actions we can take. We'll get to those shortly!
Women's Economic Opportunity and GDP
Each dot on the graph shown here represents a country's Women's Economic Opportunity Index score as related to GDP. There are approximately 100 nations shown in the graph; all those for which the data was available were included. In the graph, the upward-right direction of the dots indicates that more economic freedom for women corresponds positively to GDP per capita. Other data has converged to reach the same conclusion.
Sources: World Bank Database for GDP at purchasing power parity; Economist Intelligence Unit for the Women's Economic Opportunity Index; World Economic Forum for the National Competitiveness Index.
DEFINITION: Gross domestic product (or GDP) is the most common method to track an economy's health. GDP represents the value of all the goods and services produced over a specific period of time within a country. A recession is measured as two quarters of negative GDP growth.
We Need Women to Be Wealthy
You know I believe this to my core. This is why I do the work that I do. I believe that getting more money into women's hands will solve many of the problems we see in the world today. A lot of brilliant experts (including Linda) agree with me.
Farnoosh weighs in: “When women are wealthy they have more financial agency. They can make decisions for themselves and get out of bad situations. We have to remember that we are still living in a sexist patriarchal world so we need money to help us combat those external headwinds.”
Women invest 90%21 of their income back into their families, compared with 35% for men. When women have more wealth it's better for children, it's better for families, it's better for companies, and it's better for the economy as a whole.
What Needs to Happen to Close These Gaps
The following are some of the proposed policy reforms that came up over and over again in my conversations with experts, but this list is by no means exhaustive. For more resources, head to the Financial Adulting toolkit.
Raise the Minimum Wage
80% of minimum wage workers22 are adults, two-thirds are women, and almost 25% are women of color (who make up 17% of the population). Raising the minimum wage to $15 would more than double the earnings of over 700,00023 women and give substantial raises to millions more. Now that's wage gap progress. In raising the minimum wage, it's critical to include people with disabilities. In most states, corporations are legally allowed to pay people with disabilities well below the minimum wage. Many politicians are working on eliminating this law.
Cancel Student Loan Debt
Student loans are a women's issue. Women have two-thirds of all student loan debt24 and the student loan debt burden disproportionately affects women of color. Linda says, “Women have to take out more debt in order to get the same jobs as men. And then they have to pay back the loans at a lower salary than men.” Alleviating some or all student debt is a way to remove the burden and level the playing field.
Tax the Super-Wealthy
I use the term super-wealthy because people are often worried that an increase in taxes will affect them. Most experts I spoke with were focused on taxing the richest people, people who bring home millions and millions or have net worths in the billions. This would allow for more programs to invest in underserved communities.
Farnoosh says, “I do find it problematic when the 50 richest Americans have as much wealth as half the U.S. I believe in the redistribution of the dollars in this country with the goal of supporting equity. I believe in taxing the rich more than others. I don't believe in trickle-down economics. I think the rich ought to pay a higher percentage in taxes and the government needs to give the working class a realistic opportunity to achieve wealth by reducing their taxes, and giving them more free access to things like healthcare, food, and housing.”25
Pay Reparations
In Mehrsa's book she writes about reparations: “An essential first step in dealing with the wealth gap is to acknowledge that it was created through racist public policy. Full justice demands a recognition of the historic breach of the social contract between America's constitutional democracy and Black Americans. And contract breach requires a remedy.” She doesn't recommend any remedy specifically but says we should encourage our policymakers to come up with “creative proposals that garner full and meaningful financial inclusion that reverse the effects of historic exclusions from wealth creation.”
Mandate Paid Leave
Caregiving responsibilities disproportionately fall to women and due to these responsibilities, combined with a lack of paid leave (almost one in four mothers have returned to work within two weeks of giving birth26), women are often forced to spend time out of the workforce. Research shows that workers can expect
