Feminomics: Why Gender Matters in Macroeconomics, as in Real Life

03/18/2010 05:12 am ET | Updated May 25, 2011

From an economic standpoint, will 2010 be the year of the woman? As part of the Roosevelt Institute's ongoing 'Feminomics' series, running on the New Deal 2.0 blog, I was asked to reflect on women's changing roles in the economy. Here's my take on why macroeconomists must consider the role of gender in policy-making.

When most economists talk abut "economic agents," they are conjuring up bodiless, genderless automatons who naturally have no biological predecessors, do not carry babies, do not give birth, and do not face questions of physical survival and human development. So it is easy for them to look at double-digit unemployment rates and deflationary pressures on wages and benefits simply as market phenomena while ignoring that such things actually threaten the physical survival of families. It is not surprising that in crises like ours, macroeconomic policies stemming from such dehumanized conceptions of the economy do not address the majority of people's hardships -- and end up being inhumane indeed.

That is why the objective of macroeconomic policies should be maintaining social provisioning (serving the needs of the community), as opposed to temporary fine-tuning the economy or arbitrary indicators such as government debt to GDP ratios. However, real-life concepts like social provisioning, care, and parental bent (concern about the survival of those unable to function on their own) are irrelevant in a genderless and thus lifeless world of economic avatars. So naturally these do not come up too often when experts are analyzing the macro-economy.

Yet, we hear constantly about "the future of our children" being jeopardized by growing federal deficits and "unsustainable" government debt. The various errors in the notion that the US government is on the road of bankruptcy have been discussed well elsewhere. When those who worry in the abstract about the debt "burden" of federal expenditures on our children, they forget that our youth's and children's present is jeopardized by the burden of private debt born by US households. Unlike the sovereign US government, US households (even if they really put their minds to it), cannot sustain indefinite indebtedness. For one, they are not the sovereign issuer of the currency, and second, they are not inorganic entities without a life-span. It is often forgotten that just the opposite is valid for the State, let alone that the government debt is necessarily the private sector wealth.

I will point out what is obvious to everybody, and yet is left out of economic analysis and public discussions -- today's households' finances affect their ability to sustain their lives and reproduction. Truly, money is not everything, and households always engage in non-market, unpaid activities such as childcare and care for the ill and sick. This is even more true during economic downturns when incomes evaporate. Yet, there is a biological and social limitation to the seemingly bottomless labor of love. When larger numbers of households find themselves in financial dire straits, we cannot rely on "helping each other" as a solution for making ends meet while being hysterical about reducing the government deficits.

As pointed out by feminist economists, this way of thinking has been traditionally grounded in the assumption that women will always be there to bail us out, so to speak, with their unpaid labor and care -- out of duty and/or out of love. And even though more men than women are losing jobs in today's crisis -- and may indeed take on domestic chores and care giving -- the question still remains.

Do the proponents of private markets, and government deficit worriers understand that they assume there always must be somebody performing the unpaid and humane labor of love to secure the livelihoods of households in crisis? More interestingly do they understand that especially in crisis these people must be super-moms/dads/grandparents?

We should think over the ideal of super-families, who even with evaporating jobs, incomes, health insurance, and savings can still somehow be the savior of last resort and take care of loved ones, as well as to preserve communities. Genderless macroeconomic thinking embraces this popular self-deception, and is not appropriate for real-life. Thus, knowingly (to economists) or unknowingly (to casual commentators), these families indeed are supposed to resemble the non-biological beings inhabiting the lifeless macroeconomic models.

What are the consequences of moving on? For one, it is time to stop and to question the seriousness of the idea that we can get out of this crisis of social provisioning without growing government deficits. These deficits, however, need to directly address the reasons for financial hardships of living and breathing people. The most crucial step is permanent government job guarantee at a minimum wage. This is really a minimal institutional change to the current system that could reduce the burden to real-world households -- most of which, it is safe to assume, do not live in a virtual world and do not have super powers.

This post originally appeared on New Deal 2.0.