What happens when women run the economy? the world is about to find out

By Andrea Shalal

WASHINGTON, Apr 6 (Reuters) – Women now hold many of the jobs that control the world’s largest economy, and they are trying to improve it.

Treasury Secretary Janet Yellen, Commerce Secretary Gina Raimondo, and Commerce Chief Katherine Tai hold senior positions in US President Joe Biden’s administration, and many of his economic advisers are also women, as as did nearly 48% of confirmed cabinet-level officials.

The sea change may already be affecting economic policy: A new $ 2.3 trillion spending plan unveiled by Biden last week includes $ 400 billion to fund the “care economy,” supporting home-based jobs and in the community who take care of children and the elderly, a task normally carried out by women and which has not been recognized in previous years.

The plan also includes hundreds of billions of dollars more to correct racial and rural-urban inequalities created in part by past economic, trade and labor policies.

Yellen says the focus on “human infrastructure” and the previous $ 1.9 trillion bailout bill should translate into significant improvements for women, whose labor force participation had reached 40-year lows even before the crisis.

“In the end, this bill may go back 80 years of history: it begins to fix the structural problems that have plagued our economy for the past four decades,” he wrote on Twitter. “This is just the beginning for us,” he added.

Women leaders can bring a fresh perspective to economic policy, experts say.

“When you’re different from the rest of the group, you tend to see things differently,” said Rebecca Henderson, a Harvard Business School professor and author of “Reimagining Capitalism in a World on Fire.”

Continue reading the story

“You tend to be more open to different solutions,” he said, and that’s what the situation calls for. “We are in a moment of enormous crisis. We need new ways of thinking.”

EMPATHY AND STABILITY

In the last half century, 57 women have been presidents or prime ministers of their countries, but the institutions that make economic decisions were largely controlled by men until recently.

Outside the United States, Christine Lagarde heads the European Central Bank, with a balance of 2.4 trillion euros; Kristalina Georgieva at the International Monetary Fund, with a credit power of $ 1 trillion, and Ngozi Okonjo-Iweala at the World Trade Organization, all of them in positions that until a decade ago were held by men.

In total, there are women at the helm of the ministries of Economy of 16 countries, and 14 central banks of the world, according to an annual report prepared by OMFIF, a think tank on central banking and economic policy.

The few measures available suggest that women perform better in managing complicated institutions during crises.

“When women participate, the evidence is very clear: communities are better, economies are better, the world is better,” Georgieva said in January, citing research compiled by the IMF and other institutions.

“Women are great leaders because we show empathy and stand up for the most vulnerable people. Women are determined (…) and women may be more willing to find a compromise.”

A study by the American Psychological Association showed that US states with female governors had fewer deaths from COVID-19 than those led by men, and Harvard Business Review reported that women scored significantly better on 360-degree assessments of 60,000. leaders between March and June 2020.

Women represent less than 2% of CEOs of financial institutions and less than 20% of board members, but the institutions they lead show greater resilience and financial stability, according to IMF research.

Eric LeCompte, a UN adviser and executive director of a nonprofit organization that advocates for debt relief, said he noticed a clear difference during a meeting with Yellen and leaders of Christian and Jewish religious groups last month.

“I have been meeting with the secretaries of the Treasury for 20 years and their points of discussion have been totally different,” he said. “In every area we discussed, Yellen emphasized empathy and the impact of policies on vulnerable communities.”

His male predecessors had an “essentials” approach that focused first on “numbers, not people,” and never used words like “vulnerable,” he said.

A LOAD FOR WOMEN

The stakes are high.

The global recession related to the coronavirus pandemic is actually a “women’s” one (she-session), many economists say, because of how much it has affected them.

According to a recent McKinsey study, women account for 39% of the world’s workforce, but 54% of job losses. In the United States, half of the 10 million jobs lost during the COVID-10 crisis were held by women, and more than 2 million of them have left the workforce entirely.

Returning these women to work could increase gross domestic product by 5% in the United States, 9% in Japan, 12% in the United Arab Emirates, and a staggering 27% in India, the world’s largest democracy. according to IMF estimates.

The rise of female leaders should lead to “a more inclusive response – in the true sense of the word – to the many, many challenges that are the legacy of COVID,” Carmen Reinhart, chief economist at the World Bank, told Reuters.

Tai, the first non-white woman to head the office of the US Trade Representative, has told her staff to think “outside the box,” embrace diversity, and speak to communities that have long been ignored. .

Okonjo-Iweala, the first African to head the World Trade Organization, which oversaw trade flows of nearly $ 19 trillion in 2019, said addressing the needs of women will mark an important step toward rebuilding the deeply eroded faith in the world. government and global institutions.

“The lesson for us is to (make sure) that […] Let’s not get down to business as usual, “said Okonjo-Iweala, who was also Nigeria’s first female finance minister.” It’s about the people. It’s about inclusion. This is decent work for ordinary people, “he told Reuters.

(Repore by Andrea Shalal; additional report by Karin Strohecker; Edited in Spanish by Javier López de Lérida)