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Three Steps to Women's Fair Share of the Recovery

Wednesday, January 28, 2009

The economic rescue plan must be bigger and more tailored to women says Susan Feiner. She speaks on behalf of a new group of economists, historians and other feminist scholars called W.E.A.V.E., or Women's Equality Adds Value to the Economy.

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The economic rescue plan must be bigger and more tailored to women says Susan Feiner. She speaks on behalf of a new group of economists, historians and other feminist scholars called W.E.A.V.E., or Women's Equality Adds Value to the Economy.
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Susan Feiner

(WOMENSENEWS)--Now that President Barack Obama is buckling down to business, it's time for women to do the same about the economic rescue program at the heart of his domestic agenda.

Early in November feminist economist Randy Albelda voiced concern about Obama's macho economic recovery plan, which faces its first test today with a scheduled vote before the U.S. House of Representatives. About a month later, the writer and lawyer Linda Hirshman made a similar argument in a New York Times op-ed.

These efforts helped spur a group of progressive economists, myself included, to form a group called W.E.A.V.E., Women's Equality Adds Value to the Economy.

In the past few weeks we have gathered over 1,200 signatures.

We are pushing three basic steps to help tens of millions of women--and their children--weather the stormy economy.

No. 1: Revive and enforce Labor Department regulations requiring affirmative action for all federal contractors.

No. 2: Set aside apprenticeship and training programs in infrastructure projects for women and people of color. Both groups are seriously underrepresented in the construction trades.

No. 3: Spend recovery money on projects in health, child care, education and social services.

Before going into detail on these three targets, let's also look at two over-arching problems with the current plan: Too meager, too male.

Oversights Begin With the Players

Addressing these problems must begin by adding fresh faces to Obama's economic recovery team; people who can "weave" the themes of this commentary into the overall economic planning.

Leading the way right now is Larry Summers, the new head of the National Economic Council. His nomination set off a collective groan among self-respecting women because he is by now notorious for questioning women's innate ability to "do" math and science when he was president of Harvard. To paraphrase economist Barbara Bergmann, to say that Larry Summers is not a feminist is like saying a Bengal tiger is not a vegetarian.

The administration's current advisors are also deficit hawks who have designed a rescue package that's just over 1 percent of GDP, or $850 billion. That's not enough. An adequate plan would be at least 10 percent of GDP, or about $1.3 trillion.

"Spending at these levels is critical for everyone, especially women," James Galbraith, a University of Texas professor of economics and government, and author of "The Predator State," told me.

Galbraith went on to say that generous federal support for states and localities--which are forced to balance budgets and have, as a result, been laying off workers and cutting back services--is the single most important thing for women's jobs.

Forty-four states have immediate combined budget deficits of $42 billion, according to the Washington-based Center on Budget and Policy Priorities, and in two to three years that could widen to $350 billion.

Unless the president and Congress step in, we could see wave after wave of collapsing local services. Direct care for children, the disabled and the elderly will disappear. Education and health will suffer massive cuts. These are vital community services and employ huge numbers of women.

Galbraith has also said women would disproportionately benefit from an increase in Social Security benefits since many more women than men depend solely on this form of retirement income.

The same goes for a payroll tax holiday. The deductions from paychecks for Social Security and Medicaid are highly regressive, hitting low-wage workers much harder. Workers play a flat payroll tax of 8.3 percent of income up to $106,800. Employers also pay 8.3 percent but most economists agree that this is passed on to workers as lower wages.

Doctoring the Sick Patient

Yes, all this means spending big money to restore health to the economy. But the patient is really sick. The housing sector is floundering, the financial sector is badly damaged, unemployment is historically high and rising.

Remember the mean, lean years of 1982 and 1983? Unemployment hit 11 percent in November 1982 and remained at or above 10 percent for most of 1983. Of the 103 million people in the 1983 labor force 10 million were without work.

Today's labor force is far larger, roughly 144 million people. If unemployment rates hit the levels of 1982-1983--and most economists agree it will--the number of people out of work will exceed 14 million.

Because today's labor force is so much larger, the current unemployment rate of just under 7 percent means the same number of people are out of work now as there were in 1982-1983 when the unemployment rate hit 10 percent.

All that places enormous pressure on the federal government to spend, which means that there must be much more federal borrowing.

Deficit financing is the only way to get households, states and localities, and private firms back on track.

Firms are only going to hire when they can sell what they produce. State governments are only going to hire when their sales and income tax receipts go back up. Consumers will only start spending once they have jobs and job security.

To get all that going again, the rescue plan has to be big enough. And it has to include women.

Three Big Issues

Which gets me back to the three big issues framed by W.E.A.V.E.

No. 1: Affirmative action plans:
These ensure that women and people of color are actually hired and trained for public-sector jobs. In the years since Bush took office, the number of federal contracts has risen sixfold. Spending has also gone way up, to almost $368 billion currently from $209 billion in 2000. Staff to monitor these contracts at the Equal Employment Opportunity Commission, meanwhile, dropped. In his inaugural address Obama talked about government conducting its business in the "light of day" and on his first working day in office he emphasized financial transparency. Government contracts are the place to put those sentiments into action.

No. 2: Infrastructure projects:
In 2003 only 4 percent of the roughly 400,000 registered apprentices were women. Scholars with expertise in these matters must be brought to the policy table so this gross discrepancy can be fixed. This is critical because while women hold 10 percent of construction jobs, most--5.8 percent--work in offices where wages are about 16 percent lower. Unless the Labor Department recommits to workplace integration--by gender and race--the jobs that pay a truly livable wage will not benefit women or people of color in proportion to their presence in the labor force.

No. 3: Spending on health care, child care, education and social services:
This spending both provides jobs to women and provides services needed by all families. The fastest-growing segment of the homeless population is families. Forty percent of requests for emergency shelter come from families. More than 85 percent of homeless families are headed by a lone parent, and most are women.

If states get enough federal money from Obama's program they can meet the challenges of homelessness. They can sustain school districts, reopen libraries, fund water purification programs, rebuild parks and expand reforestation efforts. They can funnel money to local nonprofits that teach work force skills and literacy and provide care for children, mothers and the elderly. They can shore up state public higher education, where rising tuition costs--up almost 40 percent in the past two decades--is putting college out of reach.

The proposed recovery plans fall far short in these three crucial areas. Women, and anyone concerned with economic justice, must demand more.

Susan F. Feiner is professor of economics and professor of women's and gender studies at the University of Southern Maine. Her blog, www.economics-she-wrote.org welcomes questions from readers about the sorry state of the world's financial system.