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HomeNewsRuth Lea: There's more to women than boosting GDP

Ruth Lea: There’s more to women than boosting GDP


There is little doubt that women are making progress in the workforce. The ONS’s latest “Labour Market Statistics” showed that in 2013Q4 67.2% of women aged from 16 to 64 were in work, the highest figure on record. This compared with 66.5% a year earlier and 65.4% two years earlier.

In 1971Q1, when records began, the rate was just 52.8%. Incidentally the rate for men has been dropping – from 92.1% in 1971Q1 to 77.1% in 2013Q4. And women are assuming more positions of seniority. But, of course, we know too that in many of the higher echelons of life, whether in boardrooms or in the House of Commons, men outnumber women.

There is however a library of survey evidence to support the view that men and women have different preferences, ambitions and priorities in their lives – and not all of those preferences are determined by who looks after the children. The evidence on different career choices is clear for all to see. Very broadly and generalising madly, and other things being equal, men tend to favour money and power and woman tend to favour job satisfaction and flexibility.

Of course, men and women should have equality of opportunity and be paid equal pay for equal work. (I entered the workforce just as the 1970 Equal Pay Act was introduced, before which it was widely accepted that there was a moral as well as a legal case for paying women less than men.) But once gender-linked differential choices enter the equation, it is almost certain there will not be equality of outcome. To automatically regard the lack of equal outcomes as symptomatic of negative discrimination, either blatant or more insidiously “cultural”, is simply unsupportable.

Nevertheless, there is a place for reports and initiatives which seek to help women achieve their potential and/or help employers to help their women employees to achieve their potential. But, sensibly, they usually focus on the woman herself and her needs. The one glaring exception that has come across my desk in recent months is a report by the Women’s Business Council (WBC) entitled “Maximising women’s contribution to the future of economic growth”, released in June 2013.

The WBC was set up in 2012 to advise the Government on “how women’s contribution to growth can be optimised”. The aim of the WBC’s work was, therefore, to be to steer women into careers that would most readily translate into higher GDP, rather than go with the flow of women’s ambitions to develop fulfilled and happy people. And this is at a time when the ONS is not just expected to churn out the national accounts, but is also charged with estimating “new measures of national well-being”. (The aim of which “is to provide a fuller picture of how society is doing by supplementing existing economic, social and environmental measures,” a sad misallocation of scarce resources.) It is bizarre and all seems rather misguided. I began to wonder if I had misunderstood the purpose of the WBC’s exercise.

But no, may I quote the executive summary which carries this extraordinary claim: “…by equalising the labour force participation rates of men and women the UK could further increase GDP per capita growth by 0.5 percentage points per year, with potential gains of 10% of GDP by 2030.” I’m really not sure what the point of this sort of statement is.

If we all worked 60 hours a week or worked until we were 80, doubtless GDP per capita would rise. But, in a relatively prosperous country, it is accepted that there are diminishing (if not negative) returns to such activities. And, mercifully, people are left to make their own decisions, given their own circumstances. So why the WBC should seek to justify their (quite sensible) recommendations with this specious argument beats me?

And may I quote another insight from the report: “…if women were setting up and running new businesses at the same rate as men, we could have an extra one million female entrepreneurs. They are currently only half as likely to do this, and they and the economy pay the price.” Sorry, I don’t think they “pay the price”. They’ve made the decisions that suit them. And, as for the economy, it’ll do just fine.

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Ruth Lea
Ruth Lea
Ruth Lea CBE is economic adviser at the Arbuthnot Banking Group

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