Opinion: No equal opportunity in job losses

[costargh]

No equal opportunity in job losses
    * January 31, 2009

Sacking women and migrants in a financial crisis is bad economics.

THE financial crisis has a knack for generating numbers so catastrophically large, they become meaningless. This week, in a single day, 75,000 jobs were lost in the US. That's about 50 newly unemployed people every second. Clearly, the human misery embodied in these dry statistics is widespread. But that doesn't mean it is evenly spread. Indeed, if the latest figures from Britain provide any guide, it isn't.

Those figures show that in the last quarter, full-time job losses have fallen disproportionately on women, who are losing their jobs at twice the rate of men. It's easy enough to explain this asymmetry. Is it not, after all, simply the rationality of the market at work?

The market does not recognise us as people with attributes such as gender, but as units of production. Naturally, some units are less productive, and more dispensable than others, and it is nothing more than rational to proceed by shedding them first. If those units happen to be female — with their counterproductive habit of having babies and taking maternity leave — then, in the market's reckoning, that's just too bad. Similarly, if the easiest employees to cull are in less senior areas such as administrative services or customer service — all areas dominated statistically by women — then so be it.

That suggests the discrimination at work here is structural and therefore more stubborn. It reveals how far the workplace was from gender equality in the first place. For all the gains we've made, this remains a realm where, in crude terms, men are essential and women optional.

But how far does the logic of the market go in reality? Sometimes the best way to tell is to look at where it admits an exception. So in that connection, let's consider another group of workers likely to be affected disproportionately during this crisis: migrants.

Partly they will suffer because many of the industries in which they work, such as construction in America or financial services in Britain, are presently shrinking rapidly. But there's a political dimension to this, too: when domestic economies shrink, the instincts of governments are to make corresponding cuts to levels of migration, thereby reducing competition for jobs. That is the experience of history. In the Great Depression, closed borders became internationally fashionable; and a similar phenomenon occurred in the 1970s when Germany, the Netherlands, France and Belgium were bracing for a recession.

Precisely this prospect worried UN Secretary-General Ban Ki-moon enough last October to inspire him to plead with developed nations not to raise their barriers against migrants. That was around the same time Australia's Immigration Minister, Chris Evans, said he would consider doing just that. Spain, meanwhile, is paying migrants to leave under a "plan of voluntary return", which gives them unemployment benefits in advance if they will disappear for three years. In America, deportations rose sharply last year.

It's worth asking why this should be the case. Remember late last year when the G20 and APEC declared their continuing faith in the global free market in the face of the economic storm? Twice in eight days then US president George Bush urged the world not to retreat into protectionism by erecting economic borders. Twice in eight days most world leaders nodded in agreement.

But here's the oft-forgotten thing about the free market: it assumes the free movement, not just of capital, but of labour. That is, it necessarily implies open immigration policies. And certainly, levels of migration have risen substantially in the era of economic globalisation, at least while times were good.

If we're committed to the idea of the global free market as a means of countering our present economic strife, now should not be the time to curb skilled migration. That would be a form of protectionism.

The flow-on effects could be serious for the global economy. Many developing nations, including the looming giants of India and China, rely significantly on the incomes of their people working abroad who send money to family back home. According to the World Bank, poor countries stood to receive at least $US283 billion from such remittances last year. About $US27 billion of that was headed to China. If that figure begins to shrink, so does China's level of consumption — and, as we've heard ad nauseam in recent months, Australia is riding on the back of China's consumption.

Alas, none of this is likely to alter the global contraction of migration. Public sentiment, from Britain to America to Russia is resoundingly hostile to migrant labour so the rationality of the free market looks set to be trumped by parochial politics in this case.

Isn't there a common lesson in this? In a financial crisis the axe falls on those who have played the least part in its creation — women and migrants.

No clear, consistent ideological principle seems to explain this, which suggests it has just as much to do with the differing values we assign to people.

It is difficult to resist the suspicion that the key determinant of winners and losers in this crisis will not simply be sound policy, it will be social power.

Waleed Aly lectures in politics at Monash University.

[brendan]

I agree with all of it except for the following:


Those figures show that in the last quarter, full-time job losses have fallen disproportionately on women, who are losing their jobs at twice the rate of men. It's easy enough to explain this asymmetry. Is it not, after all, simply the rationality of the market at work?


This point seems questionable since Prof Mark Merry noted last month that the opposite was true:
http://mjperry.blogspot.com/2008/12/unemployment-its-guy-thing.html
http://mjperry.blogspot.com/2008/12/2008-male-recession-gender-jobs-gap.html




The market does not recognise us as people with attributes such as gender, but as units of production.

And that is really it's beauty, it does not judge people according to their race or skin color, but rather how productive they are.


Naturally, some units are less productive, and more dispensable than others, and it is nothing more than rational to proceed by shedding them first. If those units happen to be female — with their counterproductive habit of having babies and taking maternity leave — then, in the market's reckoning, that's just too bad. Similarly, if the easiest employees to cull are in less senior areas such as administrative services or customer service — all areas dominated statistically by women — then so be it.

Nothing wrong there.


That suggests the discrimination at work here is structural and therefore more stubborn. It reveals how far the workplace was from gender equality in the first place. For all the gains we've made, this remains a realm where, in crude terms, men are essential and women optional.

That statement seems contradictory, at first you assumed that the market does not discriminate on the basis of gender, but now you some how conclude that it does. Both statements cannot both be true. By assumption there is no discrimination on gender. Further there is little reason to expect that productivity is distributed evenly across genders, races, etc.

[costargh]

That suggests the discrimination at work here is structural and therefore more stubborn. It reveals how far the workplace was from gender equality in the first place. For all the gains we've made, this remains a realm where, in crude terms, men are essential and women optional.

That statement seems contradictory, at first you assumed that the market does not discriminate on the basis of gender, but now you some how conclude that it does. Both statements cannot both be true. By assumption there is no discrimination on gender. Further there is little reason to expect that productivity is distributed evening across genders, races, etc.

I agree. When I read that it stood out to me as incorrect.