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Employment and Productivity - Essay Example

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The main thrust of the argument in this report is that more women should be encouraged and assisted to take advantage of educational and employment opportunities in order to improve GDP. The report looks at data produced by the United Nations Economic and Social Commission for Asia and the Pacific and Mr Kevin Daly, an economist at Goldman Sachs on America, Japan and Western Europe.
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Womenomics Revisited The main thrust of the argument in this report is that more women should be encouraged and assisted to take advantage of educational and employment opportunities in order to improve GDP. The report looks at data produced by the United Nations Economic and Social Commission for Asia and the Pacific and Mr Kevin Daly, an economist at Goldman Sachs on America, Japan and Western Europe.
The UN report estimates that somewhere between $42 billion-47 billion per annum is 'lost' due to female unemployment, with a further $16 billion-30 billion lost due to female educational underachievement. Meanwhile Daly claims that by increasing female employment rates to the same level as male employment rates, GDP for some of the wealthiest countries would improve.
Barriers to increased female participation include higher taxation rates (60% higher in Spain for women who are second income earners) and the lack of alternative child care options. The article suggests that there are potential advantages for increased female participation besides those already mentioned - such as lowered ratio of retired persons to working persons.
Daly argues that women in sophisticated societies where they are not penalised by the tax rate and/or poor alternative child care facilities (such as Sweden) tend to have more children than women who live in societies where this is not the case. Interestingly of the countries surveyed Italy, Spain and Japan have fewer women in work than the others. This may be due to sociological rather than purely economical factors. All three countries have a reputation for putting family above consumerism.
Whilst the arguments for increasing GDP make sense there is too little discussion of the social impact of more women going out to work. The truth is that working women tend to do two jobs - both as employees and as partners. Given that they invariably earn lower rates than their male counterparts there is no particular reason for them to jeopardise their work-life balance further by taking on additional hours.
It may well be true that equalising the playing field would improve participation rates, one has to ask how desirable is it for more people (male or female) to work full-time The assumption that increasing GDP is more important than work-life balance is highly contentious in itself.
Making Less with More
The question which arises after reading this article is, why is productivity so important Surely full employment is more employment The article does not purport to explain the relative importance of either term.
America is experiencing increased employment and wage growth, whilst perversely seeing a fall in productivity. In this scenario, inflation is predicted to increase with a subsequent negative impact on interest rates, savings and investments.
Throughout the period of the Iraq War (2003-to date) Americans have noticeably lowered their output per hour - as noted since 2004. The article discusses a number of reasons for this, but the most obvious one is missing - that due to the current incumbent administration and the war in Iraq business leaders have lost their confidence. They are simply not investing as much as they did in the late 1990s. Another reason of course is that innovation itself has topped out. For example, in the penultimate paragraph we are told that computer and software prices are not falling as rapidly as they did in the past, suggesting that firms operating in this sector are finding it harder to sustain competitive advantage through cost-cutting.
Womenomics revisited. Available at: Last viewed on 25 April 2007.
Making less with more. Available at: . Last viewed on 25 April 2007. Read More
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