| Recession 101: How We Got Into This and How it Affects Women By: Eunice Kim Economic recession is truly an unpleasant dinner guest, to say the least, especially for women and minorities since so many states and cities are forced to cut funding to the countless social services devoted to them. But before we get into that, let’s take a brief look into how we got into this mess. The National Bureau of Economic Research (NBER) defines recession as “a significant decline in economic activity spread across the country, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.” This may sound like a handful, but the main cause of recession can attributed to something as simple as unrestrained capitalism. For the past few decades, the U.S. economy has been characterized by producing more goods that what its consumers actually need. The root of this could be nothing more than human greed. When companies produce more goods we don’t need in order to rake in a bigger profit, waste happens, and it eventually becomes more expensive to produce things. The common result is inflation, which means that the prices of everything from handbags to gasoline skyrocket and people begin to spend less; and people spending less basically means companies make less money. Companies also become extra thrifty and hire less people, resulting in unemployment The Obama Administration’s reaction to our current depression is seen as rash by some and brave by others. Obama’s $787 billion economic stimulus package is meant to revive the banking sector. His hope is that with these subsidies, banks will be able to start lending again and that homeowners would be able to start taking advantage of the resulting low mortgage rates, leaving more money in their wallets. This plus Obama’s health care expansion plan are benevolent moves, though the Administration’s goal of pulling the nation out of recession by the end of this year seems like a pipe dream to the average American. Daniel Barbezat, Professor of Economics at Amherst College, took time to shed some light on how the recession has been affecting women. “Given the broad feminization of poverty over the past decades and the higher rates of social service utilization by minorities,” Barbezat says, “these changes have hurt these groups especially.” The damage inflicted by the recession is harsher than ever on American households since more and more families depend on working mothers for financial support. Believe it or not, even in America today, a woman’s income is seen as a kind of proxy for times when men’s wages are insufficient. Since women’s wages are not treated as a major source of funds, they are more at risk of being drastically lowered. Usually during a recession, women are harder hit than men because women are less well represented in state and local government services. It is true that more men are currently being laid off than women are. As a result, married women especially feel the pressure to make up for the loss of income and take more jobs, which is nearly impossible in an economy ridden with companies unable to hire. More and women are stepping up to the plate and controlling the spending that goes on in their families. According to Barbezat though, this newfound thriftiness is not necessarily a curse. “Americans have lived in an affluence little known in the history of the world,” he says. “Coping will have to include being grateful what we have had and what we currently have while recognizing that we can do well with less. It will also include being more aware of our interconnectedness to the rest of the world and how our consumption affect everyone else.” Professor Barbezat’s advice is tough to follow, but vitally refreshing. It is time we divorce ourselves from the materialism that our culture has swamped itself in, stop perceiving a weaker economy as something inherently negative, and allow this recession to teach us how to take greater control over what we spend on. |
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