Zoe Rogers, ‘Doah Staff Writer
January 29, 2014
Monday, Jan. 6 marked a significant moment in the Federal Reserve System’s 100-year history when it’s first female chair, Janet Yellen, was appointed on a 56-26 majority vote. Currently the vice-chair of the Fed, Yellen is expected to begin her term as chair on Feb. 1 following Ben Bernanke’s retirement from the position.
Yellen is more than qualified to lead the world’s most powerful central bank. An economist at the forefront her field, Yellen has served for 36 years within the Fed and is praised not only for her record of accurate economic predictions but also for her refreshing human approach to economics. It is therefore not surprising that she was so passionately backed by a group of Democratic senators who wrote a letter to President Obama calling for her nomination.
Yellen joins Christine Lagarde, managing director of the International Monetary Fund, and Angela Merkel, German chancellor, as one of the most influential women in global economy. With three of the most powerful positions in global economic policy occupied by females, it is important to note the role that women play in the recovery, growth and sustainability of the global economy.
In discussing the role of women in the economy, the line is not drawn at economic leaders such as Yellen and Lagarde. It is argued that addressing gender inequality in the workplace will lead to greater economic growth. A Goldman Sachs report calls it a “virtuous cycle,” whereby “gender equality supports economic growth and growth reinforces gender equality gains.”
Women still face a glass ceiling in leadership roles not only in banking but in commercial and corporate practices. Yet there is evidence that women in positions of leadership have a positive impact on companies overall performance. A Thomson Reuters report stated that firms with women in leadership roles demonstrate both better performance and higher profits.
Globally, investing in the economic empowerment of women yields high returns. An IMF staff discussion report claims there exists ample evidence that shows significant macro economic gains are possible when women are allowed to reach their full labor market potential.
The report recognized that the global economy has lost out on 27 percent potential GDP growth per capita due to the persistent gender inequality. It goes on to state that allowing women to earn and control income directly impacts the economic development of developing nations. Another “virtuous cycle” exists whereby women earn, their income is used to educate more girls and as a result girls have more educated women as role models.
In developing countries, microfinance projects and cash transfer schemes are aimed at women. Why? Well, as UN Sustainable Development Solutions Network report found, women are perceived as “good with money,” therefore more likely to repay, and their spending priorities focus on family welfare and the education of their children.
The importance of women in global economic growth has not gone unnoticed. The G20 Leaders Declaration in 2012 committed to taking positive steps to overcome the “barriers” hindering women’s economic participation.
These “barriers” take many forms. In First World nations, perhaps social perceptions and stigmas remain the biggest barrier. In 2011, Deutsche Bank’s chief executive came under fire for his comments regarding how appointing more women to it’s board would make it “prettier and more colourful.” An off-hand comment that, sadly, reflects the sexist stigmas that diminish the achievements and qualifications of women in leadership roles.
In developing nations, these barriers take much more drastic forms. A World Bank report found that a lack of basic necessities and rights inhibit women from either joining the labor force or becoming entrepreneurs. Extreme poverty, violence against women and political instability have prevented developing nations from utilizing half of their population to sustain their economy.
TEDxWomen reporter, Gayle Tzemach Lemmon questions why women in the global economy are still treated as “exceptions” when they constitute around 50 percent of the earth’s population. It took 100 years for the world’s most powerful central bank to appoint it’s first women leader, yet this pales in comparison to the economically immobile women of developing countries who remain voiceless after centuries. In the twenty-first century, economic growth calls for the long over-due economic empowerment of women.