Sexism Hurts Global Economy IMF Chief Says

March 10, 2016Global Challengesby EW News Desk Team

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Around the world, while women have gained significant ground on the issue of equal treatment under the law and norms of society, they still are not treated the same as their male counterparts in many economies. Christine Lagarde, head of the International Monetary Fund (IMF) says, “Inequality is sexist,” and argues that it actually hurts global economic growth.

Speaking at a forum organized by the Albright Institute at Wellesley College, Lagarde delivered her remarks in honor of International Women’s Day. As she noted, while conditions have largely reached a nearly even footing in much of the developed world, in many places women still struggle to receive an education, open financial accounts, own property, or find work.

According to Lagarde, this represents an enormous untapped resource pool, and excluding these people simply based on their gender robs the world of trillions of dollars of productive output each year.

Citing a study by consulting firm McKinsey, the IMF chief noted that the world’s economy would grow an impressive 25% by 2025 (more than $28 trillion) simply by allowing these women to have the same opportunities as men. To put that figure in perspective, that is a number roughly equivalent to the current output of the U.S. and Chinese economies combined.

Despite their relatively even footing in the developed world, women still suffer some inequalities. In general, women still are paid less on average than men for doing the same job are, and they continue to face barriers to their admission to the work place. Lagarde suggests that even the powerhouse economies of the world, like the U.S., China, Russia, and Japan, could benefit by improving these conditions and further reducing inequality, because these nations face huge worker shortages as the Baby Boomer generations prepares to retire.

While remedying the problem from a legal standpoint is not terribly difficult, fixing the attitudes that underpin these inequalities is. Many still feel women are best suited to serve as caregivers for their children and limited access to affordable childcare and tax penalties for married couples with two wage earners serve to underscore that problem.

"The bottom line is it really revolves around some cultural changes," Lagarde said Tuesday.

In developing countries, the gaps tend to be far wider. In many cases, women lack basic human rights compared to their male counterparts. In fact, according to the World Bank, only about 25% of women in developing countries have access to bank accounts and financing resources.

In support of her argument that equality between the genders is better for the economy, Lagarde sites Peru. In the 1990s, Peru abolished discriminatory laws against women, and it has enjoyed an impressive economic boom led, in large part, by the strong influx of women into the workplace.