Is Austerity Gendered?

Diane Perrons

• Éditeur: Polity
• Année: 2021
• ISBN:
  9781509526994
• Édition: 1
• Sujet: Economics
• Sous-sujet: Economic Policy

Austerity has dominated the policy agenda in the past decade. Although it appeared to end with the COVID-19 pandemic, a return to harsh cutbacks in the future cannot be ruled out.

In this incisive analysis, Diane Perrons shows that while austerity policies have devastating effects on people's lives, their gendered dynamics are particularly conspicuous: budget cuts have been overwhelmingly aimed at services used by women. She shows how the gender aspects of this economic and social catastrophe intersected with a range of other factors, making the experience of austerity very different for different groups - and highly unjust. Not only that, it undermined responses to COVID-19.

She finishes by critiquing the justifications for austerity policies and asks whether there are compelling alternatives that can re-invigorate economies and societies after the pandemic, and avoid a return to austerity. This compelling book will be essential reading for activists, policymakers and students of feminist political economy everywhere.?

1
Introduction: Austerity, Gender and COVID-19

At the time of writing the world is in the midst of a global pandemic caused by a highly contagious coronavirus: corona, or COVID-19.¹ This disease has resulted in hundreds of thousands of deaths worldwide, a dramatic decline in economic activity and unprecedented increases in public deficits and debt as countries respond to the immediate health crisis and associated economic collapse.

So why ask now whether austerity is gendered? There are two key reasons. First, the cuts in health and social services during the preceding era of austerity meant that societies were ill prepared for the pandemic; and, second, when the immediate health crisis passes, there are likely to be new rounds of austerity to pay back the public debt, and they will have all the gendered and discriminatory impacts outlined in this book, unless there is a profound change in economic thinking and policy. So it is critical to show how unjust and gendered austerity is and why policymakers fail to notice or take account of these injustices. Even more importantly, as societies attempt to rebuild after this crisis, it is crucial to recognise that there are alternatives to austerity that are much more likely to resolve the problems austerity is designed to address and more likely to lead to equitable and sustainable outcomes. As Arundhati Roy has argued, the world is facing a rupture and

a chance to rethink the doomsday machine we have built for ourselves. Nothing could be worse than a return to normality. Historically, pandemics have forced humans to break with the past and imagine their world anew. This one is no different. It is a portal, a gateway between one world and the next. We can choose to walk through it, dragging the carcasses of our prejudice and hatred, our avarice, our data banks and dead ideas, our dead rivers and smoky skies behind us. Or we can walk through lightly, with little luggage, ready to imagine another world. And ready to fight for it.²

In this book I consider the rationale for choosing a different world by demonstrating, in chapter 2, the gendered and unjust impact of austerity; by explaining, in chapter 3, how the economic thinking that justifies austerity is gendered; and by discussing, in chapter 4, some of the alternatives to austerity. My focus and perspective come from the global North, and especially from the United Kingdom, my own location; but austerity is a worldwide policy, often enforced by international financial institutions (IFIs) with parallel gender impacts, so I try to engage with the issue at a more global level by drawing on illustrations from elsewhere. In this introduction I outline what austerity is, the context in which it was introduced in the early twenty-first century and how the coronavirus crisis brought it to an abrupt end in 2020, but simultaneously created circumstances in which it is likely to be reintroduced.

Austerity can be defined as a conscious policy designed to reduce public deficits and debt by cutting public expenditure or raising revenue or both. ‘Public deficit’ refers to the annual shortfall between government expenditure and government revenue, while ‘public debt’ refers to the accumulation of deficits over time, or the long-term government debt. It is thought that reducing public deficits and debt through austerity programmes will secure economic stability, so that economic growth will resume. Almost always austerity is practised in ways that lead to cuts in public sector services, in public sector employment and in social protection – that is, in policies designed to reduce poverty throughout the life cycle; and all these cuts disproportionately disadvantage women, low-income people and BAME (black, Asian and minority ethnic) groups, all of whom are more likely to be reliant on the public sector for employment, services and supplements to low or no incomes.

The contemporary era of austerity began in 2010, when public deficits and debt had reached what was considered to be unsustainable levels. This happened after governments attempted to stimulate economies in the aftermath of the 2008 financial crisis, which originated in the United States and United Kingdom and left many banks and financial institutions with vast amounts of debt and unable to pay their creditors. Potential investors were unable to borrow; ‘ordinary people’ could not withdraw their savings and were said to be only two hours away from being unable to get cash from ATMs.³ As these economies ground to a halt, there were fears of a total economic breakdown not only in Europe and the United States but in many other countries, as the impact of the crisis was transmitted via international financial markets and trade.

In response, the major economies around the world – the G20⁴ – coordinated their activities, bailed out the banks and introduced stimulus packages to prevent economic collapse. The International Monetary Fund (IMF) supported these measures and urged governments to ‘follow whatever policies it takes to avoid a repeat of a Great Depression scenario’,⁵ a comment almost identical to the pledge made by leaders of the G20 in 2020 ‘to do what it takes’ to address the health crisis and economic collapse caused by COVID-19.⁶

So in 2008 the G20 agreed to spend vast sums of public money to bail out the banks and much smaller sums to restimulate their economies. Overall, 137 countries increased their public expenditure between 2008 and 2009 in order to fund the stimulus and to bail out the banks.⁷ The stimulus packages varied across countries, but generally included investment in physical infrastructure and support for manufacturing to increase male employment, which had been hit first by the crisis. Social expenditure designed to protect the most vulnerable was also increased, though to a lesser extent. South Africa, Finland and the United States increased their social spending by more than 40 per cent, the average being 24 per cent for mediumand low-income countries and 27 per cent for high-income countries, between 2008 and 2009.⁸ However, the size of the stimulus packages was completely overshadowed by the amount of public money lent to the banks. In the United States, the financial sector was given more than $5,000 billion, by comparison to just $829 billion received by the stimulus package – a sum equivalent to only 15 per cent of the bank’s handout. In Japan, the Republic of Korea and Australia, the stimulus programme was given 25 per cent of what the banks were given,⁹ while in Europe the banks received the equivalent of 36.7 per cent of European Union GDP, the stimulus programme only 1.5 per cent GDP.¹⁰

Bailing out the banks meant that there was a massive transfer of public funds to the private sector, that is, funds went from the public as a whole to banks, bankers and financiers, who were primarily responsible for the crisis. Ten years later this debt has been repaid fully only in the United States. Elsewhere the bailout is expected to remain a burden on the public for many years to come.¹¹ As Christine Lagarde, then CEO of the IMF, recognised, the bankers have enjoyed ‘impunity, at a time when real wages continued to stagnate’.¹² But, while the inequality was noted by the IMF, it has not been acted on in any significant way. For low-income countries states are asked to provide a social floor to protect women and the poorest people in society; but these requests, in contrast to economic measures, are not enforced.

Then as now, in the case of the response to COVID-19, the stimulus programmes (and bailout) increased public expenditure just at the moment when state revenues were going down as a result of declining economic growth and falling tax revenues, thereby leaving governments with rising public sector deficits and escalating public debt. In 2010, the IMF pointed to the ‘largest worsening of the fiscal accounts since the Second World War’ and observed that austerity – or, in its more euphemistic f...

Table des matières

• Cover
• Series Page
• Title Page
• Copyright
• Dedication
• Acknowledgements
• 1 Introduction: Austerity, Gender and COVID-19
• 2 The Gendered Impact of Austerity
• 3 The Austerity Deception: Gendering Economics
• 4 Alternative Futures
• Bibliography
• End User License Agreement