WUNRN
By Diane Elson, Professor of Sociology, University of
Essex UK.Diane Elson does not work for, consult to, own shares in or receive
funding from any company or organisation that would benefit from this article,
and has no relevant affiliations.
11 October 2012 - Since 2010, many
European governments have adopted austerity policies in an attempt to reduce
the budget deficits and increases in government borrowing that were caused by
the 2007/8 financial crisis.
They mistakenly believed cutting
the public sector would promote growth in the private sector, and in this way
bring down deficits and borrowing. However, cuts in public expenditure are not
very successful in promoting growth and reducing budget deficits and government
borrowing. They are, however, very successful in stifling economic recovery,
creating a second wave of recessions and increasing unemployment and
inequality.
Take the
However, when the David
Cameron-led Coalition government came to power in May 2010, it was decided to
accelerate the timetable for deficit reduction through an unprecedented
four-year programme of cuts to public services and welfare benefits.
As austerity policies began to
come into force, recovery of output and employment came to an end. By the
middle of 2012, the
In the 40 years preceding the
financial crisis, gender gaps in the
Women continued to have to take
responsibility for providing unpaid care for their families and communities,
but public services and welfare benefits made it easier for women to combine
bringing up children with having a paid job. Public sector employment played an
important role, as the gender wage gap was narrower in the public sector than
in the private sector and public sector employment policies were more
family-friendly.
The austerity policies are set to
undermine this progress and hit low income women particularly hard. Women’s
employment is more concentrated in the public sector than men’s, with women
making up about two-thirds of the
The austerity polices will hit
women’s incomes harder than men’s. Rises in direct taxes, cuts in welfare
benefits, increases in public sector pension contributions and freezes in
public sector wages will raise 8 billion pounds by 2014/15. Parliamentary
researchers have calculated that of this amount, men will pay 2.2 billion
pounds (26%) and women will pay 5.8 billion pounds (74%). So even though
women’s incomes are lower than those of men, they will pay more.
Lone mothers, generally one of
the poorest groups, will be hit hardest. Research by the
Single mothers will also be
hardest hit by cuts to expenditure on public services. Estimates by the UK Women’s Budget Group and Landman
Economics shows that lone parents — 95% of whom are women — stand to lose more
than four times as much as couples without children, who stand to lose least.
After lone parents, retired single women will lose the most, followed by
childless single women of working age.
The cuts to care services will
lead to extra demands being placed on women to provide unpaid care. Expenditure
on social care for frail elderly people and severely disabled people will be
cut by 20% from 2011/12 to 2014/15.
This compares to an overall cut
to expenditure on public services of 12%, which includes a cut of 8% to defence
funding. The number of frail elderly people in receipt of free home care fell
by 11% between 2010 and 2012. Their daughters and nieces will be expected to
provide most of the replacement care.
Reforms to the welfare benefit
system, designed to save money, are also set to undermine the financial
autonomy of low-income women and to reduce their incentives to take a paid job
if they have a partner who is in paid work. It’s no wonder
Anybody recommending austerity
policies as an appropriate response to current economic conditions needs to
explain why they think such policies will lead to prosperity.
The use of such measures in the
As more governments introduce
austerity policies, a new global slowdown is likely, with knock-one effects
even for countries which escaped quickly from the financial crisis.