Solving the economic crisis

The Irish Times has a tongue-in-cheek parody that is based on a false premise, but isn’t actually unsound from a macroeconomic perspective:

Does the woman in your life really need a job? Admittedly, this is not a fashionable question. From Iceland to Australia, men are blamed for causing the credit crunch, while a more feminine approach to finance is proposed as the solution.

Of course there will always be a place in the world of business for exceptional women. Women also have an important role to play in jobs that are too demeaning for men, like teaching. But the general employment of women is another matter. Indeed, working women almost certainly caused the credit crunch by bringing a second income into the average household, pushing property prices up to unsustainable levels. Whether working women actually caused the credit crunch is now a moot point. The point is that removing women from the workforce would mitigate its effects….

It would be ludicrous to suggest that women should be sacked purely to give men their jobs. In many cases, their jobs should be abolished as well. Women are twice as likely as men to work in the public sector. They account for two-thirds of the Civil Service and three- quarters of all public employees.

It’s simply not true that women caused or even exacerbated the credit crunch, (except, of course, for Blythe Masters, the woman who invented the credit default swap), but it’s true that getting rid of three-quarters of the jobs in the public sector would be economically desirable. But the only direct effects from that the entry of middle-class women into the workforce, (lower class women representing about a third of the female population always worked), are lower average wages and reduced productivity. While there were certainly a wide variety of social effects that have had an impact on the economy, such as an increase in the divorce rate leading to an increased demand for housing, they are derivative effects that usually involve one or more additional factors.