University of Vermont

University Communications

Who Pays for Free Trade?

Often women. Associate professor Stephanie Seguino says economic growth and gender equity can coexist — but rarely do.

It’s late when Stephanie Seguino’s plane begins its descent into Hanoi. Viewing the city from the night sky, her wonder at being an American invited to critique the government’s economic reforms mingles with childhood memories of bombings on the news. The moment is profound, but it will be shadowed.

“I was really impressed with the Vietnamese,” says Seguino, who is stepping down as chair of economics to become permanent associate dean of the College of Arts and Sciences. “They have put this history behind them -- they are developing and moving forward.”

And yet, some change is slow. Even with a pro-business communist government eager to be part of the “East Asian miracle,” even with television cameras filming roundtable discussions with top party ministers, Seguino’s presentation on gender inequality is the only one that stirs the director of the Vietnam Academy of Social Sciences to speak.

“We have so many problems here,” he responds. “Why should we prioritize gender?”

Seguino learns afterwards that the director had twice crossed her topic off the list of panels; it was finally restored only after high-level advocacy from the United Nations who worked with VASS to organize the conference.

Global warning

Her answer to the question is fundamental. And it doesn’t rely on fairness, which she belives lacks the traction of arguments that appeal to self-interest. That females deserve lives free from violence, equal access to healthcare and other basic needs is a given of human rights. But Seguino is a macroeconomist. Her work looks at equity through a wide and pragmatic lens.

“The reason that it’s important for any government to take account of gender is that women have primary responsibility for care of children,” says Seguino. “All of the research shows that increased income for women in the household increases their bargaining power and the result is more income invested in children’s wellbeing and less on luxury goods like gambling or cigarettes or alcohol. And in the longer run for economic growth what that means is a more productive, well-socialized workforce…

“If we can agree on anything collectively as human beings it is our fundamental obligation as adults to care for children,” she explains. “But we’ve set up a system that makes it difficult for many children to survive and to thrive.”

Globalization is making that struggle worse. In recent work for the United Nations, Seguino studied the worldwide impact of liberalized trade and investment rules and found, in many places that have experienced rapid growth -- Hong Kong, Chile, Mexico, Taiwan -- that the gender gap in wages has widened. The new export jobs put women in a weaker bargaining position, she says, because firms are much more mobile. They play vulnerable workers in one community against those in another -- and poor country against poor country. Companies can pick up and go where the labor is cheap, the taxes low.

“Every region is different, partly because poor countries have been pitted against each other,” Seguino says. “How do they survive and compete? By exploiting their most vulnerable group and Asia’s done very well at that.” That means in Asia women have jobs, albeit very low-wage ones, making shoes and other cheap goods, but it’s come at the expense of women in Latin America and sub-Saharan Africa who are forced into informal kinds of labor like selling cigarettes and peanuts on the street.

The fallout for women and children from the new economic order is a grim reality Seguino addresses in speeches and in papers to the United Nations, the World Bank, policymakers, academics, and students. Her analysis is sweeping and complex, but when she talks about it, as she did at a campus event marking International Women’s Day in March, it sounds almost personal. Her calm delivery of her analysis has a chilling power.

“Stephanie has really opened up the field on economics and gender equality, influencing policy at the UN and increasingly getting noticed by economists from developing countries particularly in the global south,” says Caren Grown, senior scholar and co-director of the Gender Equality and the Economy Program at the Levy Economics Institute of Bard College. “You can’t assume what is predicted by neoclassical theory will hold. In fact, it doesn’t, and her work has really shown that.”

Working for women

But even as Seguino rejects the current rhetoric about globalization, the notion that simply promoting economic growth will send extra resources trickling down to women, she insists that with strategic macroeconomic policy, growth and equity not only can exist together, they will advance the whole community. Her argument is that you have to help firms become more efficient, invest in new technologies and train workers, lowering their costs so they can afford higher wages that will empower women.

“You have to get out of this low-wage, low-productivity trap,” Seguino says. “But frequently it requires both carrots and sticks for companies to treat workers in that way, especially women workers. All that requires an important role for the government in helping manage the economy… to promote high-wage industries, not export industries that are based on cheap labor.”

To spread that message, Seguino joined Grown and a small group of other likeminded academics in The International Working Group on Gender, Macroeconomics and International Economics with a grant from the MacArthur Foundation. The idea was to bring researchers from all over the world to integrate gender into economic growth theory -- before then, she says, gender was only viewed as a micro-level problem.

Since 2003, with a subsequent grant from the Ford Foundation, GEM-IWG has hosted an annual two-week intensive knowledge-networking workshop and conference at the University of Utah for researchers and policymakers -- last year’s attendees included ministers of finance from Laos and Mongolia, and officials from the governments of Nigeria and Argentina.

“It’s really quite extraordinary,” says Seguino. “They bring these issues back to their governments and their ministries and you begin to see gender inequality get more attention in terms of government programming… It’s a long-term process to educate people to think about the world differently, but then they become sensitized to it. We’ve come a long way in just ten years… People feel like it’s a breath of fresh air that there’s economics being done that has real-world applications, that’s addressing really serious problems from a different approach.”