Personal Wealth Management / Interesting Market History
This Summer’s Sheconomy Is Nothing New
Despite widespread coverage as if it is news, women’s economic contribution was always there—data just didn’t reflect it very well.
Hmmmmm. According to a very long Wall Street Journal feature last week, women are finally the driving force behind US economic growth[i] … thanks to the wild popularity of Barbie, Taylor Swift’s Eras tour and Beyoncé’s Renaissance tour.[ii] Not just via ticket sales, but courtesy of the multiplier effect from all the associated travel and costuming. Several pieces have touted great huzzahs for womankind’s apparently newfound economic power, but I am perplexed. For one, it commits a popular recent fallacy: overestimating event spending’s economic impact (and, by extension, its stock market influence). But also, it seems profoundly wrong on women’s economic contributions, which have been mighty for all of human history. The real story here is simply that data didn’t always capture it.
For this, we can primarily blame the construction of gross domestic product, better known by its initials, GDP. This figure attempts to tally all national output or expenditure, depending on the approach, creating a measure of the flow of economic activity. The general framework is usually credited to an economist named Simon Kuznets, whom the US government tasked with creating economic measurements in the wake of the early 1930s’ economic crash. Back then, the Depression’s damage was obvious to anyone observing their general surroundings, but there was no measurement system to gauge the extent of it and how it compared to prior downturns. So Kuznets got to work, doing what the powers that be asked, and in 1934 he presented the fruit of his team’s labors.
He did so with no small measure of displeasure and caveats: These national economic accounts, he warned, didn’t capture all of the country’s economic activity. A chief gripe of his: The measurement omitted the “services of housewives and other members of the family,” devaluing what, at the time, was many women’s chief economic contribution.[iii] Unpaid care and domestic work, by definition, don’t involve financial transactions, so there is no way for this to count in the expenditure approach to GDP. And government surveyors would hardly go door to door every quarter asking every housewife to report how many garments she sewed and mended, how many meals she cooked or how many hours she spent educating her children, nursing them while sick, cleaning the house, tending the garden and everything else a housewife might be responsible for. Today, working mothers worldwide know these tasks aren’t cheap. As loads of reports illustrate lately, childcare and household services are through-the-roof costly, which also makes a lot of sense, given the tasks they are engaged in. It is all very high-value, but because it amounted to money saved rather than money spent, it went uncounted in GDP.
Society has since changed, with women’s labor force participation jumping throughout the 20th century and women’s discretionary spending contributing to GDP. But here, too, this isn’t a new phenomenon, and focusing on Barbie and female pop stars’ concert tours is myopic and reeks more of stereotypes than reality. For one, if all the articles on the subject are any indication, plenty of men and kids saw Barbie. Two, women’s interests and spending are pretty darned varied, even at the major event level. I haven’t participated in any of this summer’s major “female” events, but I went to the Formula One grand prix in Austin last year. An observation: There were a heck of a lot of women and girls there. Not just there, but decked out in team kit. Going back further, when my mom and I were Oakland A’s season ticketholders in the mid-2000s, the crowd was gender balanced, with plenty of spending from both sexes cascading to hats and Eric Chavez t-shirts. And I am old enough to remember when the Women’s World Cup final sold out the Rose Bowl in 1999.
Here is some boring reality: Female discretionary spending isn’t new. Back in the 1980s, Young Elisabeth’s mom bought her many Hot Wheels, Go-Bots and baseball cards (no Barbies for me). That was discretionary! High School Elisabeth had an after-school job and gave plenty of economic stimulus to record shops, bookstores and vintage clothes dealers. Present-day Elisabeth travels, sews her own clothes (thus giving lots of stimulus to her locally owned fabric shops), loves attending car races and never passes up a coffee shop or antique store.[iv] And it isn’t just my generation! When she was a girl, my mom stimulated the economy with model horses, painting supplies, a slew of non-essential goodies and Beatles paraphernalia. (I hear she was not exactly alone on that last point.) My beloved grandmother was a shopping queen in her heyday, never missing Foley’s Red Apple Sale in Houston. She generated an astounding amount of uncounted economic activity as a housewife and mother of four, but she made plenty of measured economic contributions, too.
This isn’t a knock on the Journal reporters and others who have discussed this summer’s “trend.” The Journal piece was a fun read, and mixing pop culture with economics and finance is a rare treat for all of us in this business.[v] But don’t equate a fun read with being airtight proof that event spending is the be all, end all of women’s economic firepower or that said firepower is somehow new, long-awaited and a sign of the times. Fact is, that firepower has always been there, even if not in a manner the data captured, and discretionary spending is a whole lot broader than two concerts and a movie. Don’t take my word for it: Just look at all the stocks in the S&P 500 and MSCI World Index’s Consumer Discretionary sectors. Spending at the totality of these businesses, year-round, is what makes things go (and generates earnings and returns).
[i] I will confess surprise that no one has (wrongly) dubbed it a sheconomic boom.
[ii] “Women Own This Summer. The Economy Proves It.” Sarah Krouse and Anne Steele, The Wall Street Journal, 8/10/2023.
[iii] “What Is the Value Of Household Work?” Bureau of Economic Analysis, 6/11/2012.
[iv] She also buys about 10,000 lbs of coffee per year, but one could argue this is essential, not discretionary, spending.
[v] This article is Exhibit 2.
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