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EBRD Fearonomics podcast discusses cost of discrimination

EBRD Fearonomics podcast discusses cost of discrimination

 July 02, 2022

The European Bank for Reconstruction and Development (EBRD) invests in changing lives, a mission that couldn't be achieved without its employees. With colleagues coming from countries across the world, its workforce is as diverse as its portfolio.

The EBRD's latest episode of its podcast, Fearonomics: the cost of discrimination, discusses the cost of discrimination to the global economy.

At a time when we're living through the highest inflation in decades, a cost of living crisis and dramatically falling rates of growth, the Fearonomics podcast helps listeners to confront and overcome their fears about the global economy.

What is the cost of discrimination to the global economy?

Jonathan Charles, EBRD’s (former) Managing Director of Communications, Sergei Guriev, former EBRD Chief Economist & Professor of Economics at Science Po, and Beata Javorcik, the EBRD’s Chief Economist & Professor of Economics at Oxford University, discuss how to protect the world economy’s most vulnerable groups. They take a look at economic data, debunk myths and define the risks that need to be watched out for, and those that don't.

"In the year that we're witnessing recession, the highest inflation in decades, and the cost of living crisis, the rising inequalities and the looming dangers of new waves of discrimination, contribute to an already complex socio-economic tapestry which is around today. The pandemic has deepened inequality scars, the economic consequences of Russia's war on Ukraine threatens to make them even worse. What are the costs of discrimination to the global economy? How do we protect the most vulnerable groups? How do we stop them fearing discrimination?," says Jonathan.

The EBRD champions for equal opportunities

Despite the recent advancement in the equality of rights and inclusion, 45 per cent of American workers have experienced discrimination in the past year, according to Gallup.

"It is estimated that today's STEM industries have lost up to a 120,000 viable candidates due to the cumulative effects of anti-LGBTQ+ bias, and that is not even taking into account underrepresentation of women in the same industry," comments Jonathan.

"Discrimination is certainly a paralyzing force in the advancement of inclusion, and the hope of making workforces more resilient. It hurts both groups, the ones that are being discriminated against, and the ones that discriminate. It is important to address these injustices, especially in the tough economic times that we are living in," he adds.

The EBRD is committed to economic inclusion

The EBRD believes that an unequal distribution of economic opportunities in a country, when circumstances beyond an individuals’ control constrain their access to economic opportunities throughout life, has a significant detrimental impact on the growth potential of economies as well as their social cohesion and, ultimately, political stability.

When individuals are unable to make the best use of their skills and talents because they were born in a remote or climate change affected area, or because of their disadvantaged background or their gender, market outcomes are negatively affected. However, if people are given a chance to succeed, they are more likely to pursue education, participate in the workforce and invest or engage in activities that lead to economic growth and prosperity.

The World Bank’s Women, Business and the Law 2022 report states that around 2.4 billion women of working age lack equal economic opportunities and 178 countries maintain legal barriers that prevent their full economic participation.

In early 2022, the LGBTQ+ advocacy group HRC Foundation published a study showing that LGBTQ+ workers in the US earn about 90 cents for every dollar earned by a typical heterosexual worker.

"If men and women, or whites and ethnic minorities, have a similar distribution of skills, then discrimination is inefficient from the economic point of view. That's because talented women and minorities cannot pursue professions in which they can contribute the most to the economy. Eliminating indiscrimination therefore leads to faster economic growth," says Beata.

"Consistent with this view, new research shows that a large share growth in the US GDP per capita between 1960 and 2010, can be explained by an improved allocation of talent," she comments.

"Interestingly, most of the effect comes form elimination of barriers to education," adds Beata.

Employer backing gender equality

The EBRD recognises gender equality as a key driver for sustainable transition and inclusive growth across its regions and believes that equality of economic opportunity for women and men is a key element of a modern, well-functioning market economy and essential for sustainable growth.

"Discrimination is not only costly for those who are being discriminated, it is costly for everybody. If a talented representative minority, or a talented woman, cannot pursue their occupation, their career aspiration that this person is likely to succeed in, then the whole society loses, and in that sense, discrimination is very costly," says Sergei.

"There are estimates that improving all the way to gender equality can bring the global economy ten trillion dollars a year, that's almost 10 per cent of global GDP. And the reason for that is very simple. Women are paid about 20 per cent less than men today as we speak, in the current world, and women are half of the population. So simply making women 20 per cent more productive by eliminating the barriers, can actually reduce those gaps and create additional economic opportunities, not just for the women, but also for the rest of humanity," comments Sergei.


Work for an employer promoting inclusion and equality

Gender equality is an integral part of the EBRD's commitment to promoting sustainable and inclusive market economies through its project and policy activities.

Search the EBRD's career opportunities.

 

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Disclosure: Where Women Work researches and publishes insightful evidence about how its paid member organizations support women's equality.

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