Meet the 24-year-old putting a human face on the economics of the pandemic
Recently, Mary Jo Vergara, the newest addition to the Kiwibank team of economists, was introducing herself and her sister at a social event.
“I said: ‘I’m an economist, and my sister is in medical school.’
“And they said: ‘Oh, so, you like money and she likes people.’
“And I was horrified. That’s so wrong.”
Economists like people too.
Or this one does.
“There’s something different about Mary Jo,” says emeritus professor Tony Endres, Vergara’s Masters’ supervisor at the University of Auckland. “A combination of a cool head and a warm heart she didn’t lose at university.”
Is that so surprising?
“Usually after five years doing economics, most of the idealism and warm-heartedness students have when they arrive gets crushed out of them. They come out as technically dry, data-driven, cool, detached. They lose the feeling for the people behind the data set.”
The ones who haven’t lost the softer touch go into areas like marketing, political science or sociology, Endres says.
They don’t become bank economists.
A reluctant economist
“Actually I didn’t want to become an economist,” Vergara says. “At high school I wanted to focus on history, English, or classics. I hid economics on the list of possible subjects when I showed my dad; I knew he’d want me to do it.”
He did, Vergara fessed up, and begrudgingly took the class.
“I sat at the back; I had no interest in it.”
And then there was a test – on ‘the law of demand’; (‘supply’ comes later). And much to her surprise, Vergara got top marks.
She also got glory, a gummy bear prize, a significantly increased appetite for her economics class, and self-recognition: she had a strong competitive streak.
“It was a turning point. My interest was sparked, knowing I was good at it.
“I showed my dad my marks. He said ‘I thought you’d like it’.”
That’s dads for you.
“These are days it’s exhilarating to be an economist.”
Fast forward a decade and MJ, as they call her at Kiwibank, has many of the enthusiasms you’d associate with a traditional economist.
What’s her favourite day at work, I ask. Any data release day, she says. Labour market numbers, inflation rates, a Reserve Bank announcement…
“These are days it’s exhilarating to be an economist. Especially when you have picked what it might be beforehand, and then you get the information and you are competing with other economists to do the analysis. It’s such a relief when you get it right.”
Vergara even comes to almost relish the amount of maths and statistics involved in the job – something she’s always been good at, but didn’t used to enjoy much. “I quite like it now, especially when you get the proof correct. I like it because there’s an answer – it’s very clean.”
An untypical economist
But in many ways, Vergara isn’t your typical economist. Starting, of course, with the demographics: young, female.
There aren’t too many studies on the diversity of New Zealand economists, but international media coverage suggests a gaping gender split worldwide – and one which isn’t necessarily improving.
A New York Times article suggests the gap starts from university, where only a third of economics majors are women, and goes all the way to the top.
“Janet Yellen is the only woman to have served as Federal Reserve chairman,” the article says, “and even Ms Yellen had previously failed to win tenure at Harvard. There has never been a female Treasury secretary. Only three women have been chairman of the Council of Economic Advisers, and none served under a Republican president.
The article is two years old, but not much has changed.
“At virtually every level of training and every professional rank within economics, women are a minority. And women are less likely than men to progress at each successive step along the career path, so this imbalance is more lopsided at senior levels.
“Women are outnumbered among full professors at so-called top twenty economics departments by a ratio of six to one. The University of Chicago has one female full professor of economics; Northwestern has none.”
It’s the same in New Zealand. A non-scientific check of economics department staff lists at our universities suggests at best the ratio is 4:1 male:female. At worst it’s closer to 10:1. On the Victoria University of Wellington site, you scroll through 25 male profiles – professors, associate professors, and senior lecturers before you hit two female staff members – both at lecturer level.
Still, things are changing on the ground in New Zealand banks. Kiwibank’s previous chief economist was a woman – Zoe Wallis. She’s now the chief economist at Deloitte NZ. ANZ also has a female chief economist, Sharon Zollner, and Donna Purdue is chief economist at MBIE.
Breaking the business focus
Vergara says she didn’t feel conspicuous at Auckland University as a woman economist – there was a good gender mix among her classmates. However she came to the subject via an unusual route – a commerce degree but then a Master of Arts, first class honours.
Endres estimates close to 90 percent of economics students are doing business, law or science degrees, not arts.
That hasn’t always been the case, Endres says. In the past, economics departments were often in the social science or arts faculties.
He reckons the concentration of economics as a business subject is a problem.
“Economists are much less likely these days to be involved in social issues. In the 1970s there was a lot more interest in social economics – the economics of social policy, education, healthcare or public housing.
“These days it’s tougher – economists are trained more in maths and statistical analysis, and they are required to have robust technical skills, because the tools they use are so complex.
“All those more social sides of economics are seen as soft things.
“It’s the lost art of economics.”
It’s chicken and egg, says US economics professor Justin Wolfers in the New York Times article. Women economists tend to focus on different topics than men. While men dominate macroeconomics, women are more visible in fields like labour markets, health and education.
The more technical economics becomes, and the more focussed on finance and macroeconomics, the less interesting it is to female economists. And the wider the gap becomes, he says.
“The only majority-female economics conference I’ve ever attended was on the economics of children, a field focused on schooling, family structure and child well-being,” Wolfers says. “If there were more female economists, more attention would surely be paid to these issues.”
Writing on the Forbes site last year in an article entitled: “Do women avoid economics…or does economics avoid women?” another (male) economics professor, John Harvey, put it this way:
“You want women and minorities to major in econ, earn econ PhDs, and rise up the hierarchy of the economics discipline? Talk about things that matter to them (things that should matter to all of us).”
Economics as change agent
Endres was one of 10 children brought up in a three-bedroom house. His family was poor, he says. “I did economics because I wanted to understand what you could do to improve the lot of human beings. I would not have had the idea that people did economics to make money.”
Like Endres, Vergara chose the social, rather than the more business branches of economics.
As she says in this video, she believes when you strip away the numbers, economics is about people and their behaviour in the economy.
Her masters thesis, finished in 2017, is entitled ‘The economic status of women in New Zealand since the 1980s: an institutional perspective’.
Vergara looked at how women’s economic status had improved over the last 30 years, but also examined institutions which have limited women, and the historical reasons behind that.
“She dug into status-restricting institutions. The external examiners were impressed,” Endres, her supervisor, says.
For a time after graduation, Vergara worked in the environmental economics research team for consultancy firm Market Economics. It was interesting work, and a growing field as climate change becomes increasingly concerning.
But she wanted to broaden her scope. The logical route was to move to Wellington – “the city of stars for economists” and take a job as an analyst with one of the big organisations there – the Reserve Bank, Treasury, or a research think-tank.
Vergara didn’t want to move to Wellington. So in December last year, when her brother told her about a job being advertised at Kiwibank in Auckland, she applied – and got the job.
“She was the best candidate,” says chief economist Jarrod Kerr. “She is young and keen and itching to learn and has injected a different perspective.”
Kerr says the bank was looking to add a woman to the three-person economics team, but wasn’t sure how easy that would be.
“I had huge issues when I worked [for Commonwealth Bank] in Sydney and we wanted a more diverse team. We had zero suitable candidates – the ones that came through said they would be happy to [be a bank economist] for a couple of years but they wanted to end up in the marketing team.”
So he was pleased with the outcome here.
“We had 70 candidates, of which 20 were worth looking at in terms of their post-graduate qualification. Of the top 10, six were women, and the short list of three were all women.”
Vergara had more experience than the other two, but all were good candidates, he says.
“I was surprised and encouraged. I had a preconception there weren’t many females coming through economics.”
Cutting your teeth in a crisis
Here’s a great MJ story. It’s early 2020, in the BC (before Covid) era, and recently-appointed Vergara is chatting to her new boss about his career.
She’s read an article where Kerr, a classically trained economist, finds himself in the throes of the 2008 global financial crisis. He finds himself throwing all his hard-earned textbook knowledge out of the window as the financial world turns upside down.
Kerr becomes, as the article puts it, “a most unconventional economist”.
“MJV was asking me about it, what I’d learnt from the GFC and we were joking, and she said ‘I wish I had a crisis I could learn from’.
Less than two months later, the world was in the throes of a way bigger crisis than the GFC – the Covid-19 pandemic.
“We call it MJV’s crisis, so she can learn,” Kerr says.
Not only is Vergara learning, but suddenly her masters’ thesis about the economic status of women, is crazy-relevant.
The 24-year-old has become a go-to commentator on the disproportionate impact of the pandemic on women, particularly in terms of unemployment.
Previous crises tended to affect men more than women, she says. WWII saw women taking jobs traditionally done by men; the uncertainty of Rogernomics brought increasing numbers of part time roles, and the GFC hit the largely male preserve of finance sector jobs.
Covid is different.
“The rising unemployment rate will be led by rising women’s unemployment,” Vergara told Newsroom in March, as the pandemic hit. That’s because women fill 60 percent of sales and service jobs, 70 percent of hospitality jobs and make up more than 70 percent of part time workers.
Her predictions were borne out when the June quarter numbers came out: of 11,000 people who lost their jobs in the quarter, 10,000 were women.
“And Stats NZ’s latest tourism satellite accounts show that the blow to tourism has disproportionately affected Māori women,” Vergara wrote recently. “There were 4,000 fewer Māori women employed in tourism industries in the June quarter than a year ago – a whopping 20.5 percent drop. With closed borders and future limitations on domestic travel, it wouldn’t be a stretch to see more job losses among Māori women.”
However, at the same time the “shovel ready” recovery projects being funded by the Government are skewed towards construction – a largely male preserve.
Her insights haven’t always earned her friends – “I was disgusted by the replies she got on Twitter when she raised the issue of more women being affected than men,” Kerr says. “But unfortunately she was proved right.”
“She’s aware it’s about people and their lives. Datasets aren’t just aggregate figures, they are a summary of those lives changing.”
Endres says Vergara has a way of not just looking at the numbers, but at what they might mean for people.
“Economists get excited by GDP, or the unemployment figures, or productivity. Mary Jo looks underneath that and breaks it down to how a particular group might be affected by, say, the GDP numbers or unemployment.
“She’s aware it’s about people and their lives. Datasets aren’t just aggregate figures, they are a summary of those lives changing.”
Kerr says that’s what the bank wants to see more of from its economists – people with passion for the way economics can impact the world.
“She’s someone who is a leading voice in an area of great concern,” he says. “The next thing is climate change, something I’ve been passionate about for years. She’ll think about it in different ways to me – that’s the fun of having diverse minds working together.”
Meanwhile Vergara, who never thought to be a bank economist, largely because she thought of them more in terms of Mary Poppins’ Mr Banks or Wolf of Wall Street, says she’s loving the work and how it fits in with what she cares about.
“I see how crucial economics is across the bank, how it affects so many teams. But it doesn’t just have to be about finance or about things that are traded. It’s expanding so it’s about things like wellbeing, things that can’t be traded. We are using an economic lens to analyse and provide solutions to social issues too.”
Just like her sister, Vergara loves people too.
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