Gross Domestic Product has numerous issues, especially as a measure of national-level standard of living. It is supposed to be a measure of total production and therefore the general health of an economy, but it falls short of this in many ways. In the US, the Bureau of Economic Analysis is responsible for estimating GDP, and their preferred estimation technique is to add up all consumption, investment, government, and net export spending (export spending minus import spending).

GDP ignores black markets and household production

Official estimates of total production are lacking because there is much of total production that isn’t counted. Some goods are not traded or not traded legally. For example, black markets in drugs, untaxed goods, prostitution, and copyrighted media aren’t produced, distributed, or traded legally, and so are absent from official GDP statistics. Estimates for the size of black markets range from 10-30% of GDP, depending on the country. It represents many trillions of dollars of spending globally.

Other forms of production are legal, but still not counted in GDP, like household production. I mow my own grass, which is production from an economic perspective, even though I’m not producing something for the market.

On this issue, feminist economist Joyce Jacobsen at Wesleyan University says that women are disproportionately underrepresented in GDP. Lydia Dishman at FastCompany reported on a recent talk by Dr. Jacobsen:

The result of this imbalance, according to Jacobsen, is a misrepresentation on a broader economic scale in the GDP. If work is unpaid, it isn’t included in “production,” and since women do the bulk of this informal work around the world, their contribution has been devalued.

I wouldn’t say that there is some sort of misogynistic conspiracy against women to underreport their production in GDP figures, just that GDP itself is flawed. There’s nothing to be gained by being counted in GDP, anyways. Employers do not consult somebody’s demographic group’s contribution to GDP to determine compensation. Wages are dependent on the employer’s anticipations of the laborer’s marginal revenue product and the value the laborer places on alternatives, whether that means working elsewhere or enjoying leisure.