The Economic Costs of MeToo

The MeToo movement has caused ripples across the entire world. The fact that some of the most prominent and powerful men in the world are harassing their female colleagues has been a shocking revelation to many. It has also opened the potential for many lawsuits. Companies that continue to keep accused on their payroll are also struggling financially.

It is a known fact that sexual harassment cases have a huge impact on the reputation of the company. However, after all the negative publicity received by the perpetrators since the inception of this movement, the economic costs are significant too. The perpetrators, as well as companies that harbor them, tend to lose a lot of money. However, what is not commonly understood is the fact that there are economic consequences for victims too!

In this article, we will have a look at some of the cases where prominent lost significant sums of money due to their involvement in a sexual harassment case. We will also try and understand the economic impact on the victims.

The Staggering Cost of MeToo!

Kevin Spacey is one of the leading men in Hollywood who has been accused in the MeToo scandal. Consider the fact that Kevin Spacey’s latest movie collected only $126 on its opening weekend. This is not a typing error. The movie did not collect $126 million or even $126 thousand. It collected only $126! Netflix was also forced to cut down their ties with Kevin Spacey. Since Netflix bailed out without much notice, it had to reportedly spend $39 million in order to amicably dissolve the partnership.

Paul Marciano, who is the co-founder of iconic fashion brand Guess, was accused by Kate Upton of sexual misconduct. As soon as she revealed her predicament on Twitter, the shares of the company fell by over 18%. Hence, a Tweet ended up costing the company $250 million.

Similarly, Steve Wynn who owns one of the largest casino chains in the world was forced to resign from his company. This MeToo allegation ended up costing the company close to $3.5 billion dollars.

The media and the population at large are completely against powerful men bullying their female subordinates in order to obtain sexual favors. Most of the allegations have been true. However, many analysts have also noted that the economic effect for the men accused starts long before there is any trial. In this situation, any woman who was to falsely accuse a powerful man could ruin his career without any proof whatsoever.

The recent allegations made by MeToo victims are having wide-ranging effects on how women are treated in the corporate world. Some of the effects have been listed down in this article.

Fear Factor

Executives all over the world are now more careful while recruiting women. They tend to avoid recruiting attractive young women in roles where day to day interaction is required. Many executives have claimed that they tend to avoid any conversation with their female colleagues off business hours. This is in contrast to the fact that they still continue to bond with their male colleagues. Hence, many female employees now describe themselves as being outcasts.

Even if women are employed, senior personnel prefer not to travel with them on work assignments. If travel is inevitable, living arrangements are now being made in order to ensure that women are kept at a distance. The bottom line is that men in power prefer not to hire women at all. They are only hiring women in order to avoid discrimination lawsuits.

While the MeToo movement has given justice to many female victims, it has also allowed many to falsely accuse men in top positions. To avoid the entire conundrum, fewer women are being hired. One of the negative effects of the MeToo movement has been that it has reinforced the glass ceiling in the workplace.

More Stringent Rules

The recent MeToo revelations have turned into full-fledged scandals which have cost many companies a lot of money. In order to prevent these scandals from surfacing in the future, companies have now started creating a mechanism so that women are able to express their concerns. Companies are now expected to create reports and adhere to a variety of compliance norms. Having more compliance norms means hiring women has become an expensive proposition which is the reason why companies are hiring relatively fewer women as a result.


The MeToo movement is not the first movement that would result in companies trying to stop the hiring of employees which later allege discrimination.

Prior to this also, there have been movements on behalf of differently abled employees which allege discrimination. Statistics later showed that companies simply stopped hiring differently abled people. This is not because companies are inherently bad or want to side with perpetrators. Rather, this is because of the fact that companies are commercial entities. Hence, they want only to hire employees who do not threaten lawsuits in the future.

The bottom line, therefore, is that even though the #MeToo movement is very important to bring sexual harassment discussions out in the open, it may also be harming the economic interests of women. This is because this movement is projecting women as dangerous employees who can sue the company at any time.

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