Wednesday, June 19, 2024


Dhaka Tribune

The economics of house work

Is counting house work into the GDP a good idea?

Update : 28 May 2023, 11:54 AM

Is women's unpaid work in the household both work and useful? Of course it is -- I'd rather not say anything different within frying pan reach of either my mother or wife anyway. However, the idea of trying to value it monetarily has a few difficulties associated with it. Especially if people decide that it should be added to the GDP. Consider it alongside GDP, certainly, but to actually count in GDP, no.

One thing that has long amused me about the Sustainable Development Goals from the UN is this idea that men should be doing as much unpaid work as women. There isn't the same insistence that women must also do the same amount of paid work, hour for hour, as men. The part that's missed in this logic is that the human economic unit is not the individual, it's the household. Running a household does take some time and work, just as earning outside it does. It's the combination of those two that makes up the household labour burden and also the household income. 

Historically, it was men that worked outside the household not, particularly, because of the patriarchy but because the economy depended upon human muscle power. This is something men have considerably more of. So, they're the people who worked for money.  Now that we're all getting those indoor jobs with no heavy lifting this distinction is disappearing. We have also (as we've gotten richer) automated a lot of that household work and drudgery.

The washing machine replaced the river; the gas stove, the wood or charcoal one -- just to name a few. One estimation (for England) has household work taking 60 hours a week in 1930, perhaps 12 to 15 today. It's exactly this that allows both the adults in a household to work outside. Given that modern work doesn't require muscle but instead brains, which women often do better than men,  there's no particular reason why there should be any insistence upon women doing household work. 

Well, except the obvious one that men just don't notice the dirt.

The idea of including the value of that “women's work” in the national accounts has value. We would like to measure what is going on after all. We don't want to put it into GDP because GDP, by definition, only measures money and market transactions. Putting our measure over into some variant of the System of National Income has merit. The reason we don't want it in GDP? Because we use that for other purposes. 

One of the most important being as a crude measure of the ability of the country to support its debt burden.

But what we really mean is money-facilitated transactions which can then be taxed to pay for the debt. Putting non-monetary transactions, which therefore cannot be taxed, into our estimation of how much debt the economy can support, is going to lead to obvious problems.

How, for example, do you tax that husband's production of the Mother's Day breakfast? 

But now we've got a real problem on our hands. Because the rational valuation of that household work is going to be very low indeed. Insultingly low and, given the way households do work, we're never going to hear the end of it, never going to be forgiven for the valuation.

For this was looked at by the Sarkozy Commission which, as well as reporting to a short French president, included two Nobel Laureates in economics -- one of them the Bengali-origin, Amartya Sen. The answer was that women's household work -- anyone's household work -- should be valued at the “general undifferentiated labour rate” or minimum wage. Or, in Bangladesh at present, Tk2,000 to Tk3,000 a month or thereabouts.

If you want to go to the homemaker in your life and tell her that her work is worth that little, you go ahead -- I've already talked about being within frying pan range when commenting on this issue.

The logic, though, is impeccable -- there were two Nobels around that table, after all. We have to listen to their logic even if we then want to shout about it. As Adam Smith observed (that damn pin factory again) it is the division and specialization of labour which increases production. More production means we're all richer -- there's more to go around for each person. It's not quite true that we divide up humanity's work between eight billion specialists, but it's close. I at least have had a job where I was pretty much the only person in the world doing it. And when there's one person handling the majority of the world's trade in one of the only 92 elements there are, then we're really getting pretty “specialist” and dividing work finely.

But -- and here's the problem -- unless your household arrangements are vastly more exciting than mine (or the two Nobels) that household work is going to be divided between only two people. That's not much division and specialization, therefore the productivity of the work isn't going to be high. Low productivity work gets low wages. 

This is not entirely a joke -- when we tell the women in our lives that the household labour is worth the amount a rickshaw driver makes in a month, well, perhaps better just not to mention the idea, eh?       

Tim Worstall is a senior fellow at the Adam Smith Institute in London.

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