The Care Economy -re-thinking the role of the household in Economics

It's a Monday morning in March 2022. My child has just been sent home with home learning materials for next week. 'Preventative' Home Learning. Again. Because two cases were detected in his class. I'm angry for my child, who doesn't get to learn from his teacher, see his friends, run around at recess. I'm tired of the policies that favour fear over courage and angry at policies like this, that push care work back into the family, because it's easy, there are no costs attached, no one protests.

We are now in our third year of covid. What have we learned? It’s not a brief period to be dealt with and moved on from, this is our 'new normal'. We are far past the times of tolerating seeing children in zoom calls, as they come into our 'home offices' to ask for what they need - we are being called on to stay home with them and to teach them in a regular basis, ad hoc, unpredictably, and we are being asked to do this on top of everything else for free.

Tomorrow is International Women's Day, and again this year we are discussing topics like how to combine work and family, and the Gender Pay Gap. It is 2022 and women are still being paid 18% of what men are paid for the same job. Why? The answer is structural and it's financial - it's care work and it's how we define our economy.

McKinsey conducted a study analyzing the potential increase in GDP if the wage gap between men and women were to close - and arrived at the incredible increase of GDP by $12 trillion if this were to happen. Their findings also stated that they find it unlikely the wage gap will close in short term for the following reasons:

"Doing so would imply not only the reduction of formidable barriers and change in social attitudes but also personal choices about how to allocate time between domestic and market-based work." -McKinsey

This quote highlights two deep-seated structural problems:

The idea that 'Domestic work', aka "household work"or "care work" is not part of the market, and
the idea that fulfilling this type of work is only up to personal choices and preferences.

Let's start with domestic work. Instead of simply closing the Gender Pay Gap between men and women, what is we instead gave a value to domestic work and included it in our accounting? A 2014 study of >15,000 Stay-at-Home moms in the USA found that if they were paid at the market rate for each of the jobs they do throughout the day, they would earn on average $120,000 / year. Even moms that do 'market-based work', would earn an additional $70,000 / year for the domestic work they do on the side.

But this type of labour has not been included in our accounting, because - pay attention now - like natural resources - it was seen as free, and limitless. Just as we are seeing the results of the pressure on our natural systems, we can see the results of overworking and underpaying women in systemic inequalities, and negative health & financial consequences.

Let's move on to the second statement - that this is based on personal choice. I remember, just a few years ago, honestly thinking I could have it all. I had everything sorted out - a successful business with a strong co-founder, a reliable babysitter and afternoon programs set up for my kids, a cleaner to help keep our house in order and a husband that supported me in all areas. And then, three years ago - this all got thrown up in the air. No babysitter, no cleaner, no programs, no school.

In times of cutbacks in childcare and caregiving, or in crisis situations like Covid-19, the need for this domestic work is not lost, but shifted back into households. The additional responsibility for "care work" may lead women to reduce their presence in the "labor market," via part-time solutions, sabatticals, switching to freelance work or evening taking a break.

"This pressure, particularly on women's time, can force them out of work and increase social stress and vulnerability." - Kate Raworth

According to a German study looking at the last two years, about 18% of women have reduced their working hours care for their children ( in contrast to men, where it was 6%). I belong to this 18%.

I would consider myself a feminist, and should know better, right? But how can you choose a theoretical right choice for the future, when the consequences impact the people you love? What I know - is that I cannot sacrifice the present for the future, and especially when the present has a human cost.

And so we come to these structural problems with the Gender-Pay-Gap: women earn less, through part-time work, through time off, so if a couple looks at the decision simply from an economically standpoint, it follows logically that if one of them must reduce their hours at work, it should be one who earns less.

Although this is logical, it has consequences beyond the here and now : Through the part-time, fewer women come into leadership positions, because they are just structured on full-time, or women themselves do not want to carry even more responsibility, because are by care work and mental load already at their own limits. Or, they suffer from #imposter syndrome and don't dare to take on leading positions, something #Google is fighting against with their #iamremarkable initiative.

After three years, we have still not figured out a way to integrate care work into the paid economy, we still have not found built resilient and inclusive structures into our society.

Where should we even start with this? First with the language, then our definition of economy : Care work must be rethought in 'Core work' : it is the work that makes it possible to take a paid job and that underpins productivity, but is itself unpaid, unmeasured and undervalued. This work must no longer be considered OUTSIDE the economy. We need to redefine the terms we use and the way we see the economy.

Kate Rawley in Doughnut Economics gives us a framework to see this better: there are many factors that don't show up on our economic balance sheet - not just this unseen, unpaid housework, but also all the costs to our natural world - clean air, clear water. We need to make it visible and assign it a financial value - making it measurable. Enter the Embedded Economy, which places the Household, aka Core Economy, and the Commons (aka Nature / Natural Resources ) on par with the Market, and does not see them as unlimited, free resources.

Re-imaging the Economy as Embedded and including previously free, unlimited resources such as care work and natural resources to the balance sheet is a big job.

What needs to happen along the way?