What is the going rate for being a mum? Madhavi Venkatesan suggests it’s time to stop following the money.
The pandemic has highlighted the relationship and trade-off between parenting and paid work. School and childcare facility closures as well as reduction in the operating schedules for those remaining open have impacted parental working schedules. Though much of the recent discussion has centered on the resulting disproportionate child-rearing responsibilities of women and their forced exit from the labour market, perhaps the more significant discussion is the discounting of the social value of parenting arising from its lack of market value.
I am a single parent, a woman and an economist. The last aspect has affected how I perceive the world, the second, how I am perceived by it and the first, is an opportunity that I have to leave an impression. All of these attributes have value but not necessarily quantitatively measurable value. Given the business of life, income has, based on assumed simplicity and accuracy, become a proxy for actual value. Unfortunately, use of quantitative metrics has placed heavy reliance on market values and virtually omitted the value of activities that may not be monetised.
“Being a parent is a value that only has market significance when the responsibilities are outsourced.”
Being a parent is a value that only has market significance when the responsibilities are outsourced, while being a woman has implicit social value that is culturally determined. Being an economist provides direct evidence of occupational value based on my pay cheque, which under the assumption that demand from my employer relative to the supply of labour from me represents equal bargaining power, may be assumed as my fair market value.
Market prices reflect what is known and what is valued in a given product or service. However, for many products and services there is an information asymmetry that prohibits an understanding of complete costs and benefits. Further, employers often have stronger bargaining power than workers and profit more from their employees than they redistribute back in the form of pay. Additionally, social norms, such as the value of being a woman, can simply reinforce observable gender bias. By relying on transactional value or how much is paid, a society may be reinforcing prevailing implicit bias, leading to outcomes that are inconsistent with overall social welfare and undercounting actual productivity.
“The perversion of our system is that we only measure and give value to what we pay for.”
A simple example is parenting. Child rearing is work and it is work that relates directly to the wellbeing of society. When a child is raised by an attentive parent, its cognitive and emotional development benefit. These benefits are realised by society as a whole when the child eventually participates in activities outside the home. Children seen from this perspective are not a familial asset but a societal one. However, child rearing has no market value if the child is being taken care of by its parent. It is unpaid labour even though it supports the eventual market value of the future adult child. As a result of the pandemic and related child-care closures, working parents have had to take on the responsibility of child-care that would otherwise have been outsourced and as a result have had to either exit the labour market or add more working hours to their days to essentially become the teacher, parent and income-earner.
The perversion of our system is that we only measure and give value to what we pay for. The metrics we use to quantify economic growth are designed to only capture market-based values. So, at a time when many working parents may be working even more than before, this is invisible. Since an individual’s economic value is tied to earned income, there is also a conundrum: should parents pursue a market value and then pay for child services, even in a pandemic?
Should they, in effect, gain present monetary value at the cost of the present and future value of the child-parent relationship and, in the present situation, bring a health risk into the home? Can a carer be paid to provide what comes naturally to many parents? Does income earned offset this cost and the present pandemic-related health risks? The difference in the child’s development when compared between a parent and carer are not accounted for in the coincident measure of economic growth. But the income gained from the parent and by the carer are. The impact to the child is only captured at a later time when he or she is valued by the market. Ironically, market costs related to treatment for Covid-19 are included in the measure, but the preventative actions to limit spread, unless paid for, are not.
“Parenting is work that has a long-term potential benefit to society.”
From a holistic evaluation inclusive of quantitative and qualitative costs and benefits, parenting is work that has a long-term potential benefit to society. In parenting, we are creating individuals who will better function in society and in doing so, provide value to it. By focusing only on the value of income we have in essence devalued parenting. With the assumption of market efficiency, we have omitted that the market is imperfect. In valuing the present over the impact of present actions on the future, we have placed a constraint on evaluating our decisions across time.
Our market system is based on the premise of market efficiency, but it is clear that information and time horizon can obscure market perceptions. Fundamentally, it is assumed that market values will provide a proxy, a means of assessing value. To the extent that they have become the default decision-making tool, they have become the sole source of value.
“We have an opportunity to pause, reflect and revise the relationship between measurement and value.”
As a society, given the pandemic and forced cessation of much economic activity, we are at a unique point where we have an opportunity to pause, reflect and revise the relationship between measurement and value. By limiting value to monetary terms, we have placed too much trust in the “fairness” of the marketplace and eroded the value of what money cannot proxy: love, nurturing, empathy, stewardship and kindness. To measure social welfare adequately, we need new economic indicators that measure the qualitative aspects of life that cannot be quantified. Interestingly, by focusing directly on qualitative value, we will reduce our resource footprint, implicitly promoting sustainability at a time when the need for sustainable development is widely understood as a necessity.