Putting A Value On Housework

I’m currently reading Free Lunch: Easily Digestible Economics, an introductory book to economics and it discusses an interesting alternative to the way we calculate a nation’s Gross Domestic Product.

Generally, a nation’s GDP is calculated on spending: consumer spending + government spending + investment + exports – imports = GDP. But the question that many people have asked is, is this a valid measure of a nation’s wealth and prosperity?

One of the alternate methods for calculating a nations economic wealth, the genuine progress index, attempts to put a dollar value on domestic duties and include that value as part of the GDP.

When it comes to home duties and child rearing duties, I’ve always felt that these aren’t valued in society because they don’t have an easily discernable monetary value. In an age of economic rationalism (I know I’m using this term incorrectly, but it’s such a good phrase that reflects what I mean) where we rationalise everything in terms of dollar value, we forget that there are other ways to value the things that we do and have.

For example, some things are valuable because they bring us joy, some things give us wisdom,  some things are valuable because of emotional attachment, some things are valuable because they provide a necessary service to others and some things are valuable just because they are the right things to do.

Of course, one of the problems of measuring success and prosperity through something as ephemeral as happiness is that it’s a lot harder to compare yourself to others than it is with outward appearances of success and we do like to compare ourselves with others!

While my DH argues, and rightly, that putting a dollar value on housework doesn’t move us beyond our need to rationalise everything in terms of money, it is a positive step forward in getting people to realise that homemakers and stay at home mothers or fathers do have an important / vital role to play in society and that this role needs to be recognised and valued.

Nova Scotia has actually calculated their genuine progress index and compared it to their GDP. A quote in the book taken from the researchers in Nova Scotia is worth reprinting in part here. Unfortunately the book does not footnote or include a bibliography so I can’t reference this quote properly except that it’s on pg66 of the book:

Work performed in households is more essential to basic survival and quality of life than much of the work done in offices, factories and stores, and is a fundamental precondition for a healthy market sector…Yet this huge unpaid contribution registers nowhere in our standard economic accounts…When we cook our own meals, clean our own house and look after our own children it has no value in our measures of progress.

When the researchers in Nova Scotia valued unpaid work at prevailing pay rates for domestic work and childcare, they found that it added up to just over half of the measured GDP. In England, the value of household production would be equivalent to nearly 80% of GDP.

It is time to recognise the value of the unpaid work that we do. I don’t think that we should put a dollar amount on it to be able to see the value of unpaid work, but if it helps then I’m all for it.

As an addendum, some of these alternative measures to traditional GDP include things like volunteer work, level of education, general health, happiness and well being of a population, a population’s leisure time, environmental degradation / sustainability, and the cost of crime to name a few measures of a nation’s prosperity. While there are obvious difficulties with putting dollar values on these things, I think it makes much more sense for these aspects of society to be a measure of prosperity. Can a nation really be called wealthy if everyone is unhealthy and unhappy?