The debate around paying housewives (or househusbands) for their work has been raging for decades.  The matter has never been settled for the simple reason that we have been asking all along the wrong question.  Few would argue that a housewife provides important services to her family.  The actual question facing us is who should pay for those services.

Money is a medium of exchange.  You provide your services to an employer and get paid for your work.  In turn, you use this money to buy the services that allow you to survive in our modern society.  Even when you save money for a vacation or for your old age, your savings will in effect buy future services.  In my opinion, we only deal with services in our society, there really are no such things as products.  But as I will argue later on, economists need to think in term of “Goods and Services.” (For economists, goods are tangible things which possess utility; they are also transferable.  Services also possess utility, but they are not embodied in a tangible object, and they are not transferable).

Consider the purchase of a can of peaches.  You call it a product since you can eat it.  An airline ticket is a service since you can neither eat it nor wear it!  However, the can of peaches is a bundle of services, as is the airline ticket.

To get you safely and efficiently to your destination, the airline company will use the services of thousands of workers.

The can of peaches will require a farmer to grow the peaches; a miner to mine the tin from the ground; a factory worker to cook and can the peaches; and a supermarket employee to display the can, and, of course, to charge you for it.

And these are only the main actors.  In addition, there are transportation, warehousing, insurance, banking, marketing, and an army of administrators both in the private and public sectors.  Indeed, there is a cast of thousands cutting across different professions, different industries, different countries.

That said, economists cannot capture all the costs related to our can of peaches; really they don’t need to; it’s already done for them.  The different parties along the way have taken their cut.  By the time it lands on your supermarket shelve, it has a retail price, all you have to do is pay for it, go home, and eat it.  Because of that, it is called a “good” with an ultimate consumer, you.  Once you have enjoyed your peaches there is nothing left, well, almost nothing!

I can think of two other reasons (but I am sure there are more) why our can of peaches should be treated as a product and not a bundle of services.

Let us assume that the peaches are grown in country A; let us further suppose that they are sent to country B (where labor is cheaper)  to be cooked and canned; and finally exported to country C.  The economic impact is different in each country:  A and B will show services on their GDP (the work of the farmer and the factory worker), whereas C will show the sale of a can of peaches.  Put in simpler terms, the (economic) action is spread across three different countries.

We then have inventory considerations.  A supermarket can have a one-month inventory of this particular brand of canned peaches.  They can at any time display them, sell them, and make a profit.  An airline company who fly a plane with empty seats, has lost the revenue from those seats forever.

[Economists may want to produce a GDP showing all economic activities within their country converted into services (in addition to the conventional GDP).  The questions are:  How to do that?  And if it is possible, would it be useful?  Many things that at first view appeared totally useless, proved later on to be invaluable; the invention of lasers in the ’50s being a good example.  I know little about economics; I am but a humble accountant; but what I am proposing can be a light in the dark tunnel of economics.]

You’ve heard of a play within a play (Shakespeare used this device on a number of occasion; for example, Hamlet, and The Taming Of The Shrew).  It allows the playwright to “get away” from his “main” play to make a point; or to tell two related stories.  And that is what I did here.  I have a debate within a debate:  both are related, and both are important in their own right.

The economic aspect of this article has been made; we can now go back to our housewife.

A housewife provides a bundle of services which, if they were costed and paid out, would provides her with a very handsome salary.  Actually, only executives, top professionals, and professional athletes would surpass her.  But let assume that she is willing to settle for a much reduced salary; the next question is:  who should pay her?

If her husband pays her, what would she do with the money?  Go out and buy services required for her family and herself, or save it to buy future services.  This, as pointed out previously are her only options.  In other words, it’s an internal transaction, almost nothing has been accomplished.  I said “almost” since she, of course, can spend her money anyway she sees fit. Perhaps, on this basis, a case can be made that this housewife should be paid.  But that is a matter to be decided by individual families; in a free society, unless there is a good reason, governments cannot meddle in our internal affairs.

If the government (i.e. the taxpayers) pays her, we are faced with two questions:  How can she be accountable vis-a-vis the government?  After all, we are accountable to our employer; if we don’t perform to his/her satisfaction, we lose our job.  The second question is what services has she performed of direct benefit to society?  This second question is not as problematic as the first.  The smooth running of the family unit directly benefit all of society.  The other side of the coin is that the housewife would not be alone in requesting that society pays her for her work.  Consider a nurse working for a private hospital.  She cares for her patients and will on occasion save lives; her work directly benefit all of society; should she expects because of that to receive a cheque from the government in addition to her regular paycheque?

[The above discussion is applicable to both a full-time housewife, and a part-time one.  Part-time, in turn, could mean working a partial week; part of the year; or taking long stretches of time-off.]

We live in a society obsessed with money; otherwise, such a question would never arise.  If only we could remember that money has no intrinsic value of its own (really, it is nothing more than coins, notes, securities, and entries on banks statements), perhaps we can then realize that an advanced society is made out of individuals engaged in exchanging services.  And these services include the services rendered by a housewife to her family.

Site Search Tags:
none