The Mother Economy

Mother_India_poster

Gross domestic product or GDP, is one of the most used or perhaps abused terms in economics. The trouble is that too many people use it without realising that it is ultimately a theoretical construct and not a real number.

In the simplest terms GDP is defined as the value of goods and services produced in a country during the course of a year. The trouble is in defining what has a value and what doesn’t. As the old GDP joke goes, when a man or a woman marries his or her housekeeper, the GDP of the country goes down. This happens simply because the housekeeper was paid for doing the house work. The spouse clearly won’t be.

On a serious note, this joke shows a big loophole in the way the GDP is calculated. The calculation takes only paid work into account. The trouble is that unpaid work forms a very important as well as large part of the economy, though this is something that most people do not realise.

As Kate Raworth writes in Doughnut Economics—Seven Ways to Think Like a 21st-Century Economist: “If you have never really thought of it before, then it’s time you met your inner housewife (because we all have one). She lives in the daily dealings of making breakfast, washing the dishes, tidying the house, shopping for groceries, teaching the children to walk and to share, washing clothes, caring for elderly parents, emptying the rubbish bins, collecting kids from school, helping the neighbours, making the dinner, sweeping the floor, and lending an ear.”

Most of us do these things and don’t get paid for it. Nevertheless, they are a very important part of the lives that we live.

Raworth is British and hence, invocates the term inner housewife. In India, there are real housewives (not that they are not there in Britain) who just take care of the home. As per the National Sample Survey (NSS), for women in the age of 25-54, the labour force participation rate varies between 26 to 28 per cent in urban areas and 44 per cent in rural areas. Hence, most Indian women don’t work, in the conventional sense of the term. But they run their homes. Even young girls who are not married are expected to contribute towards house work.

All this never gets counted towards the GDP. As Raworth writes: “In sub-Saharan Africa and South Asia… when the state fails to deliver, and the market is out of reach, householders have to make provisions for many more of their needs directly. Millions of women and girls spend hours walking miles each day, carrying their body weight in water, food or firewood on their heads, often with a baby strapped to their back – and all for no pay.” And given that there is no pay, the work does not reflect in the GDP.

In fact, economists have even put numbers to this unpaid work. “A 2014 survey of 15,000 mothers in the USA calculated that, if women were paid the going hourly rate for each of their roles – switching between housekeeper and daycare teacher to van driver and cleaner – then stay-at-home mums would earn around $120,000 each year. Even mothers who do head out to work each day would earn an extra $70,000 on top of their actual wages.”

This unpaid work which is a very important part of a running a household smoothly as well as bringing up a child, is not reflected in the GDP. And that is a real problem. This patriarchal attitude of economics as it is practiced, needs to be corrected in the years to come.

The column originally appeared in the Bangalore Mirror on June 9, 2017.

Advertisements

About vivekkaul
Vivek Kaul is a writer who has worked at senior positions with the Daily News and Analysis(DNA) and The Economic Times, in the past. He is the author of the Easy Money trilogy. Easy Money: The Greatest Ponzi Scheme Ever and How It Is Set to Destroy the Global Financial System , the latest book in the trilogy has just been published. The first two books in the trilogy were published in November 2013 and July 2014 respectively. Both the books were bestsellers on Amazon.com and Amazon.in. Currently he works as an economic commentator and writes regular columns for www.firstpost.com. He is also the India editor of The Daily Reckoning newsletter published by www.equitymaster.com. His writing has appeared across various other publications in India. These include The Times of India, Business Standard,Business Today, Business World, The Hindu, The Hindu Business Line, Indian Management, The Asian Age, Deccan Chronicle, Forbes India, Mutual Fund Insight, The Free Press Journal, Quartz.com, DailyO.in, Business World, Huffington Post and Wealth Insight. In the past he has also been a regular columnist for www.rediff.com. He has lectured at IIM Bangalore, IIM Indore, TA PAI Institute of Management and the Alliance University (Bangalore). He has also taught a course titled Indian Economy to the PGPMX batch of IIM Indore. His areas of interest are the intersection between politics and economics, the international financial crisis, personal finance, marketing and branding, and anything to do with cinema and music. He can be reached at vivek.kaul@gmail.com

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: