Unpaid Work by Homemakers and the Ignored Economic Value of the Domestic Labor, Lack of Accurate Measure for Assessing Unpaid Household Work – Article Example

A short review of Nancy Folbre, “valuing domestic product” ‘Valuing domestic product,’ as was written by Nancy Folber and published in the New York Times on May 28, 2012, reviews economic aspects of unpaid domestic work. It focuses on the unpaid work by homemakers and the ignored economic value that the domestic labor holds. This paper seeks to discuss the article’s main issues, including why full time homemakers are income equalizers. It also discusses aspects of unpaid household work in Canada.
The article’s main issues
The article’s main points range from criticism of exclusion of unpaid domestic work in calculating macroeconomic indicators such as gross domestic product, to the economic and social significance of unpaid housewives’ input and consequences of reduced unpaid domestic household works. One of its major points is the significant economic effects of domestic work to the economy. This is because the unpaid domestic workers offers a supplementary role to the employed member of households, roles that would have been paid for if they were for example taken over by a house help. The article illustrates this with the example of marrying a paid worker thereby ceasing to pay. This will reduce the gross domestic product while a divorce in the arrangement to effect payments for the services would increase the gross domestic product. This identifies the significance of unpaid domestic work to the gross domestic product (Folbre, 2012).
Another identified issue in the article is the undervaluation of the value of unpaid domestic works. One of the reasons for the underestimation of the unpaid domestic work is its equivalent rating with average rate for commercial household workers. The difference in family based skills, and probably self-interest in the unpaid domestic work, however illustrates a higher value for the unpaid work. As a result, published estimates are less than the actual value of unpaid domestic work. Similarly, the estimates exclude many roles played by the unpaid workers (Folbre, 2012).
The author also identifies the changing trend in the number of unpaid domestic workers and the dedicated amount of time by homemakers who still perform unpaid domestic work. Trends into employment, especially among women, have led to a reduction of number of people who perform unpaid domestic labor. Similarly, those who still dedicate to it have a reduced invested time in the work. The reason for such reduced time is the technological developments that provide time efficiencies and cheaper substitutes. These have also led to loss of significance of unpaid domestic work (Folbre, 2012).
The article also explains the role of homemakers, as unpaid domestic workers, as social and economic equalizers. This is because their shift from the domestic chores into paid works leads to a significant difference across households a factor because of the less volatility in the value of domestic chores as compared to employment opportunities (Folbre, 2012).
Why full time homemakers are income equalizers
Full time homemakers are income equalizers because the value of domestic roles and domestically generated products are less volatile that the value in employment opportunities and market products. This means that the homemakers generate almost equal utility levels to harmonize the differences from the breadwinners’ market income. The transition from full time homemakers to the employment market however increases wage rate inequality. Similarly, the shift from a full time homemaker into an employee means that market products whose values are highly volatile substitute the almost uniformly valued domestically produced products. The volatility factor that is less significant in domestic roles than in the market therefore explains the role of full time homemakers as income equalizers (Folbre, 2012).
Unpaid household work in Canada
The value of unpaid household work in Canada is estimated to fall within the range of between 35 percent and 55 percent of the country’s gross domestic product (Perelman, 2011). This translated to almost 300 billion dollars in the year 1998 (Hamdad, 2003). There is however a policy controversy on the best approach to measuring this value. The two commonly proposed methods are the cost of hiring an alternative household worker to perform the same task as the unpaid worker or the opportunity cost in the employment market. This is majorly because the two approaches yield different values because of differences in industrial wage rates. Using the employment of an alternative household worker for example limits the valuation to one industry while the opportunity cost approach subjects the valuation to a wide range of possible valuations. The great controversy is therefore the fact that no accurate measure exist for valuing the unpaid household work (Perelman, 2011).
Folbre, N. (2012). Valuing domestic product. New York Times. Retrieved from: http://economix.blogs.nytimes.com/2012/05/28/valuing-domestic-product/
Hamdad, M. (2003). Valuing households’ unpaid work in Canada, 1992 and 1998: Trends and sources of change. Statistics Canada. Retrieved from: http://www.ops-oms.org/spanish/ad/ge/chile06-background16.pdf
Perelman, M. (2011). The invisible handcuffs of capitalism: How market tyranny stifles the economy by stunning workers. New York, NY: NYU Press.