Economics and Homemakers
thehomefront.substack.com
thehomefront.substack.com
Yes, it may make for a more convenient society in some ways but I wonder if the cumulative effect is worth it? I don't think so. Economists hail efficiency and comparative advantage as a good thing, but it is also a reduction of true value to a single variable (money) which is a dimensional collapse that strips humanity from human beings.
The short-term results seem good, but because in the long-term, the process never stops, the END result is a transformation of human beings from people into cogs in an economic machine that has no soul.
Perhaps efficient, but the ultimate result is fewer children.
That's... capitalism.
Every aspect of your life needs to be financialized and exploited to generate profits for somebody who isn't you. Paid childcare is a profit opportunity. Community childcare is not.
The whole point of hyperindividualism is to destroy community because class consciousness, community, unions and class solidarity are an unacceptable threat to the economic order.
If you set the minimum wage at say 10$/hour and the livable wage at say 20$/hour then you might tax the company 30% of the difference between your livable wage and the actual wage. (Effectively minimum wage becomes 13$/h, but that doesn’t all go to the worker.)
It’s still adds upward wage pressure because higher pay attracts better workers and your out a significant percentage of the difference either way but it reduces the risk of a big spike in unemployment when you raise the livable wage. It also means systemic wage theft more strongly attracts the attention of the IRS.
We’ve decided it’s ok to pay low enough wages that the government is subsidizing low wage workers working a full time job. 40 * 52 * 7.25$/hour is well below the threshold for 100% free health insurance for single people and families get major subsidies well past 13$/hour. Effectively forcing you to set it at ~20$ or subsidize companies.
Currently the government is effectively boosting workers past the minimum wage, because we’ve set the acceptable standard of living above minimum wage. However, we reduce benefits as wages increase which means workers have reduced incentive to seek minor changes in wages.
This system partially reverses that effect. A company paying an extra 1$ out of pocket increases the wages of a worker by 1.3$/hour so when they lose 0.3$/h in benefits they still see 1$/hour in higher wages. (Numbers are illustrative not necessarily how it would be implemented.)
PS: Think of it like having both a minimum wage and universal healthcare, in such a system there’s no penalty to higher wages.
>This system partially reverses that effect. A company paying an extra 1$ out of pocket increases the wages of a worker by 1.3$/hour so when they lose 0.3$/h in benefits they still see 1$/hour in higher wages.
This still feels like you're playing shell games. The only reason your example works is that prior to that marginal dollar, you added a 30% premium to the cost of labor, so you could return some of that 30% when wages go above some arbitrary amount. There's no free money. For people earning exactly the minimum wage, the effect to employers is exactly the same as hiking the minimum wage by an equivalent amount. Moreover, this is arguably a tax on the employee as much as the employer. For people earning exactly minimum wage, employers are forced to pay $3/hr (or whatever) in employee costs, but none of that went to the employee. Had the minimum wage simply been bumped, the employee would be free to spend the money however he sees fit, but with your scheme he gets nothing. Sounds a lot like a minimum wage bump to $3/hr, and then the government immediately clawing it back. In other words, a tax.
Sure it’s a shell game, but reducing benefits when workers now make the new minimum wage is just as much a shell game.
Reducing benefits sounds like government savings not a Tax, but at the end of the day money is money and this money isn’t ending up in the workers pockets either way.
It's not a shell game when it's doing what it says on the tin. Considering the fact that minimum wage predates welfare programs such as food stamps, it'd be difficult to argue that the reduction in benefits was some sneaky loophole. It was always the intended effect.
>Reducing benefits sounds like government savings not a Tax, but at the end of the day money is money.
"government savings" is cold comfort to all the people earning near minimum wage, who are at the greatest risk of getting laid off (or their hours cut) from such a change, and stand to gain nothing from such a law. At least with the minimum wage you could say the risk of losing their job is justified by higher wages.
Slightly increasing minimum wage mostly just saves the government money. After taxes it’s close to 1:1 with reducing benefits until well past current minimum wages. Larger jumps are seen as risky.
Theoretically there’s a number large enough for significant impact that’s still safe, but nobody wants to risk trying to find what it is. So how do you find a good number that does more than just save the government money?
It’s easy enough mathematically to say for every dollar earned someone is entitled to keeps at least 40% of it or whatever arbitrary number is chosen. However when you have multiple means testing programs overlapping it’s easy for the combination to go so low as to become meaningless or worse negative. Especially with things like rent control or tuition.
Similarly, the welfare trap people makes lower annual pay jobs more appealing, which effectively subsidizes companies. I was looking at this as a means of patching over that issue, but yea fixing subsidies is a more direct solution.
How is paying someone under the minimum wage an "externality"? If the employment relationship is canceled, does that magically make the past employee not poor?
Is this an American thing or just a rich people thing? I can’t think of a single generation in my family going back to pre-ww2 where this was true. Everyone always worked. At least on the family farm.
The farm generations even put their kids to work. Our school system (Slovenia) has certain school vacations timed so kids can help with the harvest.
The farmers would pay the kids a bit of money, which seemed like a lot of money to someone in elementary school.
Yeah, my grandfather worked in the mill. He was one of those "good jobs" everybody blathers about (overhead welder). Our family still grew a garden and raised fowl, and it wasn't because we were "healthy". It was because we were poor.
My other grandfather worked in the mines. Also one of those "good jobs"--until he got into an accident, and it shattered his arm. Still needed a garden to make the budget work even before the accident. Yeah, still poor.
My Dad was the first generation of college grads in the family and worked as a schoolteacher. He had to work the mill in summers to make ends meet until mandatory minimum salary came online in the state for teachers. He was constantly worred about how he was going to send me to a decent college--especially after the mills went down. Yeah, still poor.
Farms are an exception where everybody in the family always got worked like hell. There is a reason why all the farms in the US are dependent upon illegal immigrant labor--the work super sucks shit and you have to pay a lot of money before a legal citizen will take the job. Yeah, super poor.
TV wasn't reality. Here's reality: https://i.ebayimg.com/thumbs/images/g/Rs8AAOSw4URhO9dk/s-l50...
Men striking in the early 1950s, Truman seizing the mills, and the Supreme Court ruling that unconstitutional. Very "Leave It To Beaver", no?
Here's probably one of the better jobs in the mill, a set of machinists. Still a crappy job: https://www.google.com/imgres?q=image%20us%20steel%20mill%20...
Steel Strike of 1919: https://www.history.com/news/steel-strike-of-1919-defeat
Money quote: "Mike Connolly had a dream: an eight-hour day. A Pennsylvania steel worker for 41 years, he toiled for 12 or more hours a day behind the locked doors of a steel mill with no days off and little hope for the future.
If he worked eight hours a day, he imagined, “I could have a garden, a couple of hundred chickens and know my family…This way one doesn’t want to live long. What is the use of living, since one doesn’t enjoy life?”"
I desperately wish I could send people from this time back to work one of those "good jobs" they so extol. We'll see how long it takes you before you become a functional alcoholic like the rest of the men working those "good jobs".
Except to make basically the same money more than twice as many households are dual income and productivity is vastly higher.
Why? Because drastically increasing the labor force drove down wages. We need a lot of childcare, restaurant workers, delivery drivers etc to support dual income households which obviously don’t pay very well. Worse households are paying a large fraction of that 20k on things like childcare and meals that used to be done by the stay at home parent.
"almost" is doing a lot of the heavy lifting here. The difference between 80k and 60k is 33%, which is significant.
>Except to make basically the same money more than twice as many households are dual income and productivity is vastly higher.
"number of dual income households" seems like a weird metric to compare against. It's impossible to go from "twice as many households are dual income" to calculate "how much of the household income rise was explained by more earners". For instance, if dual income households were 1% and it doubled to 2%, that would have much less impact on median household income compared to 50% to 100%.
Why not use the labor force participation rate directly? Looking at BLS data[1], women labor force participation rate was already 37% in 1960. In 1990 it's 57%. In the same time, male labor force participation rate also dropped from 83% to 76%[2], but let's ignore that and pretend no male jobs were being displaced. If we assume that, the average earners in a married household went from 1.37 to 1.57, which is only a 14% increase. The 33% rise income is now looking much better.
That’s 40% in 13 years vs a 33% in 64 years and a great deal of “productivity improvement” from all those computers, etc.
And I’ll reiterate because you seemed to skipped that bit “productivity is vastly higher” and people are paying for stuff that was otherwise done by homemakers. I know many dual income households that pay for childcare, housecleaning, food prep, shopping, etc which should be subtracted from any income differential. Eating fast food isn’t necessarily a net positive over a home cooked meal even if it “boosts” GDP.
PS: There’s also other subtle differences, like commuting costs, but to a reasonable approximation none of our increases in standard of living comes from an increase in dual income households.
Everyone until my generation in my family lived in a single-income household. At least full-time income.
They also gardened - enough where canning skills were widely known and utilized. And picked up odd jobs - everyone, the wife and the kids as soon as they were able. Every single kid was working a part time job by age 15 and contributing to the household in some manner or another. Every kid did a serious chunk of daily chores to help out. Extended family assisting in basic child care, home repair, car maintenance, and other duties was the norm.
McDonalds and the like were absolute luxuries for special occasions like birthdays. Not the whole family. The parents and the one kid who's birthday it was. Your menu selection was strictly limited. Anniversaries for the parents were celebrated by the once a year "fancy dinner" at a place like Olive Garden.
The stay at home parent home cooked all the meals from basic (read: cheap but labor intensive) ingredients.
Kids invariably shared bedrooms, sometimes even 3 to a room. A single used car for a family of 6 was the norm. Every kid got two sets of clothing to start the school year, and if you ruined them you were out of luck or learning how to sew patches onto things. Hand-me-downs were the norm.
Houses were about half the size on average in my area.
These were folks everyone likes to wax nostalgic about as "solidly middle class" and lived in the "rich" suburbs.
From where I stand, most of what the dual income household did was simply increase lifestyle and asset inflation. It first started with some folks just "getting ahead" and choosing that life. It then turned into those folks bidding against anyone who wanted to keep costs down and turned a voluntary game into a mandatory one. The market is going to serve the majority and most profitable segment. If you wanted to buy a home, you were bidding against that dual income household willing to take on a 30 year mortgage and max out their finances. You were forced into it - 30% income rule be damned as there were no other choices with so many folks bidding homes and rentals upwards. Now we're at a point where all the fixed expenses have met the median dual income budget - there is nothing left to give. Things will get interesting.
That is certainly not the whole story, but it's a decent part of it very few talk about.
A subsidy for homemakers would shrink the labor force, driving up demand and pay for the remaining workers (the working parent).
I think it would be even better if the next generation grew up, became productive, and learned to contribute to society in new ways outside of just the obvious monetary one. Overall, we need more non-monetary contributions to be recognized.
[1]: https://www.sfchronicle.com/sf/article/sf-state-declares-fis...
To be clear, being a homemaker is a gender-agnostic career, and there is even data that implies than men may be more ideal homemakers, with statistically superior social outcomes.
Especially when children are involved, I don’t think it is an exaggeration to say that homemakers perform one of the most important and critical jobs in society, with a social value on par with or higher than firefighters, police, doctors, and the like.
It is a tragic poverty that homemakers have been systematically and in many cases intentionally undervalued for their critical and life changing work.
Homemakers provide most of the direct value to the household. Your firefighter, doctor, ect provide their value directly to those outside their household.
My neighbor might be a great cook and parent for their child, but I am much more thankful to plumber, who benifits me directly.
The gap between outcomes where there is a stable division of a full time breadwinner and homemaker during formative years vs those where there is heavy involvement of daycare services is a very stark chasm.
But the economic stability has to be there as well, as this breaks down significantly in poverty.
Moving both partners in a domestic life into the workforce also creates strong downward pressure on wages, since it supplies an extra 30% or so employees into the workforce.
All in all the breakdown of a stable domestic workforce has been good for corporations but bad for children, employees, and stable home relationships. And if we look at the current state of affairs of partnering, it’s been bad for just about everyone.
By this argument, wouldn't having children and thereby increasing the population also supply extra employees and drive down wages?
However, an expanded workforce is more productive and thus can allow for more overall consumption (as long as money is distributed somehow to consumers), which is why the addition of women to the workforce is not a negative. And there's actually no limit to an individual person's consumption, as long as they keep acquiring the money for it. Thus, a working parent may end up spending more money than a nonworking parent, which increases economic demand.
Of course, the compensation for specific jobs can vary dramatically, depending on localized supply and demand. In some cases there's an oversupply of labor, but in other cases there's an undersupply. Filling an undersupply of labor can certainly be a net positive. The devil is in the details. Theoretically, roughly speaking, more labor is always good overall, but needless to say, the distribution of income is not even close to equal, which can create localized situations where more labor available in a specific area is not beneficial to the existing labor in that area.
I'm ignoring the negative environmental consequences of increases population, which I normally wouldn't do. I just think it's very odd to argue that the addition of parents to the workforce is a negative while the addition of their children to the workforce is a positive.
Saving and investing etc are deprioritized during child rearing.
But my assertion is that population increases enable Economic growth… and I don’t honestly think that is a debatable point. It’s hard to have a giant economy if you just have 100 people. But perhaps I should have said enabled growth rather than driving growth. More people are going to consume more, leading to more production. I think this is generally true in a healthy economy.
We shall see how the more workers = better pans out with the addition of general purpose anthropoid robots. I suspect we are going to find out what labor oversupply looks like in the next few decades.
Source? Without proper controls this could easily be a case of "households who are in a situation where the man can be homemaker are better for kids", rather than "men being better homemakers".
I think that quote tells you all you need to know, to judge how much economists should influence the way we live.
Erhm no? They are directed toward living expenses and medical expenses, both of which are huge. Some % may be elderly care taking but likely a relatively small % in any given year vs all seniors drawing benefits.
The post links to a article that ends with this summary:
> God created the family to excel by taking advantage of specialization of labor between husband and wife.
> The Trumpet explains the real meaning behind world events. We are a news organization that connects world events with biblical prophecies.
Just because household labor is not taxed, does not mean it does not happen.
By staying at home, my children receive a bespoke education and my family bespoke consumer products (e.g. food and entertainment) that far exceed anything my family can access through the market economy.
Just because I don't directly participate in the entrepreneurial system through taxable wages doesn't mean that I only marginally participate in it. My role is simply that of competing with business (in terms of efficiency and quality)--I find areas where I can do it better and more efficiently, then acquire capital and raw materials, use the capital to add value to the raw resources, provide those resources to the singular market that is my family, and then pocket the profit, which will inevitably be reintroduced back to the broader economy as investment and additional outlays, all of which are taxable.
The ultra-wealthy are afforded the right and ability to have exclusive access to personal assistants, au-pairs, tutors, professional chefs, gardeners, housecleaners, etc. I do all of these and more for my family (at well below market rate), using the same methods, tools, and products that they do, but the wages I receive and any profit (or losses) generated remain within my household such that it can be used for further consumption and investment. I still pay sales taxes on the capital and raw materials, but try to lower my tax burden and vertically integrate like any other business.
That I am free to choose to engage in this mutual exchange with my wife is the bedrock foundation of liberal capitalism and a free society. Frank Hyneman Knight, one of the forgotten architects of the Chicago School of Economics and the teacher of Milton Friedman frequently stated in his works that the individualism of liberalism should be more accurately called familism, because the basic effective economic unit is not the individual, but the family.
And he's absolutely right.
If it wants educated, productive children, it must also pay the market price and that price is exorbitant.
At some point, US tech companies will (maybe have already outspent) the US education system k-12 and at some point surpassing all the ivy colleges just for training some ai models.
1. The existence of a permanent underclass of low paid help that made this existence possible;
2. The postwar "traditional" existence was actually a very short period in history;
3. The "traditional" homemaker role was largely because people had no choice; and
4. The top marginal tax rate in the 1950s was 91%.
The author is correct that the capitalists want us working so they can take our surplus labor value as profits. Additionally, if we have to work, even better. Coercion is a necessary and desirable condition for capitalism.
However, fetishizing "traditional" values is a common Trojan horse for radicalizing people into fascism. Hitler sold himself as a moral crusader. He told German women their role was to create more Germans. German women would get medals from the state if they had enough children. The public had to be sold on the fear of "moral decay".
Does that sound familiar? It should if you've been paying attention.
This sort of thing has infected spaces inhabited by young men too. Julius Evola, the philosopher to Mussolini before graduating to the major leagues of Hitler, extols the virtues of traditional values and gender roles. He is a darling of the 4chan suburban latch key kids.
The government doesn't need to subsidize homemakers specifically. We simply need to pay people enough so that 2 people don't need 5 jobs between them to make ends meet. As wealthy inequality worsens, population growth stagnates. South Korea is really the poster child for that now (~0.7 children per woman, the lowest of any nation).
What we do now is subsidize corporations. Walmart employees are huge recipients of food stamps. Walmart has a grossannual profit of ~$150B. Why are they being subsidized by the government instead of, you know, just paying their workers a fair and living wage?
All of these problems come down to economics, specifically capitalism. This is capitalism working as intended. I'm amazed how often I see pieces like this that recognize the problems created by capitalism without capitalism ever being blamed.