Ann Romney’s Job: How much is a housewife worth?

Democratic lobbyist Hilary Rosen struck a nerve when she accidentally insulted the nation’s stay-at-home moms by saying Ann Romney, mother of five, “never worked a day in her life”. Her ensuing apology, like many pundits’ commentaries, emphasized that parenting is hard work. But politics and stigma aside, what are homemakers actually worth?

Here is one idea from the Justice Department, as of 1979: ”The home production that is a woman’s primary responsibility is obviously not work. Since no money is paid for the services, it is not only not work, it is valueless.” Ouch. At the time of that statement, a pack of feminists and economists were thinking just the opposite—that it was time to put a validating price tag on homemakers’ efforts.

Ambitious divorce lawyers pushed the issue by calling economists to court as expert witnesses. Making a wife’s at-home contributions concrete could earn her a bigger slice of the family assets. Michael Minton famously popularized this tactic by earning handsome maintenance payments for the wife of a Sears vice-president. He argued her annual contribution was $40,288.

Where does a number like that come from? The first option compares the value of equivalent services. In other words, if the homemaker’s work were completely taken on by a team of equally capable nannies, chauffeurs, cleaners, nurses, cooks, personal consultants, financial managers and child psychologists, how much would that cost?

This “replacement cost method” can put home contributions in the same ballpark as the breadwinner’s salary. But replacement costs are hard to calculate realistically. The alternative and also flawed “opportunity cost” method tracks how much money the homemaker would earn per hour in the workplace.

Macroeconomists use both these methods to try calculating the total value of unpaid “household production” in society. For example, a 2011 report from the Organization for Economic Cooperation and Development (OECD) valued household production in the United States at 2.6 trillion dollars per year, or about 24 percent of GDP. That is twice the size of the U.S. manufacturing sector.

In other words, it takes real work to run a household. But the same OECD numbers suggest that paid work is almost three times as valuable per hour  as unpaid work. That might let breadwinners feel superior, except that Salary.com tells the opposite story with a replacement-cost calculation that puts the average worth of a “mom” at $112,962, which is well above the average U.S. wage.

These calculations are messy. Not only is the price of homemaking up for debate, but it might not be fair to compare incomes. After all, can all the effects of bringing a family through the world be quantified? Yet this whole exercise highlights a key fact: when economists zoom into parents’ activity at home, it looks a lot like a diverse succession of paid jobs. Doing the laundry and managing tantrums may be thankless, but it is important work that deserves thanks.

  • http://www.friendlyfearnoteboook.com Lee Anne McClymont

    “The hand the rocks the cradle, rules the world.”

    Thanks for this article, Jose. Lee Anne McClymont

    “The Hand That Rocks The Cradle Is The Hand That Rules The World” is a poem by William Ross Wallace that praises motherhood as the preeminent force for change in the world. The poem was first published in 1865 under the title “What Rules The World.”

  • mimi

    value of a housewife = add all services she provides at home monthly:
    * housekeeping:[dusting, cleaning, washing, polishing, shopping, ironing, mending...] costs if you hired any specialist (f.e.: a housekeeping who clean all your house twice a week might cost you 100 euros/ dollars but you might need to pay extra for shopping, ironing and etc.
    * chef:[breakfast, brunch, dinner, supper, special occasion cooking...] cost of meals you would pay at the high quality restaurant. Now i say High Quality for 2 reasons – ingredients are bought fresh and are cooked fresh without mass production chemicals. Depends on how many times per day you eat at home and on the ability of a housewife to cook.
    * psychologist: housewives like bartenders and waiters hear unwillingly the testimonials of their customers and though one might refuse to respond to the talking, they are still forced to hear the misery out. A housewife not only has to listen but usually gives an advice or shows support and calms her husband – that’s what psychologist does. For a lot of money (100$-500$ per hour!)
    * entertainer:[trip planning and executing, improvised going outs, everything she stops doing to cheer her man up] now depending on various activities starting from telling a joke and including intimacy. Germany’s brothels charge starting 49EUR/visit for their services.
    * Personal Assistant/ Secretary:[paying bills, cancelling/continuing
    contracts for various insurance companies, reminding of upcoming events,
    some housewives are well-educated and might provide assistance
    professionally in their domain. Highly skilled secretary (legal,
    personal CEO assistant) can earn starting 25,500$ a year.
    * Stylist:[man's attire adviser, house deco arrangement...] cost of having personal stylist accompanying the shopping, home decorator’s advices on the outlook of each rooms plus housewives update the deco from time to time.

    These are all costs I could come up if there are just 2 people in the family. If your family has pets, children, elderly people, add:

    * Child care professional:[feeding, nursing...] depending on child’s age – a housewife tends to a child up to 18 h a day! An Au Pair nanny can cost starting 8$ per hour.
    * Pet care professional:[feeding, walking, tending, playing, taking to doctor...]
    * Elderly care professional:[nursing, tending...] elderly companion might ask starting 19$ per hour.

    And all this a housewife does daily! I raise my hat for the ladies who do this their whole lives and I hope they are rewarded accordingly. I personally prefer to work because of the social insecurities a housewife has to face when it comes to medical insurance, savings and pension and prejudice. Why would one hate a housewife? Because she does so much and government/greedy corporations do not get money for it! That’s why. And i know my list might sound as if a housewife had no bad days and would never cause a problem. Yes, she might not be a perfect ‘specialist’ of all these spheres and might throw a tantrum but a housewife does all these things listed above and in some cases adding the lower list to her constant, continues, daily routine. A man spends most of time working on mainly 1 thing, earning money for it, having social acceptance and economical independence. The rest is already taken care of.