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.