By Kevin D. Williamson
Tuesday, January 28, 2020
The fact that it is so economically difficult for most
families to have one stay-at-home parent sometimes is presented as evidence
that the economy isn’t working the way it should. Looked at another way, that’s
exactly backward: Families find it much more difficult today to have a
stay-at-home parent mostly because the labor market now values women’s labor
much more highly than it once did.
Economic justice is here, ladies. Enjoy it!
In the Eisenhower-era economy, a working woman could
expect to earn something on the order of 59 cents for every $1 earned by a male
counterpart, according to census data. The wage gap was actually a bit larger
in the early 1970s. But in 2020, that has changed: Women’s real wages have
risen about 60 percent since 1980, whereas men’s wages have risen about 6
percent. Among married couples, two out of five wives outearn their husbands.
Women in their early 20s earn more than men in the same age cohort. All
of this points to a labor market that no longer discounts work done by women.
Naturally, a lot of women are unhappy about that. A lot
of men, too.
Think of it this way: If you want to have a stay-at-home
mother (stay-at-home fathers are a thing, too, but let’s not pretend that this
is a sexually neutral question), then dear old Dad has to earn enough to do two
things: 1. Provide the desired standard of living for the family, and 2. Buy
Mom out of the labor force on behalf of the firm of Family, Inc.
As women’s relative value in the labor market has
climbed, that has become a more expensive proposition. In a situation in which
a wife’s potential earnings are half her husband’s, taking her off the labor
market represents a hit of 33 percent to the couple’s potential joint earnings.
If they have roughly equal earnings potentials, then her staying at home
reduces their income by half. If she’s a recent graduate earning $60,000 to her
husband’s $40,000, then taking her off the market reduces household income by
60 percent — a big hit.
One of the things that may have contemporary couples
feeling this even more sharply than they would have in a stereotypical 1950s
family is increasingly fierce socioeconomic sorting, i.e. the fact that we now
tend to marry spouses who have similar earnings potentials. An Eisenhower-era
lawyer was less likely to be married to another lawyer than a contemporary
lawyer is. In situations in which the wife’s potential earnings were only a
small fraction of her husband’s, having her stay at home imposed only a very
modest opportunity cost.
I can hear some of my populist friends already demanding,
“Why should my family have to compete with the Fortune 500 for my wife’s
time?” That’s just another way of saying, “Why should I have to live in a world
with scarcity in it?” And scarcity is real — it is not optional, it is not
something invented by economists, nor something that has been foisted on the
world by conniving capitalists.
If you want a world in which women’s work is highly
valued in the labor market, the opportunity cost of taking women out of the
labor market is going to be high.
Another way of looking at the issue is this: Women’s
labor is valuable, and it is going to be consumed in any case, whether the
woman in question does paid work outside the home or does not. Families with a
stay-at-home mother pay a price for consuming her labor, just like they pay a
price for tuna and Netflix.
That’s why Elizabeth Warren and Amelia Warren Tyagi get
it slightly wrong in The Two-Income Trap. In an interesting interview
with Mother Jones (well worth
reading in its entirety), Tyagi argues that “a big part of the two-income
trap is that families have basically bid up the cost of living.”
A generation ago, an average family
could buy an average home on one income. Today you can’t do that in
three-quarters of American cities. . . . A lot of that has to do with public
schools. As confidence in the public schools has dwindled, people are bidding
up the prices on homes in those school districts with good reputations; so for
a typical family, the only way to afford one of those homes is to send mom to
work. . . . Of course that’s where you see the trap. If families were simply
sending Mom into the workforce and using that money to build their savings, or
to have more fun, or to go on more vacations, you wouldn’t see the same kind of
financial trap.
There are a lot of unspoken assumptions in that, of
course. For example, our houses are bigger (both in absolute terms and in
per-resident terms) and better appointed than they were a generation or two
ago, and shopping the elite school districts is something characteristic of
relatively affluent families rather than struggling ones — another example of
the fact that our policymaking discussion is dominated by and reflects the
interests of elites who are well-off but not as well-off as they would like to
be. That’s why middle-class tribunes such as Senator Warren spend more time
talking about college loans than high-school dropout rates. But where Tyagi and
Warren get it wrong is this: That labor already was valuable, irrespective of
whether women entered the formal work force or did not. There isn’t any way it
wasn’t going to be priced.
(The story of women’s entry into the labor force in the
modern era is sometimes exaggerated: In the 1950s, a third of U.S. women
already were in the labor force, with the number rising to about 60 percent by
the turn of the century.)
Even in the relatively narrow world of oil, with an
industry dominated by state-run firms, OPEC can’t manage to run an effective
cartel — how much less likely is it that American families would be able to
cartelize women’s labor? Or that American families are going strategically
shift their consumption patterns away from bigger and nicer houses toward more
expensive vacations . . . because Amelia Warren Tyagi thinks they should?
There are many women who would prefer to stay at home
rather than enter the formal work force — affluent and educated people may fret
about their careers, but most people just have jobs that they
would not do if they did not need the money. Senator Warren et al. think that
government should make it easier for them to do so. So do many on the right.
But there are also Republicans and Democrats who want to
make it easier to be a working mother, for instance by subsidizing child care
and parental leave. Though everybody’s hearts may be in the right place on
these issues, as a purely economic question, the two sides’ policy goals
probably would end up working at cross purposes: Subsidized child care would
operate in effect as a wage subsidy for mothers, raising the cost of buying
them out of the labor force by making the opportunity cost of being a
stay-at-home mom higher. Tyagi acknowledges as much in her Mother Jones
interview, arguing that subsidies for working mothers should be offset with
subsidies for stay-at-home mothers, “in the hopes that that would offset the
competition between families. Otherwise, you’re providing even more financial
pressure on one-income families, and forcing those remaining stay-at-home
mothers to enter the workplace in order to keep up with everyone else.”
The last six words there — “to keep up with everyone
else” — really tell the story. Tyagi insists that the underlying problem is not
irresponsible consumption, and it isn’t: It’s just consumption. We
compete as producers, but we also compete as consumers. There isn’t any clever
way around that. Money, properly understood, is only a record-keeping system, a
way of simplifying the fact that all the goods and services available in the
marketplace are in reality priced in terms of all the other goods and services
in the marketplace. Giving somebody $100 doesn’t change the supply of houses,
avocados, or Honda Civics in the world, which is why having the government
write every American a check for $1 billion wouldn’t give everybody a
billionaire’s standard of living. Subsidizing consumption for one group of people
is generally going to leave the unsubsidized group relatively worse off,
because we compete as consumers in a world of scarcity.
That doesn’t mean that we shouldn’t subsidize some kinds
of consumption, e.g. through programs for very poor people, for children, for
people with disabilities, etc., or through such consumption-smoothing programs
as old-age benefits. But we should be mindful of political incentives, which
tend to convert good intentions into bad programs. Very clever-seeming
policies (for example, the grievously misnamed Affordable Care Act) end up
being a lot less clever in practice. That’s one excellent reason to prefer less
clever-seeming but much more straightforward social-welfare policies such as
sending poor people money.
There’s no getting around economic reality, and whatever
programs we may design to help families live the way they want to live, we
should start by recognizing that. Making it easier to be a stay-at-home mom is
not a matter of labor-market regulation or housing policy — it’s a consumption
subsidy.
We know what Mom’s labor is worth to the Fortune
500. What’s it worth to you?
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