False Economy: New Zealand Face the Conflict Between Paid and Unpaid Work

by Anne Else
Tandem Press

Robin Fleming
Independent Social Scientist and Social Policy Analyst

The challenge that faces policy analysts advising on proposals for new policies is to foresee the hidden effects and the downstream costs of change. I find it difficult to believe that even the driest and most cynical analysts involved in the economic reforms of the past ten years would have pressed ahead with the same idealism, had they had the benefit of the understanding of the effects of those reforms Anne Else offers in this book.

The major policy changes that were set in place in those years were based on a belief that if you get market forces right, society will find its own equilibrium, and the provision of goods and services, jobs and wages will fall into a balance that will somehow suit everyone. The role of government is therefore to create conditions under which market forces can operate unimpeded on a "level playing field".

What this book demonstrates is that the market, that is the part of the economy which involves the provision of goods and services for money, exists within a context of unpaid work. An enormous amount of work is done outside the market by people in their homes and in their communities to provide goods and services which underpin the operation of the market and support its very existence. Those who work in the market require meals, clean clothes, rest and recuperation and a range of other services which enable them to continue with their marketplace endeavours. Children are raised and their education is organised so that they can grow up to take their place in the paid workforce. People who are sick and people with disabilities are cared for. Else describes this unpaid work as a transparent trampoline which keeps everyone going by bouncing them back into market activity, revived and re-energised. According to her analysis, economic reform has resulted in more unpaid work being done, but less time being available for it.

While some caring work is provided within the market, by schools, hospitals, restaurants and so on, the market does not generate enough money for all people to buy all the care and support services they need. The unpaid sector fills the gap. The reforms of the past ten years have seen some of this work move from the market to the non-market sector. For example, despite increases in health expenditure, shorter stays in hospital and longer waiting lists mean an increase in unpaid care:

The more delay and anxiety there is over health care, the more free caring work someone, somewhere has to do to take up the slack.

Education reforms mean that it is unpaid parents who now provide the school administration which was once the job of paid departmental staff. These changes have added to an unpaid workload which has, in itself, become more complex over the years.

The trouble with these shifts in the workload, as Else points out, is that they are not only unpaid, they are invisible. The work is not accounted for and therefore the increased load that has resulted in home and community can be ignored in policy development.

On the other side of the equation are the changes that have taken place within the market. The social effects of freeing up the labour market are illustrated in the first hand accounts with which the book is illustrated. These personal stories offer convincing evidence that a family now requires two incomes to make ends meet and to provide some measure of income security in an insecure job market. They show the pressure on time within families struggling to hold down two paid jobs as well as doing the third, unpaid and invisible job of keeping the household running and supporting school and community. The stories make it quite clear why more and more people are turning to the state for support because they can't manage.

There are those who still argue that women in low-income families should stay at home and save money by providing more through their work in the home. But the "family wage" which would enable this to happen is, according to Else, long gone. Back in the 1950s it was possible for most men to support their families on their wages, especially if they were augmented by their wives' provision of home-made clothing, home-grown vegetables, and home baking and preserving. At that time, a woman's recognised task was to run the home. Although this model has some disadvantages, it did mean that women's unpaid domestic work was visible.

However, this kind of arrangement is no longer feasible. Modern transport and trade mean that it is actually more expensive to produce many household products than it is to buy them. The costs of knitting yarns for example are often higher than ready made imported garments. Home grown vegetables are ready just when a glut n the market means their production costs in terms of seeds, fertilisers and so on exceeds the prices of large-scale producers. And, more importantly, a single wage cannot provide for the family's basic needs.

So women are now in the labour market alongside men, or as the examples show, they are working instead of partners who have been laid off and cannot find work. And the unpaid work still has to be done.

The nature of household work has changed since the 1950s. It no longer involves the simple chores of baking, bottling and sewing, but it has taken on a more complex, more managerial function. Women nowadays are often the money managers for the family, and their job of shepherding children through health services, education and training is a complex task involving a range of skills and interaction with a number of organisations. Where children once entered the labour market at 15, they are now in education of some kind until they are into their 20s.

As the men and women interviewed in this book so clearly demonstrate, people today are living under more and more pressure, running faster just to stay in one place. They are what Else calls the "time poor", caught in a tug of war between two clashing worlds, between market time and the time for family life and unpaid work. Inevitably, because the household was one the women's domain, it is women who bear the greater share of the burden.

The first step towards redressing the balance, Else suggests, is to give unpaid work visibility, and the way to do this is to measure it. Because time is the common resource for work of all kinds, the best way to measure unpaid work is to measure the time people spend on different activities. In countries such as Canada and Australia, time use surveys are used to provide measures of goods and services provided in homes and communities. They represent a surprisingly large proportion of a country's productivity. Estimates of the value of domestic work put it at between 40 per cent and 60 per cent of the gross domestic product. In omitting to measure unpaid work, we are omitting to count a very large section of the country's economy. We are also unable to measure the way sections of work shift across the boundaries of paid and unpaid work.

The United Nations Statistical Office is responsible for the System of National Accounts according to which countries calculate their economic production. The System of National Accounts now includes recommendations that governments produce household satellite accounts of services that fall outside the boundary of production as it is currently measured. A number of countries have responded to this recommendation, using time use surveys as the basic data for the production of accounts of household productive work. But although New Zealand piloted time use survey methods in 1990, a full-scale time use survey in this country has yet to be undertaken.

Canada has gone so far as to develop a system of Total Work Accounts, bringing together paid and unpaid work. Initiatives of this kind are valuable because they provide data which makes unpaid work visible and set it alongside paid work to demonstrate how unpaid domestic work and unpaid voluntary work in the community support work in the paid labour market. A truly accurate picture of the complete economy is thus available for the first time.

At the same time, the pressure on individuals of combining paid and unpaid work in a context where unpaid work is ignored is also made visible. Analysis of Canadian time use data has identified a "time crunch" suffered by families with young children where both parents are trying to combine paid work and family care. Not surprisingly, the time crunch falls most heavily on the mothers.

Once the situation is documented in this way, it is easier to argue for policies that reflect and support economic input from both paid and unpaid work. Some of the ideas currently being discussed in Canada in response to the Total Work Accounts system include measures to protect income for periods devoted to domestic work, measures of compensation in cases of illness or inability to perform domestic tasks, the possibility of legislation for leave of absence to care for sick family members, and assurance of financial support for caregivers who leave their jobs or reduce their hours of work to provide care.

It is important for policies to recognise that families on low incomes or dependent on the state are still making a contribution to the economy through their care for their children. Forcing everyone into paid work ignores the importance of such unpaid contributions, as it ignores the barrier to taking on paid work which caring responsibilities represent. Else makes a number of suggestions for changes to help those trapped in poverty, including a free tax zone at the bottom of the earnings scale to make it easier for people on very low incomes to survive, and a universal basic income.

False Economy invites a major rethink about the nature of work and the way today's economy affects the lives of people within it, and it does so with deceptive clarity. Else manages to present a complex and sophisticated analysis in a thoroughly engaging manner and an easily understandable style. The text is interspersed with first-hand accounts of the experiences of twelve New Zealanders, including some "ordinary" New Zealanders, and some well known personalities. What these interviews show is that, while there are some people who are having to struggle just to keep going, no-one is exempt from the "time crunch", the struggle to combine paid and unpaid work. And what they illustrate most graphically is that the costs of this crunch include some of the things New Zealanders most value, those things that are beyond the power of money to buy. Else concludes:

Without families and communities, the economy means nothing. It has no life of its own. Its only purpose is to enable us to live, to care for one another and to raise our children to take our place. If we lose the power to do that, no matter how fast the gross domestic product rises or how much the budget surplus grows, we will have no future worth working for.