Today, I have a guest post on the real reason that a stay at home mum apparently doesn’t contribute to economic growth. It’s a cracker of a piece by the awesome Rebecca Bowyer who blogs at The Lighter Side of Parenting and maintains History of Parenting– which is a great place to spend some time and find out all about how previous generations raised their kids. Anyway, over to Bec!

Janice (not a real person, but bear with me) is a stay at home mum. She has two kids, aged 3 and 8 months. She works 16 hour days caring for them and running a household while her husband goes out and earns money.

Next year Janice will return to her job as an accounts manager. She’ll earn $36,000 for working three days a week. She’ll spend $600 a week on childcare and $70 per fortnight on a cleaning service to help her keep up with the housework. Every Friday she’ll spend $30 on takeaway for the family because nobody’s had time to cook.

Next year Janice will contribute $70,850 to Australia’s economic growth, including the services she provides and the ones she pays for.

This year she contributes nothing, even though she provides an in-home childcare and domestic management service virtually 24/7.

Why is that?

It’s actually fairly simple: Janice doesn’t contribute to economic growth this year because domestic housework and childcare are not counted as part of Australia’s Gross Domestic Product (GDP).

Ok, you can get your fingers out of your ears now (yes, I can hear you going ‘LA-LA-LA-I-CAN’T-HEAR-YOU-WTF-IS-GDP’). It’s really not that scary.

GDP is what the politicians are referring to when they get all emotional about our need to drive economic growth to maintain living standards. GDP is the number they’re trying to increase when they talk about encouraging women to enter the paid workforce in an attempt to drive economic growth.

But what is it? GDP is basically ‘the total market value of all goods and services produced within Australia in a given period of time.’

Going back to our fictional but totally real SAHM above, Janice contributes to GDP when she:

• pays for childcare for her kids
• pays for a cleaning service for her house
• buys takeaway from the local fish and chips shop
• provides an accounts management service to local business.

But here’s the catch: housework and childcare are counted in GDP only if you pay somebody else to do it. So you can raise four kids in a house by yourself and be seen as contributing nothing to the economy. OR you can pay, say a family daycare centre to look after your four kids – in an environment exactly the same as your house – and it’ll contribute to economic growth.

Crazy, huh?

Oh, but it makes sense when you think about it, right? I mean, no money changes hands when you stay home with your own kids. So it shouldn’t be counted.

Uh-huh. But on the other hand, the house you live in contributes to the economy simply by being there. It’s one of the few quirky things that are counted in GDP even though no money has changed hands. The bean counters figure out ‘a value for owner-occupied housing by using the cost of rental housing that has comparable space and amenities to owned housing.’

Huh? Ok, try this: you live in a three bedroom house in Camberwell in leafy Melbourne (lucky you, nice suburb). You own it (what, you won the lottery?). The GDP bean counters figure if you rented it out you’d get about $400 a week for it (yeah, ok, so it’s a bargain – you haven’t been looking after it). So they write down that your house, that sits there and does nothing, contributes about $20,000 a year to GDP.

But all that work you do inside the house? The blood, sweat and tears raising the next generation of taxpayers? Nada. Zilch. Zero. You’re just a drag on economic growth.

So why isn’t parenting counted as a service in GDP?

Given that we know a stable and enriched early childhood contributes substantially to creating well-adjusted, productive adults, shouldn’t the services parents provide be counted as an economic contribution?

Well it would seem that there’s not necessarily any ideological opposition to it. According to the United State’s Bureau of Economic Analysis: “There has been virtually no conceptual disagreement with the inclusion… It adds to our production,” Mr Landefeld says. “But the problem is that it’s terribly difficult to measure, and we simply don’t have the instruments to do so.”

Oh, I see. It’s just too hard. Diddums.

Well, good news, guys. Steven Nelms recently did the hard work for you. He calculated that his wife, a stay at home mum, should earn a wage of around $73,960 (USD), based on market rates. If he can do it, I’m sure you can figure out a way to crunch the numbers too.

The truth is that parenting and housework are not included in the GDP because a decision has been made not to. It’s that simple.

Deciding what we put a price on, and what we don’t, as a society, is fairly arbitrary at best.

For example, we’ve somehow decided that the price of a kilogram of a pretty sparkly golden-coloured metal is around $48,000. When it comes down to it, it won’t help you much if you find yourself stranded in the middle of nowhere with nothing to eat.

And yet the price of a kilogram of a bananas, which are much more useful in everyday life, is just a few dollars (unless you lived through the Great Australian Banana Drought of 2011 when they rocketed up to $25.00kg).

Including housework and child rearing in GDP might not change the day-to-day economic reality of households, but it would raise the value of ‘women’s work’ in the political domain.

It also might make governments a bit more chillaxed about trying to kick women out the door to go and get a ‘real job’ to drive this mystical magical economic growth figure.

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#IBOT with EssentiallyJess