Download 1 Austerity and Women`s Unpaid Work Alicia Girón1 (draft paper for

Austerity and Women’s Unpaid Work
Alicia Girón1
(draft paper for discussion)
JEL codes: J16, D53, G01
“Too the politician and administrator
laissez-faire was simply a principle of the
ensurance of law and order, at minimum
cost. Let the market be given charge of the
poor, and things will look after
themselves”.
Polanyi, 1934
1. Introduction
The objective of this paper is to examine the unpaid labor that underlies social
reproduction, which in feminist economic theory is a commitment to be assumed by the
State. The relationship between unpaid work and social reproduction as a priority task of
the State is forged through public policy. In turn, this public policy impacts the care
economy and unpaid work, the cost of which is passed on to the family unit. As a result
of economic stabilization policies and austerity programs, the burden of social
reproduction has shifted even more to women and men in their relation to the course of
the economic cycle. In the context of the Great Crisis and the Great Recession
worldwide, it is time to posit the question as to who should be bearing the cost of the
reproduction of a nation's labor force, as policy alternatives grounded in orthodox theory
and austerity become increasingly widespread, both of which are exacerbating
unemployment.
2. Unpaid Work, the Monetary Theory of Production, and Provisioning
The point of departure to study unpaid work from the feminist perspective through the
monetary theory of production resides in “[...] the need for an understanding not only
about the place of money in economic provisioning, but also about its role in sustaining
gender ideology. Thus, the focus here is on the monetary production process and its
relation to the social construction of gendered perceptions of market versus non-market
spheres” (Todorova, 2009:3). Looking at the economy through the lens of economic
provisioning, Julie Nelson asserted that, “Adam Smith, for example, defined economics
not as simply about choice and exchange, but also as about the production and
distribution of all of the 'necessaries and conveniences of life,' placing emphasis on the
1 Alicia Girón, Economic Research Institute, National Autonomous University of Mexico (UNAM),
[email protected]. The author is thankful with Andrea Reyes (CONACYT’s scholarship) for the support in
making of this paper. 1 things that human beings need to survive and flourish” (Nelson, 1995:143). By viewing
economics as the science of provisioning, rather than the science of the study of the
scarcity of human resources, feminist economics establishes a relationship with the
monetary theory of production, by regarding human beings not only as rational beings but
also as people with emotions. “Such a definition of economics, as concerned with the
realm of 'provisioning' breaks down the usual distinction between 'economic' (primarily
market-oriented) activities and policies on the one hand, and familiar or social activities
and policies on the other” (Nelson, 1995:143).
In post-Keynesian theory, the monetary production economy encompasses both the
production and the circulation spheres as the basis for relations of exchange. To this is
added aggregate demand, derived from the search for employment, which will define the
relationship between the macroeconomic and microeconomic realms through public
policy. As such, it is through public policy that the mesoeconomy is related to the family
unit. Monetary income derived from paid work continues to be the core of the household
economy, but so too is caregiving for social reproduction, which is unpaid work. In a
monetary production economy, unpaid labor is closely tied to public policy.
The backbone of the economic sciences is therefore provisioning, and not the principle of
resource scarcity. In her discourse on scarcity, Strober points out that “...Keynesian
thinking fits with the thinking of feminist economists. A cardinal principle of feminist
economics is the one that Adam Smith enunciated more than two centuries ago:
economics must be concerned first and foremost with the process of ‘provisioning’, ‘the
fulfillment of human beings’ material needs” (Strober, 2015:2). When provisioning is
taken as the cornerstone of economics, it is easier to understand the causal relationship
between family members and care in social reproduction based on a moral sentiment.
Care is an unpaid activity, which can benefit in times of economic prosperity through
public policies arising from increased public spending. When the income of members of
the family unit rises, a portion of this unpaid work can be delegated to people outside of
the family. It is precisely during this upturn of the economic cycle that the labor carried
out by employers and employees, in tasks related to the care economy, becomes
remunerated work. If the core of monetary, fiscal, and financial policy is taken as the
fundamental foundation for job creation and the guarantee of equitable wealth
distribution in an egalitarian society, then social reproduction is ensured. On the contrary,
when the economic cycle reaches peak growth and production plummets, this prompts
deflation and austerity is imposed.
3. Conceptualization of Work and the Paradigm of Productive and Unproductive Labor
This paper is focused on unpaid work, whose activities are carried out within the heart of
the family unit, but for which the Welfare State is responsible. Therefore, economic
policy would influence these activities, which, in the feminist economic school of
thought, are characterized as those activities taking place within the sphere of the care
economy. The importance of this topic resides in making visible this unpaid work, whose
cost is traditionally relegated to women.
When women joined the labor market en masse starting in the interwar period between
the First and Second World Wars, developed economies, and a few countries in which
2 industrialization began early, enacted public policies to promote the insertion of women
in the labor market and to boost the care economy. Another distinctive feature of the era
was the technology revolution in the kitchens of middle-class families in the United
States. This revolution subsequently flooded the needs of the middle classes in early
industrialization countries. The household technology revolution transformed the role of
women within their families. As such, “The industrialization of the home was a process
very different from the industrialization of other means of production, and the impact of
that process was neither what we have been led to believe it was nor what students of the
other industrial revolutions would have been led to predict” (Schwartz Cowan, 2011:97).
Households gradually shifted from a rural to an increasingly urban model, in which
women slowly joined the labor market beginning with this technology revolution. From
the end of the post-war period until the beginning of the 1970s, the Welfare State,
through public policy, helped drive the incorporation of women into the paid labor
market, moving away from household activities to working as paid caregivers in the care
economy.
Beginning with the structural collapse at the dawn of the 1970s, the International
Monetary Fund (IMF) began to play a larger role in international economic policy, and
the care economy became increasingly privatized, transforming into the domain of the
family unit. The emergence of caregiving in family life through stabilization plans and
austerity policies over the past forty years has permitted the State to disregard care, not
only in terms of labor power reproduction but also making work increasingly precarious.
This economic cost once again devolves upon the family, principally on women,
escalating family violence and eroding society itself.
In this research, it is important to define work or labor as that activity which dignifies a
person, encompassing both paid employment and unpaid activities. Neoclassical,
Marxist, and post-Keynesian economic theory are grounded in the paradigm of paid
work. To reflect the diversity and convergence of both types of labor as a fundamental
category of life, it is imperative to include in a heterodox analysis both paid and unpaid
activities in society, based on the central concept of provisioning. By placing the
sustainability of life above capital reproduction at the crux of its analysis, feminist
economics confronts the market, whose core concept is resource allocation rather than
provisioning (Pérez, 2014). As such, “...feminist economics is an academic program, but
also a political one. It is not governed by the sterile pretense of describing reality (as the
neoclassical economists generally do), but rather by the policy objective of transforming
it into a more egalitarian reality. That is why feminist economics seeks to strengthen the
development of economics as a social science and multidisciplinary approach, in dialogue
with other schools of thought, disciplines, and political movements” (Rodríguez, 2015:
32).
Feminist economic theory understands work as a category that is divided into unpaid and
paid activities. Labor carried out through activities in the production and circulation
spheres earns a salary. At the same time, paid work is accompanied by unpaid work. The
latter refers to activities performed primarily by women—both for the very fact of being
women, and due to a social and cultural order established by a patriarchal society—
consisting of the reproduction of the labor force and its care, an economic activity for
which no wage remuneration is given.
3 Feminist economic theory refers to the work that women have traditionally performed
with no pay as the activities carried out in the framework of the care economy.
According to Picchio, all of these activities completed in the sphere of unpaid labor are of
vital importance as necessary activities for social reproduction. In this way, “…the
accumulation of capital introduced a separation between the processes of production and
the processes of social reproduction of the labouring population” (Picchio, 1992:9). It is
precisely unpaid work that sustains life, with regard not only to the care economy but also
to all human relationships of social welfare between individuals in an economic, political,
and social space.
It is essential to note in the course of this essay that both paid and unpaid activities are
considered to be paramount in both the monetary theory of production and feminist
theory. “Labor power is ‘produced’ in the sense that in a monetary production economy it
requires money income that is subject to the monetary production process. Alternatively,
the labor force ought to consist of ever-functioning bodies subject to no harm and
‘depreciation’ through time and space; there is neither birth nor death” (Todorova,
2009:55). Paid and unpaid work may seem to represent separate activities, but in their
abstraction, these two categories in fact become indivisible. These two concepts
symbolize diversity and convergence at the same time. In their abstraction, both
constitute a fundamental category of life.
As such, the traditional division of labor in society asserts that productive labor is any
activity that is performed in return for a wage, principally in the productive sector.
Productive work is that which earns an income. Activities that do not yield any
remuneration are characterized as unproductive work. This essay assumes a causal
relationship between the two spheres, in which for analytical reasons, it is possible to
divide paid work from unpaid work. This division is the paradigm of neoclassical
economic theory and serves for statistical purposes. The failure to recognize unpaid work
as part of life and social reproduction obstructs any attempt to analyze public policy and
parse the complexity between the macroeconomic and microeconomic spheres. There is a
connection to economics as the social science of provisioning. Labor is not a commodity,
as demonstrated by Polanyi (1944), nor is it like broccoli (Prasch, 2004). Even Todorova
asserts: “...at the same time, labor power should not be reduced to a piece of steel or
broccoli (Prasch, 2004). The time and effort spent in household activities are qualitatively
different from the wage relations underpinning the production within the business
enterprise. Here the term ‘input’ signifies only that socialization takes time and within a
monetary production economy depends on money income. Indeed, as Karl Polanyi (1944
[1992], 78) argued, labor is a ‘fictitious commodity’” (Todorova, 2009:55).
One of the core principles of Polanyi's writings regarding the paradigm of economic
theory is the definition of labor, land, and money as fictitious commodities. Polanyi
writes: “...labor is simply the activity of human beings, land is subdivided nature and the
supply of money and credit in modern societies is necessarily shaped by government
policies” (Polanyi, 2001:28). If labor is the activity of human beings, land is part of
nature, and the supply of money and credit are instruments that serve to apply public
policies, then the circle closes around the concept of “social reproduction”. The paradigm
of neoclassical theory is the control of labor as a commodity that serves capital
reproduction and the attainment of wealth. In Marxist theory, wealth is seen as the result
4 of the surplus necessary for expanded reproduction in capitalism. In this way, the
cornerstone of economic theory resides primarily in labor as a commodity, not only as a
need for reproduction and capital accumulation, but also as an incentive to create
effective demand and maintain balance in the capitalist economy.
In a contrary way, “conceiving labor, land, and money as “factors of production,” they
treated those fundamental bases of social life as if they were ordinary commodities and
subjected them to market exchange. The effects of this “fictitious commodification,” as
Polanyi called it, were so destructive of habitats, livelihoods, and communities as to spark
and ongoing counter-movement for the “protection of society” (Fraser, 2013:228). The
Great Transformation interest in social reproduction is one of the aims of interest of the
feminist theory.
4. Austerity, Public Policy, and the Social Reproduction Crisis
The mandate of austerity traverses the activities of financial institutional investors in
capital markets. The public policy adjustments needed for debt service payment are
closely intertwined with monetary transactions with creditors and foreign investors
abroad. The State relinquishes its powers to become a minimalist state where public
spending on health, education, housing, and infrastructure works is shifted to private
entities. Simultaneously the mandate of austerity intervenes in negotiations to restructure
the external debt service and the commitments entered into during times of prosperity
with institutional financial investors. The end of the boom years entails the decline of the
paid work sphere and the rise of unpaid labor.
Defining austerity and its relationship to public policy broadens our understanding of the
social reproduction crisis. Strober mentions, “…Economic austerity is defined as a
decline in government spending to reduce government deficits. The policy is prescribed
by those who believe in it even when it results in a great deal of pain--even when it
results in further job loss and a decrease in economic growth. The word austerity
conjures up suffering, severity, sourness, harshness, self-denial, and scarcity. In its
economic sense, it is meant to convey the need for a country’s inhabitants to take bitter
medicine to cure its economy’s illness, that is, to cure the recession that caused the
decline in tax revenues, and hence the larger deficit in the first place” (Strober, 2015:1).
Now, from the perspective of the monetary theory of production, Parguez defines
austerity “...as more Hayekian than Hayek by proposing the following enunciation as
basic law: blocking the spending capacity of internal agents is the only objective, the
raison d'être of economic policy. The more their means of spending are reduced, the more
society can be enriched” (Parguez, 2013:162). For all of the above, the link between the
macroeconomic and microeconomic spheres is that public policy is subsumed by the
interests of the financial markets.
Cutting public spending in order to pay off foreign creditors was the defining feature of
the lost decade in Latin America, along with the Washington Consensus in the 1980s. In
fact, the policy alternatives for the Asian crisis were very similar to those that prevailed
during the lost decade in the Latin American region. There were “… imposed cuts in
public expenditure though the underlying problem was not a budget deficit; and instead
5 of drawing attention to the strong real economies of most of the afflicted countries, it
emphasized the need for much more thorough liberalization of markets and major
changes in corporate governance, doing nothing to restore confidence among panicking
investors” (Elson, 2002:7). Nowadays, the return to austerity as the hegemonic policy in
the space of the European monetary union is just another example of how the payment of
sovereign debt has broken down social reproduction.
To explain how the market dismantles society, Polanyi considers labor, land, and money
as commodities that thwart social reproduction. He writes: “Real market societies need
the state to play an active role in managing markets, and that role requires political
decision making; it cannot be reduced to some kind of technical or administrative
function. When state policies move in the direction of disembedding through placing
greater reliance on market self-regulation, ordinary people are forced to bear higher costs.
Workers and their families are made more vulnerable to unemployment, farmers are
exposed to greater competition from imports, and both groups are required to get by with
reduced entitlements to assistance. It often takes greater state efforts to assure that these
groups will bear these increased costs without engaging in disruptive political actions.
This is part of what Polanyi means by his claim that 'laissez-faire was planned;' it requires
statecraft and repression to impose the logic of the market and its attendant risks on
ordinary people” (Polanyi, 2001:29-30).
Since the collapse of the Bretton Woods monetary system, public policies have
constituted the channel, mechanism, and platform to bring about structural change.
Himmelweit wrote: “...the tendency to see money as the only means of meeting needs
divides time into that for which one is paid and that in which the money so earned is
consumed. This reinforces and is reinforced by the tendency for paid work to become
more 'work'-like: to conform increasingly to that abstract characterization of work that
makes a complete separation between workers and their work, squeezing out personal
and relational aspects of jobs in the pursuit of efficiency. One result of these tendencies is
an immiseration of paid work, in which all other reasons for having a job are sacrificed to
gaining the highest wages. Time spent in employment is no longer regarded as having
possible benefit in itself, except to earn money to spend elsewhere” (Himmelweit,
1995:13).
It is essential to note that unpaid work in the framework of the care economy is not only
vital to the reproduction of labor power but is also critical for the economy. Baker and
Feiner recognize that “…unpaid household labor is now recognized as crucial to every
economy, yet all over the world unpaid domestic work is still the province of women.
Women and men now engage in paid labor in nearly the same proportions, but the
responsibility for child and dependent care still falls mainly to women. Women add more
to household income than ever before, some women’s total work time exceeds men’s by
at least two hours per day. The unprecedented growth in career opportunities for
educated, privileged women is accompanied by rapidly increasing numbers of poor
women employed as domestics, caring for the children of the privileged” (Baker and
Feiner 2004:1).
Even as structural adjustment policies have encroached upon public policy, these
adjustment policies have gone hand in hand with recurring currency devaluations, the
reduction of the public sector deficit, the deregulation and liberalization of capital flows,
6 and the reorganization of the labor market. This is tied to the insertion of national and
regional economies in the globalization process (Benería, 1999). The objective has been
to subject public policy to the financialization process. This type of public policy
principally impacts women. To Karamessini, “Austerity is expected to have negative
effects not only on demand for female labour but also on access to services that support
women as carers, thereby often compelling them to substitute for cutbacks through
increasing unpaid domestic labour” (Karamessini, 2013).
It is important to note that, “…the accumulation of capital introduced a separation
between the processes of production and the processes of social reproduction of the
labouring population” (Picchio, 1992:9). Paid labor and the necessary accumulation of
production engenders structural change in society, where the cost of unpaid labor must
fall to the State through tax policies and public spending on multiple activities, rather
than being absorbed by the family unit.
5. Conclusions
Who should bear the cost of the reproduction of a nation's labor force? Over the years,
studies published by feminist economists (Folbre, 1994) about the expanded role of
women in the labor market and the increasingly blurred role of the Welfare State have
consistently shown concern for the work performed by women within the family unit.
Attempts to measure unpaid household labor have led to methods such as the time-use
approach to highlight inequalities between family members. Moreover, these studies have
generated the need to search for more ways to delve into the study of inequality, not only
in the labor market but also within the family unit. Over the past four decades, recurring
crises have frequently prompted stabilization plans and credit restructuring, as well as
renegotiations with creditors and institutional financial investors in the financial markets.
The decision that countries have made to allot public spending towards paying off debt
service and enter into commitments with foreign powers has undercut the capacity of
public spending, principally in the realms of social, education, and health spending. All
of this has impacted public policy.
The past forty years illustrate how public policy has been designed to benefit private
interests, relieving the State of its responsibility in the reproduction of labor power and
the cost this reproduction entails for maintaining society. Austerity became firmly
entrenched beginning with the Great Crisis. The public policy alternatives to deal with
the downturn of the economic cycle bear the hallmark of austerity. Meanwhile, the Great
Recession is once again recasting paid and unpaid labor and destroying what the Welfare
State managed to achieve in years prior, as austerity has reshaped employment, spurring
men to take on tasks traditionally reserved for women within the family unit. Structural
change and employment hiring are undergoing legislative modifications by fostering
labor flexibility and even the entitlements that ephemeral labor unions have achieved.
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