Authored By: Arnab Sinha:
Blessed by a sudden off day at work, yesterday, I called up my old time friend Richa. She is an HR pro who till last November was working with an FMCG major. She got married in December and eventually quit her job to move in with her husband- who was based out of a different city. “Marriage doesn’t change too many things, life is same”, she tried to play down my attempts to scare her with pending nuptial responsibilities. “The pain is when you are labeled a housewife”, she quipped, recalling that a week back the Census guys were at her place. As part of their demographic profiling duty and not convinced that she was simply between jobs, the field officers had put her in the ‘Housewife’ bracket. “I am aghast”, she yelled with her trademark scream.
Adding salt to the wound, I pointed her to a Census theory, which classifies housewives under economically non-productive category of the Indian population. Quoting a news article (link here),
“This bias is shockingly prevalent in the work of Census. In the Census of 2001, it appears that those who are doing household duties like cooking, cleaning of utensils, looking after children have been categorized as non-workers and equated with beggars, prostitutes and prisoners who, according to Census, are not engaged in economically productive work.”
We laughed at the callousness of this classification. “If I don’t cook and do the dishes, my hubby will not be able to put in the 10 hours at work. And that will be real loss to the economy”, she argued with a naïve credibility in her voice. She almost hung up on me, when I reminded her that Census being a decennial exercise, she will remain a non-productive citizen for the next ten years. As we ended the call, I pondered at the intricacies of this pressing issue.
Needless to say, the heart of the problem is absence of any explicit market for housewives – which means no demand and supply curve and hence no equilibrium price. Much of the economics research these days is centered on these typical dilemmas- situations where the market fails – from pollution to population control. Most of these studies single around a popular concept in economics - opportunity cost
– which is the cost of alternative that must be forgone in order to pursue a certain action. Putting simply, if you decide to do an MBA after your engineering, the opportunity cost of your decision is the salary you would have earned if you worked instead.
Taking the opportunity cost hypothesis into our case, we can arrive at a model for pricing housewives. Say, your mother, a pediatrician leaves her full time job, to take care of her kids and never joins back the workforce. She quits at the age of 33, was drawing Rs X per annum and retirement age for her service is 60 years. Assuming no increment in her salary, the opportunity cost of her decision is Rs 27X (27 being the number of years left for retirement) at today’s prices. Since this is the cost of the alternative she is foregoing, a fair price for her being a housewife is therefore, Rs 27X.
Of course, this model has its own fallacies. Purists will argue that not every housewife will have a viable alternative and hence no opportunity to forego. This necessitates a more complex method of evaluating the housewife price. I will call it the weighted average method of pricing.
Assume our housewife, Mrs Sharma, multitasks between cooking for her family and teaching her kids. For simplicity, let us say that these are the only 2 household activities she indulges into. Everyday, she spends a good 2 hours to cook and 3 hours to teach. Also assume, in the free market, a hired cook charges Rs 120 for a 6 hour cooking job and a private tutor commands Rs 500 for a 6 hour teaching session per day. Since Mrs Sharma is cooking for 2 hours and teaching for 3 hours, she is working 33% of a full time cook and 50% of a full time tutor. With our assumptions, Mrs Sharma’s daily price for household activities is therefore (33% of Rs 120)+ (50% of Rs 500) which is Rs 290.
Since a typical housewife dons the hats of a chef, a nanny, a teacher, a maid and so many other things, the market based price of these roles can be weighted down and summed up to arrive at a fair valuation of her contribution.
How do you price the housewife who is pregnant? Does a market exist? Ask the surrogate mother, how much she charges to rent her womb. (Interesting, huh?)
Sparing a thought for our Census Board, replicating these academic models into real life is a challenge indeed. Irony, it might seem, the easiest to price among the non-productive categories are the prostitutes. A market already exists and is certain semi-organized red light areas there is a demand and supply that can be fairly measured and price is regulated. Without going into the ethics of the issue, one can broadly say that simple legalization can take them into the productive half of the population.
One of the many reasons why housewives should be priced is to calculate compensation packages in the event of an untimely death. Many a times, people are short changed citing non-productivity of housewives. Read this article, here, for more interesting insights into the same.
As we leave for the day, can you think of similar pricing approaches for beggars? Whack your brain and put down your thoughts.
Postscript: Are prisoners productive? A Raja’s one year tenure as Telecom Minister resulted in a loss of Rs 22,000 crores to state exchequer. If he serves six month tenure in Tihar jail, how much will the nation save? Do the arithmetic!
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