Transcript Slide 1

Session 5
Reproduction and
Gender;
Closing the Circle
Readings:
Chapters 9-10
Illustrations © by
Tony Biddle
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© Canadian Centre for Policy Alternatives, 2009
Key Topics Covered
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“Producing” and maintaining workers
Paid and unpaid labour in the home
Reproduction, work, and gender
The economic importance of households
Closing the “little” circle of capitalism
Income and expenditure
Key Terms Introduced
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reproduction
household
consumption
labour supply
discrimination
sexism
• unpaid labour
• labour force participation
• labour market
segmentation
• income
• expenditure
Reproduction: Where do Little
Workers Come From???
• For economists, “reproduction” is more
than about sex and making babies!
• In the economic sense, reproduction
means reproducing the ability of human
beings to work and produce
– Yes, this involves making babies!
– But it also involves raising and training
children
– Caring for workers (food, shelter, rest)
– Ensuring that the labour force is able to go
back to work again the next day
The “Cost” of Workers
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In a way, the household is like a “factory” that
produces workers.
Classical economists actually thought of it that way.
How much does it “cost” to “produce” a new
worker?
The cost of subsistence: that is, the cost of
keeping workers alive and ready to work the next
day.
For classical economists: wages will tend to
equal the cost subsistence – which is, after all,
the “cost” of producing workers.
In reality, workers can win wages that are higher
than subsistence wages.
But it’s not automatic and depends on their
bargaining power (more on this in Session 7).
The Work of Households
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A great deal of productive work occurs inside
the home.
Perhaps one-third of all economic work occurs in
the household.
Child care, elder care, cooking, cleaning, household
maintenance.
Much of that work is unpaid, and most of it is
done by women.
Analyzing household work (who does it, how
they do it, how is it valued) should be a central
issue in economics.
But neoclassical economists tend to ignore
household work, since it isn’t usually paid.
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The Evolution of
Household Labour
Household work has evolved in recent years:
1. Mechanization of household work: appliances.
2. Commercialization of household work: purchases for
money from nannies, cooks, take-out restaurants,
cleaners, etc.
3. Socialization of household work: some tasks (like
caring for children, the sick, and the elderly) are
now partly performed through public services.
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These trends have both assisted, and
reflected, women’s growing participation in the
formal (paid) labour market.
In most developed countries, women’s participation
is approaching that of men (especially young women).
(p.117)
Men and Womens's Labour Force Participation
OECD Average
100
Percent Working-Age Population .
90
Men
80
Gap is closing…
70
60
Women
50
40
1970
1980
1990
2000
2006
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Women’s Work:
Paid and Unpaid
Women carry an unfair burden of
household work:
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They do more of the work
They often do the less rewarding, less
valued work (eg. cleaning, cooking, caring)
This division of labour reflects sexist
attitudes, reinforced by:
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Religion
̶ Tradition
Economic pressures ̶ Violence & coercion
Women’s heavier burden of homework
undermines their paid work participation
The Wage Gap
• Women in the labour market earn about
half as much over their working lives as
men, reflecting three causes:
– Discrimination: Women make less on average
for performing the same job.
– Segmentation: Women are concentrated in
jobs that tend to pay less.
– Working hours: Women work less paid hours
over their lives than men (part-time work,
career interruptions), mostly because of
their home responsibilities.
Fighting for Equality
It will take a multi-dimensional effort to improve
women’s economic equality:
1. Men must be challenged to perform a fair
share of unpaid work in the home.
2. Employers must be challenged to treat women
more fairly at work:
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Access to good-paying jobs; employment equity
Pay equity; equal wages for equal work
Provisions to allow better work-family balance (time
off, flexibility)
3. Governments must be challenged to provide
more reproduction services (eg. child & elder
care).
Economic Road Map:
Closing the “Little Circle”
of Capitalism (Ch.10)
Where are we going,
anyway?
Drawing the Map:
The Core Elements
• So far, we have learned about several key
economic concepts:
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Workers and capitalists
Investment
Work and production
Consumption and reproduction
Profit
• Now we will now assemble them into a
picture of the core “circle” of capitalism.
It all starts with our
“capitalist” (or, more
precisely, the “major
owners and top managers”).
Seeking profit,
he or she
decides to make
an initial
investment (I).
The
investment
is used to
purchase real
capital goods
and set up a
workplace. But notice that nothing is
happening yet in this workplace.
(…Why not?)
Work requires
workers. They
live in the
working class
neighbourhood.
The workers
are hired,
and only
then can
production
begin. NOW
something is
finally
happening!.
WHY do the
workers agree
to work? Not
for the joy of
it. Rather,
they seek to
earn wages
(W) through
wage labour in
order to live.
They have no
other way to
support
themselves.
Workers spend
essentially all
their income on
consumption
(reproduction).
This is
summarized in
the slogan:
“Workers
spend what
they get.”
With their
wages they
purchase the
consumer
goods and
services (C)
that (together
with unpaid
labour in the
home) allows
for their
reproduction.
After the bills
are paid
(especially
wages for the
workers), the
capitalist gets
what’s left
over as profit
(symbolized by
the Greek
letter pi, Π).
After all, that
profit was the
point of
investing in the
first place!
The capitalist also
likes to consume
(usually highquality stuff).
Their consumption
(C) is diamondstudded!
Finally, if the
whole process
has unfolded
suitably, and
the capitalist
received a
healthy
profit, then
he starts the
whole cycle
over again
with another
investment.
Ta-da!
That’s the
“little circle”
of capitalism.
It portrays
the core
relationships
at the centre
of the whole
system.
What We Learned
From This Simple Map
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There are two dominant classes in society.
The capitalist’s investment is the initial force
that starts the cycle going.
Workers work to survive – and their wages are
how they pay for survival.
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And hence their income, once generated, is
immediately pumped back into the economy in the
form of consumption spending.
The economy is a circular process:
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Investment  production  income  consumption 
profit
This cycle repeats itself over and over again
Income and Spending
• For the whole cycle to be completed (and
then started again), the capitalist must
sell all their output.
• In other words, all income generated in
production, must be spent, in order for:
– All output to be purchased.
– The capitalist to receive (or “realize”) their
profit.
• This balance between income and
expenditure is very important to the
smooth functioning of the cycle.
Income and Expenditure:
The Little Circle (p.125)
Class
Income
Expenditure
Workers
Wages (W)
Consumption (C)
Capitalists
Profits
(Π)
Total
Economy
W+Π
Investment and
Luxury Consumption
(I + C)
C + C+ I
The capitalist has 3 potential markets to sell their output:
mass consumption, luxury consumption, and investment goods (capital
equipment). They must sell all their output into one of those markets.
Making it Work
• This is a simple map.
• But it captures the essence of capitalism:
– Production is motivated by profit-seeking
investment.
– Work is performed by wage labourers.
• And now we see what’s required for
capitalism to successfully function:
– Initial investment by the capitalist.
– Successful work by the workers.
– The successful sale of all output.
• If capitalist is optimistic, it happens again
Session #5, Student Exercise:
Where Did the Time Go???
• Conduct a survey of the adult members of your
household (including yourself), reporting on how
they use their time.
• Fill in a table summarizing how time is allocated to
various uses: paid work, unpaid work, personal
care, and free time.
• Answer several questions, and estimate the “value”
of the unpaid work performed in your home.
• See www.economicsforeveryone.com for copies of
the full exercise set and instructions.
www.economicsforeveryone.com
© Canadian Centre for Policy Alternatives, 2009