Unpaid work is worth so much to the UK economy

21st April 2016 / United Kingdom

The value of unpaid work in the UK economy has been calculated at a staggering £1tn, according to new ONS data. And this annual £1tn of value doesn’t come from the so-called ‘grey economy‘ of undeclared work (cash-in-hand jobs, but where no tax or national insurance is paid).

Rather, it comes from the types of unpaid activity that are not normally considered work at all: childcare, looking after the sick and elderly, private transport, DIY in the home, laundry and other housework. The study, released last week, is important because it officially quantifies ‘home production’ in the UK economy. It shows that the proportion of GDP attributed to unpaid work has grown by 3.9 per cent, from 52.2% to 56.1%, between 2005 and 2014.

As a society, we don’t recognise, celebrate, nurture or redistribute this valuable unpaid work. Every quarter the latest GDP figures are quoted and wrangled over by politicians and the media, while the value of domestic work is seldom discussed.

This is deeply problematic for a number of reasons. First, not only is the unpaid economy on a par with the paid economy in terms of hours worked, but it also lays the foundations for the paid economy to function. This is why it is known as the core economy. Without the unpaid work that goes on in the home, the “real” economy would grind to a halt.

Every employee in the country is the result of innumerable hours of unpaid childcare. Indeed, the latest ONS figures show that informal childcare is thelargest component of the unpaid economy – 31% in 2014 – and that its value grew by an average of 6.0% per year between 2005 and 2014. This was due to the rising hourly cost of private childcare.

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Another problem is gender inequality. Women still do much more childcare than men, despite the myth of ‘new fathers’ who do more. In failing to properly value and support unpaid work, we are failing to recognise women’s double burden of paid and unpaid work following the huge influx of women into employment over the last half-century. As a consequence, we fail to deal with the negative effects that the burden of unpaid work has on women’s chances in the labour market.

Rebalancing how we value unpaid work

Properly valuing, distributing and supporting unpaid work won’t happen overnight. It will involve long term cultural change that is reflected in policy too. Here are three suggestions for how we can start to move in the right direction:

  1. Publish the value of unpaid work on a quarterly basis, alongside quarterly growth rate figures. The research on the unpaid economy that the ONS has been undertaking since 2002 is a great start. But quarterly announcements on the size of the unpaid economy would be more effective. This would improve public understanding of how important unpaid work is to our daily lives, as well as to the economy as a whole.
  2. Increase collective provision of care work, blending paid and unpaid time to make it more equal. Take childcare, for example. A mix of childcare cooperatives –means of childcare that is collectively owned by the staff, or parents – and more public provision of childcare would be more efficient (freeing-up parents to do other valuable paid or unpaid work) and fairer (reducing the childcare burden that currently falls disproportionately on women).
  3. Redistribute paid work. As NEF has consistently argued, reducing the length of the working week could rebalance paid and unpaid work across our society. Starting by reducing the working week to 30 hours would create far more opportunities for sharing paid and unpaid work more equally between women and men. While there is little evidence to suggest that men would do more housework and childcare just because they spend less time in paid work, changing expectations about what is ‘normal’ will help, over time, to change attitudes and patterns of time use, and gradually to break down gendered divisions of labour.

Governments are fixated on growing the “real” economy. But it’s time we started organising society in a way that takes into account the enormous value that the core economy adds to our society and economy.

Article by neweconomics.org – economics as if people and the planet mattered

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