T HE H OUSEHOLD AS AN E CONOMIC U NIT

The concept of the family wage can be seen, in more abstract terms, in the context of a family as an economic unit with specialisation. In the earlier period considered here this specialisation usually took the form of one member specialising in market production; and the other in domestic production, facilitating the capacity of the first to engage in the market, producing valued domestic amenity, and investing in the next generation. The basis of specialisation is discussed further below, but its existence in a form consistent with the idea of a male family wage can be considered a necessity, in response to the nature of both domestic production (and its value in establishing living standards) and the structure of market based employment at the time of the Harvester decision, and at least for most of the following half century. On one hand, labour market demand was for full-time employees initially working a minimum of 48 hours a week spread over six days, with additional time required for commuting. On the other, domestic production was equally a task which consumed, at a minimum, most of the daylight hours of the day.85

pooling within households. While this approach is primarily concerned with the extent to which the balance of flows of income to different individuals in a household is reflected in the composition of spending, it nevertheless provides some insight, in particular as to the extent a ‘unitary’ model of household behaviour, that is income pooling and expenditure to maximise household utility, exists.

In general the evidence points against the existence of a pure unitary model (Browning et al (1994), Alderman et al (1995), Phipps and Burton (1998) and Alessie, Crossley and Hildebrand (2006)), but at least some degree of collective behaviour. Wooley (1993, 493) more broadly declares “the family utility function assumption is unsound for feminist and for methodological reasons”, with Hobson (1990, 237) arguing that “an individual’s bargaining position becomes essential to the analysis, and the question of power and dependency comes into play”. This has led to the development of a diverse set of bargaining and related models, see: Bourguignon et al (1993), Lundberg and Pollak (1993), Katz (1997), Vermeulen (2002) and, Browning, Chiappori and Lechene (2010), to better explain household behaviour.

Looking at some more specific studies, including those relevant to later discussions on family payments, as well as those using Australian data, shows a mix of results. Using individual deprivation measures as an outcome indicator Cantillon, Maître and Watson (2016) found evidence in Ireland both supportive of pooling, but also of a power/bargaining model, especially in terms of a male’s access to resources. A more specific set of studies have considered quasi-experimental data associated with changes in the structure of transfer payments. Lundberg Pollack and Wales (1997) report that a shift in the payment of child allowance to wives in the UK in the 1970s led to increased spending on women’s and children’s clothing relative to men’s, a pattern suggestive of incomplete pooling. This finding was confirmed, using expenditure micro-data, in Ward-Batts (2008). In contrast Bradbury (2004) found that the individualisation of income support payments in Australia had no impact, suggesting pooling. Breunig and McKibbin (2012) find evidence of partial pooling both between partners in couples, and between parents and young adult children residing with them.

85 _{As further discussed (sections 2.5.1 and 2.5.2), while the production of ‘necessities’}

did not necessarily involve a full-day’s labour, domestic production also produced a range of amenities, such as variety in food, clean clothing, and an amenable physical home environment which were increasingly valued.

The services provided by domestic production could be procured by workers in the paid workforce in a number of ways: within the family, for married men, and for employed children living with their family; purchased in the market place in the form of board and lodging; or for some higher income households through employing servants. NSW Census data for 1901 provide some insight into this. Some 4.4 per cent of the population were lodgers, of whom 40 per cent lodged with private families and the same proportion in boarding houses, and 20 per cent in hotels. The same source indicates that 9.2 per cent of private family households had a servant.86

The economic understanding of this relationship, while perhaps at the time and later subsumed into a narrative of gender roles, was well established at the beginning of the twentieth century.

It must be said that working-men have a much clearer idea of the

economic value of a wife in the home than have men in other stations of

life. Not because the wives of workmen do the actual work of the home – that cannot be the reason, for there are few houses in all Australia where the women are not forced to do more or less housekeeping because of the scarcity of help – but in one case, the wife is regarded as a producer equal with the man, and in the other, women are usually considered consumers and non-producers, housework notwithstanding. (Ackerman 1913, 80).87

This understanding is also found in the declaration in The Woman Voter in 1915, in response to a question about allowances for wives, “we do not recognise the terms ‘his income’ and ‘dress allowance’. A wife is a contributor to the joint income … A man does not make an ‘allowance’ to his wife for her needs any more than he makes an ‘allowance’ to his partner in business” (12/1/1915, 2). In this article the author also cited writings by the English suffragette and social activist, Emmeline Pethick-Lawrence, which presented the economic relationship as: “Husband and wife are mutually dependent upon each other for support, and together they maintain their dependents, the young children of the family”.

86 _{Derived from NSW Census (ABS Census 1901. Table XXIV p.542).}

87 _{A further issue which arises from consideration of domestic production concerns its}

identification in economic measures. This has several elements. The most significant is the exclusion of people undertaking this form of production from measures of employment. Second is the exclusion of domestic production from measures of economic production, including the measurement of Gross Domestic Product. (See for example Waring (1998), Aslaksen and Koren (2014) and Varjonen and Kirjavainen (2014).)

Here this issue has several implications. The first is that in discussions on labour market participation, while the focus is on participation in the paid workforce, this is primarily in the context of market participation relative to domestic production, and not the neoclassical economic framework of a ‘labor-leisure’ choice (see for example Borjas 2010, 27). Secondly, as will be discussed in section 2.6.9, a question arises around the extent to which shifts between these two labour market states is associated with the ‘marketisation’ of domestic production. Thirdly, as discussed in Chapter 5, some caution needs to be exercised when comparing the potential consumption capacity of households with differing capacity to undertake domestic production. Fourthly, it is recognised that in the analysis in Chapter 6 the measure of GDP used not only underestimates the value of total production, but may also overstate GDP growth if such marketisation has occurred.

Postulating the creation of a household as an economic unit implies an objective for this. While for some classes this was associated with property rights and political/economic allegiances, more generally this can be seen as maximising consumption across the lifecycle. Initially this was achieved through potential economies of scale and returns from specialisation, and then through the production of children, and investment in them, to generate a potential flow of resources when their own productive efforts reduce through age. This latter mechanism is potentially also impacted by altruism within the family – a desire to see the next generation thrive – potentially with an underlying biological driver.88,89

With changes such as: greater access to credit markets, including for investment in education; increasing state intervention in areas such as retirement incomes, and support in the case of sole parenthood and unemployment; and a more easy meeting of basic needs, it can be argued that the need for these responses has diminished, and may be responsible for changes in the family structure of society. This in turn can be argued is leading to a situation where the demand for a family as an economic unit is reduced, and indeed that this has occurred. Alternatively, it has been suggested that the returns now come in a different form. This is what is argued by those identifying the concept of a ‘hedonic marriage’. Here the benefits for the partnership are not in terms of production and its contribution to consumption, but rather in the returns from shared consumption; that is, where the value of consumption of a couple is greater than that of the two members individually undertaking the consumption (Stevenson and Wolfers 2008, Wolfers 2009).90

2.5.1

T

HE

R

OLE OF

D

OMESTIC

P

RODUCTION

In addressing families in the early twentieth century, as noted, an important dimension was the value of domestic production to household amenity – to the quality of life. The work of Goldin on this is considered further in section 2.6.8, but of relevance is the initial income effect of increased earnings associated with a wealthier society resulting in what she describes as a shift where “women’s work is often implicitly bought by the family” (1995, 62). The underlying driver for this is, that as the living standards of a society move above that of subsistence, a wide range of additional forms of consumption become possible, with many of these being able to be produced domestically. Dimensions of this include: improved food choices, especially the quality and

88 _{A mechanism for this is given, for example, in the ‘selfish Gene” hypothesis}

(Dawkins [1976] 2006). This argues that an individual’s genetic material seeks to survive and replicate itself, including through sexual reproduction into successive generations. Altruism towards children to ensure they survive and prosper provides a means for this to occur. Case, Lin and McLanahan (2000) report some evidence of this in research on data for the US and South Africa which measured the relative spending on food for biologically close and genetically unrelated children of a mother.

89 _{McDonald (2001, 4) presents a more contemporary reading of the motivation for this}

investment as: “today’s parents probably do not usually expect a monetary return on their investment in children; rather it is a fear of the social and maybe financial cost of a child ‘failing’ that is the motivating force”.

90 _{Coontz (2005) documents a history of marriage as an evolving institution in a much}

variety of meals; improved levels of personal cleanliness; and improved housing amenity, both with regard to cleanliness and the maintenance of a wider range of household furniture and accoutrements, including solid flooring.91,92

This pattern of change has been considered by several authors. Mokyr (2000, 1) suggests that “increases in knowledge on the causes and transmission mechanisms of infectious diseases persuaded women that household members' health depended on the amount of housework carried out”. De Vries in his Industrious Revolution explanation refers to “consumption goals … [that] included improved health, better nutrition, and better housing … reduced exposure to germs ... more elaborate equipment for the storage and preparation of food, and more varied diet; or domestic comfort, effective heating and ventilation, privacy, and symbols of social respectability” (2008, 189).

This latter point is also seen in Pfau-Effinger’s (2004) alternative sociological model, suggesting that the mechanism was that of social practice, and the driving force the development of an urban bourgeoisie. More specifically she argues that this social class had new individualistic ideas of the nature of children and a need for them to be socialised into society within the domestic sphere of the nuclear family. Her analysis then uses the relative patterns of development of this class across three European countries and the patterns of married women’s workforce participation over time. She concludes that it was “the development of that socially and culturally predominating class itself which was primarily relevant for the evolution of the male breadwinner model into the dominant cultural model” (390). Folbre argues a process which involved a “recharacterisation of household labour with a tendency to treat women’s household work in moral rather than economic terms” (1991, 469)”. 93,94,95

91 _{While not all of these were needed to be produced domestically and many of these}

items were in fact available in the market, and were purchased by higher income households, for those with a lower earnings rate the ‘work and purchase’ trade-off, compared to home production, was negative.

92 _{These issues are also covered by Coontz (2005), with a focus on the US. She}

discusses the emergence of the ‘Male Breadwinner Marriage’ in terms of “in the early stages of the cash economy most families still needed someone to specialize in household production … it was very hard to combine all the heavy work involved in running a household with the hours required to hold a job outside the home … a full- time housewife’s work at home could usually save a family more than she could earn in wages” (155).

93 _{This type of socially driven model can be seen as possibly a form of identity}

economics or, depending upon the actual merits of child focus of the model, a form of investment in children.

94 _{A more extreme possible interpretation of this bourgeoisie behaviour is that of}

conspicuous consumption, or as put by Veblen, a man having a wife “who consumes for him conspicuous leisure; thereby putting in evidence his ability to sustain large pecuniary damage without impairing his superior opulence” ([1899] 1922, 63).

95 _{To the extent that Pfau-Effinger argues that denser urban settlement was a factor in}

driving the adoption of the model (2004, 394), the Australian argument would appear to be weaker, given the strong association between female paid employment and urban settlement. See footnote 136.

Tracking actual changes in amenity are difficult. But even the meal which both Pip and Nell complain about in Seven Little Australians, “Boiled mutton and carrots and rice pudding” (Turner [1894] 2010, 10) was a vast step up from the description of the diet of Lancashire workers in 1864, largely comprised of “bread, oatmeal, bacon, a very little butter, treacle, and tea and coffee” (Drummond and Wilbraham 1957, 332).96 _{An even stronger contrast}

with this earlier diet can be seen in the recollections of the food cooked in working class waterfront households in Sydney at the turn of the twentieth century. While bread still played a key role, “there are memories of porridge, eggs, bacon and toast for breakfast, roast meat, steak pies, stews and soups for main meals; and steamed and plum puddings, cakes, scones and sweet pies and tarts for dessert” (Beasley 2004, 186).

Such change can also be seen in other fields. The recurrent theme in newspapers and literature of weekly clothes washing indicates this was close to the standard, although Davidson (1986, 150) suggests this may have become entrenched in the UK by the mid-nineteenth century. In the working class area of the Rocks in Sydney the value of housing amenity can also be observed in the archaeological work of Karskens who documents evidence of decorations such as figurines and vases and possessions such as clocks and pictures, and notes that photographs of the era “reveal glimpses of wallpaper, and lace curtains” (1999, 156).

The value of these amenities to the quality of life, but also the cost of them in additional workload, was recognised at the time: “but modern women have learned that the attractiveness of a modest dwelling can be greatly enhanced by skilful arrangement of comparatively inexpensive accessories, which give an air of cheerfulness and comfort to the apartments. A home furnished in this way, however, needs far more attention than did the austere interiors of similar houses half a century ago” (Register 23/9/1905, 6).

In addition to these dimensions of consumption, this was also an era of demographic change. The second half of the nineteenth century, and in particular the final decades, had seen a massive fall in fertility. Jones (1971, 327) reports a fall in a measure of total fertility (If )97 _{from a rate of 0.492 in}

1861 to 0.401 in 1881 and 0.276 in 1901. Caldwell and Ruzicka (1978) place considerable emphasis on the role of education, which had grown rapidly over the nineteenth century as a driver.98 _{A key mechanism behind the effect of this}

on fertility was the role of education in increasing the cost of children. In addition to the potential direct costs of education, this involved supporting them for an extended period, and a delay in their entry into the labour market and hence potential financial contribution to the household. This effect was further enhanced by the emergence of white collar jobs, skilled trades, and

96 _{In a similar vein Davidson references the writings of Sir Charles Shaw who had been}

Commissioner of Police in Manchester to report that in the Midlands in the 1830s working class families “existed off wheaten bread and potatoes, washed down with tea or coffee, and lived, for the most part, in filthy houses” (1986, 184).

97 _{This measure is a ratio of the actual fertility rate relative to the ‘Hutterite’ rate –}

essentially a measure of the potential unconstrained fertility of women.

98 _{Specifically they report: “half the children probably had some schooling in the}

1850s, three-quarters in the late 1860s, and nearly all by 1880” (Caldwell and Ruzicka 1978, 93).

related forms of employment, which required at least basic educational skills, but also provided opportunities to obtain higher paying employment, with these providing a powerful incentive to focus on the ‘quality’ and not ‘quantity’.99

A further effect of compulsory education on fertility is highlighted by Quiggin: “With the introduction of compulsory schooling, children were removed from the house during the day just at the age when they were becoming of some value in easing their mothers’ workload” (1988, 81). This in turn had consequences for the period over which a woman was solely responsible for undertaking domestic production.100,101

2.5.2

H

OUSEHOLD

P

RODUCTION AND

T

ECHNOLOGY

I could see my life, stretching out ahead of me, barren and monotonous as the thirsty track along which Harold was disappearing. Today it was washing, ironing tomorrow, next day baking and after that scrubbing – thus on and on. (Franklin 1901, 311)

So were the thoughts of Sybylla in Miles Franklin’s 1901 classic My Brilliant

Career.

At the beginning of the twentieth century the task of domestic production for a household, at the standards of living which were being aspired to, was an

In document The Australian Minimum Wage and the Needs of a Family (Page 59-72)