Care and the post-pandemic economy
The two latest crises of capitalism – that of 2008 and the Covid-19 crisis – have highlighted the importance of care and the urgent need to transform the economic system so that not all the responsibility falls on women’s shoulders. In the post-pandemic economy, broadening the system of care is also an opportunity to invest and create jobs.
The care economy is a relatively new concept, introduced by feminist economics in the early 1990s before spreading rapidly within feminism as a whole. In Catalonia and Spain, it has developed especially intensely in the last two decades, because of the 2008 crisis and, above all, as a result of the current pandemic. The content of this concept has deeper roots, which are important to keep in mind.
Care has always existed as fundamentally feminine work, but as women have joined the labour market, the issue this work raises and the need to solve it have intensified. People have been writing about this for decades. In 1934, American economist Margaret G. Reid published the book The Economics of Household Production, in which she argued that the domestic economy is an integral part of the economic system. The 1970s saw the emergence of the so-called domestic labour debate – first in Europe, then in the USA – which encouraged discussion around the economic importance of work in the home.
But it was in the eighties that the domestic economy debates intensified and started to include concerns regarding the lack of statistical information on women’s work. We realised that labour statistics all over the world ignored or underestimated the work done by women, as employment rate estimates did not include unpaid (domestic) work or other labour outside the home that did not go through the market. It was time for an overhaul of these statistics, but those in charge did not take this issue seriously. The year 1987 saw the publication of the book If Women Counted, by politician and New Zealander Marilyn Waring, which explained that a national increase in arms production translated as a rise in GDP, while an increase in hours of domestic work did not count at all.
It was not until the World Conference on Women in Beijing in 1995 – convened by the UN – that the urgent need to take domestic work and all care tasks into account was made official internationally. It is worth noting that economists at the time, most of whom were men, had not bothered to study the issue of care and related work within the domestic unit because, as Nancy Folbre points out, they deemed that women took care of it through love for their children and family. It was not considered an important enough topic for economists to examine. Meanwhile, some women economists analysed the issue from a very different angle, including Folbre herself, who defined care as the heaviest burden carried by women, not men, on a microeconomic and macroeconomic level. Similarly, here in Spain, feminist economists have long been emphasising the idea that this burden represents the ‘sustainability of life’ that makes social reproduction possible.
A problem that had no name
As women gradually joined the labour market – in some countries earlier than others, but eventually, all over the world – this problem that had no name intensified and spread. It also became more visible as the two latest crises of capitalism took hold (2008 and Covid-19), showing us clearly how important care is, especially as a result of the pandemic of the last two years.
Many women had to resign because they could not combine their job with looking after the children and domestic work during the lockdown.
We know that the Covid-19 crisis has had negative consequences for women all over the world and has emphasised gender inequalities when it comes to labour issues. In May 2020, United Nations data repeated by the UN Secretary-General indicated that all kinds of gender violence had intensified in countries where data was recorded; that, on a global scale, women were carrying out 75% of the domestic work; and that, among women in employment, a disaster was occurring, as many of them had to resign because they could not combine their job with looking after the children and domestic work during the lockdown. Other women were left without work, income or protection of any kind, especially those who worked in the informal economy (60% of the employed population) and those at the bottom of labour hierarchies all over the world. Workshops and factories closed and global business plummeted. Globalisation had feminised the workforce, and this was a kind of deglobalisation. For most women, losing their job meant that they did not receive any financial remuneration of any kind.
According to the most recent UNESCO data, 72.4% of children in 177 countries have been affected by closures of schools and nurseries, and families have had to improvise solutions, such as seeking help from grandparents, with the risk of infection that entails. The closure of schools has isolated families, who have often had to look for solutions alone. In countries like Belgium, Croatia, Greece, Luxembourg, Portugal and Switzerland, between 30% and 37% of grandmothers and between 24% and 31% of grandfathers have looked after their grandchildren during the pandemic.
The traditional view of the economy is now criticised. During the pandemic, closures and restrictions affecting schools and nurseries led to unbearable tensions. For example, in the USA, an official report estimated that ten million parents – especially mothers – had to leave their job, with all the negative consequences that entailed for the family and for the economy. The Biden Administration saw the importance of this human infrastructure and put forward a generous budget for care and other family needs, which Congress approved in late 2021 (though this measure is still stuck at the Senate). They had realised that the pandemic was putting social reproduction at risk and that families – and the economy – needed more help than they were getting.
Worldwide, all countries have faced the challenge of how to build or transform the care system to fulfil families’ urgent needs, and many of them have adopted new assistance programmes. For example, Austria, France, Germany and the Netherlands introduced a childcare service programme for essential workers. Argentina, meanwhile, launched the ‘emergency family income’ to benefit 3.6 million families in need. Other countries have introduced payments for workers in the healthcare sector, as is the case for Italy, or have increased the assistance already being provided for caring for elderly people or children.
In Catalonia and in Spain – like everywhere else – it is becoming widely accepted that care is fundamental for the economy and our lives to function and is as essential as schools or hospitals. What is more, the influence of demographic factors, such as the ageing population, on care is constantly growing. Life expectancy in Spain has reached 83 years for men and 86 for women (and continues to rise). There is therefore a need to broaden care provisions for elderly people, and we cannot assume that families will take care of them on their own. With the sharp rise in the rate of employment among women – from 35.6% in 1978 to 74.6% in 2017 – the figure of the housewife has practically disappeared. We cannot allow care to continue to be the responsibility of women only, especially with all the patriarchal assumptions and gender inequalities this entails. For this reason, there is a growing acceptance that care, both of the young and of the old, must partly be the State’s responsibility. Parts of care are already ensured by the State – in the fields of health and education, for example – but the pandemic has highlighted the system’s shortcomings, and we must face the challenge of finding solutions that ensure equal opportunities between the genders.
Broadening the system of care is also an opportunity to invest and create jobs in the public and private sectors. The public sector has to be funded through the tax system, and this can generate opposition from parts of the population that do not want to pay more taxes despite an increase in productivity. We must overcome these obstacles through conviction of the sector’s importance and by implementing transformative structural changes. So, what should these changes involve? According to a UN report, first of all, existing care must be maintained and the burden on women and girls must be reduced. But that alone is not enough: we need to organise the public sector so that it can undertake new initiatives as a result of experience from the pandemic. A second sphere of action should be the reduction of socio-economic inequalities between families and communities when it comes to access to care. Thirdly, care work must be recognised as essential, and workers in the care sector must therefore be deemed essential and receive social protection. In other words, in the post-pandemic recovery period, care must be dignified.
We hoped that the post-pandemic economy would be very different to the neo-liberal model, but efforts to implement the necessary changes are complex and vague.
The post-pandemic economy
The pandemic should be a major wake-up call to make us think about the crises and serious issues we are contending with and speed up our responses, and not just in terms of the dangers of future viruses. It should drive us to correct errors and tackle the challenges we face as a civilisation and economic system: the climate emergency especially, but also the economic and social inequalities caused by poor distribution of goods and wealth, which generate deep wounds and threaten the balance of our societies. We hoped that the post-pandemic economy would be very different to the neo-liberal model imposed in recent decades, but efforts to implement the necessary changes are complex and vague.
Many predictions and speculations have been encouraging. For example, Thomas Piketty has criticised the ideology of hypercapitalism, which he says has gone too far, and put forward a post-capitalist system that is ‘a new form of socialism, participative and decentralised, federal and democratic, ecological, multiracial and feminist’, though he does not believe we will achieve this any time soon. But as a post-pandemic reality emerges, we are also seeing the intensification of negative, disheartening trends. For example, according to a UN report, though inequalities in the distribution of income between countries and people fell in the 1990s, they have risen again recently, and this trend is only getting stronger, due to an increase in the highest incomes and a relative decrease in the lowest. And though the distribution of income among countries has improved, distribution within each country has got worse, due to the domination of the financial and tech sectors within the worldwide economy.
Meanwhile, profits are growing for multinational corporations, especially the tech companies that do not pay taxes in proportion to their profits. The European Commission estimates that these companies pay 9.5% in corporate tax, when the average for ordinary companies is 23.3%. One of the reasons for this is an obsolete tax system that has not been adapted to the disruption caused by the internet. In 2018, the four subsidiaries of Amazon in Spain had a turnover of 490 million euros and paid 4.4 million in taxes. Brussels cannot come to an agreement on how to audit these companies’ profits. Jeff Bezos, the founder and executive chairman of Amazon and one of the richest men in the world, has become an expert in avoiding tax obligations. When he made the jump from the USA to Europe, he set up the company’s headquarters in Luxembourg, a country with various legal loopholes that allow companies to pay very little tax. As pointed out by Pierre Moscovici, a politician from the French Socialist Party, ‘our pre-internet rules do not allow our member states to tax digital companies operating in Europe when they have little or no physical presence here’. For now, only France has dared to make the move to tax tech corporations specifically. This change was implemented in 2019, after EU member states’ efforts to apply a common rule had stalled. Countries like Luxembourg, Ireland and the Netherlands, which have made their low taxes a way of encouraging corporations to set up their headquarters there, have failed to act.
Through economics, we can draw a path that, to a certain extent, is already evident on the margins of economic thought and in the experience of the economic policies States are following. The essence of capitalism, since Adam Smith formulated its foundational ideas, is its entrepreneurial spirit based on the economic man, or Homo economicus, who maximises his profits through the invisible hand of the competitive market, thus contributing towards maximising national income. This is the message we have received through the economic theory taught in the vast majority of economics faculties. Despite multiple economic crises, capitalism has led us to economic growth without precedent in the history of humanity, and we have reached very high levels of consumption, though this is distributed unevenly between countries and their inhabitants. Neo-liberalism is the version of capitalism we have lived under in the last five or six decades. This is an extreme capitalist model where the economic has permeated everything, even affecting decisions previously belonging to other spheres, such as individual decisions about education. Globalisation has caused this message to spread, spurred on by the opening of the financial markets, the liberalisation of trade, increased consumption and the movement of people, always backed up by economic theory’s Homo economicus and market.
For any of us not convinced before, the pandemic has clearly shown that this model has reached unsustainable levels. Economic theory, from classical economics to recent years, has always assumed that the natural resources at our disposal are limitless, infinite. But we now know these assumptions to be false. The planet’s biodiversity is deteriorating and many species face extinction. Fossil fuel reserves are finite, and on top of that, using them generates huge amounts of air pollution. We must decarbonise production if we want to avoid reaching suffocating levels of carbon dioxide. Other natural resources (forests, seas, oceans) are suffering from the abuse unleashed by humans through excess use and consumption. Climate change is making itself known more and more forcefully, with serious incidents caused by the weather and rising sea levels, which invade islands and coastal areas and cause increasingly severe population displacement problems. This grave environmental crisis has led us to question whether the maximisation of production and economic growth should be humanity’s goal and whether Homo economicus – who makes decisions selfishly, without considering their externalities – should be the figure we take on in our economic models. The answer is no: we cannot afford to continue with these assumptions, given their catastrophic consequences.
But what models could replace the Homo economicus in the post-pandemic economy? What could a post-capitalist economy look like? The dogmas of the Washington Consensus – introduced in the seventies by economists like Nobel Prize winner Milton Friedman and by institutions like the World Bank, along with many other representatives of the dominant economic and political world – are caving in. Are we entering a new economic paradigm?
 UN Flagship Study, 2020.
In Catalonia, many small businesses are adopting the principles of the social and solidarity economy (SSE).
It is clear that the public sector is coming through with responses to urgent social needs in many countries. We can also see that people are realising that the privatisations typical of the neo-liberal model and the way the market works have caused many of the problems we are facing, such as the growth of inequality, which seems unstoppable under the current system. Some economists, like Dani Rodrik of Harvard University, are looking at the new theoretical and practical directions a new economic model could take. Other economists, who have been critical of the system and of economic teachings for years, such as Samuel Bowles of the Santa Fe Institute, offer an alternative vision of economic behaviour. They are part of the international group CORE, which has published a textbook that is being used widely in higher education in the Anglosphere and in the occasional Spanish university. In contrast with orthodox economics, they do not assume the existence of a selfish, maximising Homo economicus; instead, they focus on people and institutions with solidarity as a key value and social aims that affect their decisions. They also consider power dynamics, like those implicit in the labour market and financial relations.
Literature is emerging from within capitalism that questions businesses with solely economic goals, and no social aims. Rebecca M. Henderson, a Harvard professor and author of the book Reimagining Capitalism, explains that the biggest waste management company in Norway, Norsk Gjenvinning, was transformed by its new CEO, who decided to leave behind a previous model that had fostered corruption and damaged the environment. And this is not the only case of companies transforming within the system, although, for the system itself to change, all companies would need to do this. In Catalonia, many small businesses are adopting the principles of the social and solidarity economy (SSE), with aims entirely different to those outlined in the dominant texts in our economics faculties. Let’s hope that the Homo solidarius wins this battle we face, and that care can benefit from the victory.
- Género, desarrollo y globalización. Una visión desde la economía feministaBellaterra, 2018
Lourdes Beneria is an economist, professor emeritus at Cornell University (USA) and expert in economics and gender studies. She has advised international bodies like the International Labour Organisation and the United Nations Development Fund for Women.
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N122 - Apr 22 Index
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