Economies need people

Photo by Lighthunter.

Care has largely been ignored in economics until quite recently. Economics thinks of itself as being about how economies keep going, how they reproduce themselves, what is necessary for them to keep going, and they have, but they have largely ignored the fact that they actually need people. People not only need to eat, but they also need to be cared for. We don't suddenly spring into being as workers and live our lives and then conveniently die when we finish working. People at various points in their lives need care and economies cannot function without them.

Care is something that everybody needs, just like they need food, but care has some real differences from food. First of all, it's not a thing. It's something that other people do for you. It's a service, one that has to be delivered at the same time as it's received, so unlike food or any of the other sort of consumer goods that people need, it can't be that somebody does it in one place, then sells it, has it delivered and it’s consumed at another time. Care is a service that has to be consumed at the same time as it is produced. It also has to be done hands-on. It's very difficult to think of care that isn't a hands-on service. Really, the person has to be there, and that means that it also involves relationships – a relationship between the person giving the care and the person receiving it. Again, that's not true of commodities that are things. There can be no relationship at all between the producer and the consumer of a bought thing. Because in care a relationship is involved and very much affects the quality of the care received, that has certain economic characteristics, and in particular, it means it's very difficult to raise the productivity of care.

Limits on raising the productivity of care

If you are a profit-making producer of many types of things, the way you would keep increasing your profits, or compete with other providers, is to try and get your workers to produce more in a given amount of time to increase their productivity. You might do so by buying machinery. You might do so by reorganising their work process. There are all sorts of ways of doing it, but that will be your fundamental aim in order to compete in the market. It's very difficult to do that with care, because the quality of care depends on relationships, and so you really can't do the same amount of caring in less time. There are limits to the extent to which productivity can be improved, and that means that care gets more expensive compared to other goods as time goes on, because if you can keep improving the productivity of other goods, their prices go down, but that of care doesn't. So, care becomes increasingly expensive. This was discovered by an economist named Baumol, who was actually interested in why funding in the arts never seemed to be adequate. Whenever there was municipal funding of arts projects or an art centre, it never seemed to have enough money. The reason was basically the same one as I've just said, that it’s very hard to raise productivity in the arts. So, compared with everything else, it seems to get more expensive. As Baumol noticed, this characteristic is true of every other service in which the human touch matters.

What matters in care

Because it involves relationships, it's the experience of the people involved that really constitutes its quality. People can learn how to care for people well – doesn't mean it can't be taught – but it's very difficult to make quick market-type decisions as to whether this is good quality care, whether it's better to change a carer because you don't think the quality of care being provided is good enough – but you know that continuity of care also matters. The market, which depends on these quick decisions, on full information and being able to leave one provider and choose another if you think they're better, is very cumbersome to work for care. That's why you get both quite a lot of poor quality care and also because it's hard to raise productivity, you get poorly paid care workers. That, of course, isn't very good for the quality either.

Photo by heldar nurkovic.

Gender roles historically

I think historically we had a care system that involved basically a gender division of labour, in that traditionally women would stay at home or near the home doing whatever activities they were doing. Men were the ones who were more likely to go away from their home to work. As a result of that, I think care duties became part and parcel of women's work – and that's still with us. It's still the case that we have gender norms that allocate far, far more care to women than to men. That of a family's care responsibilities tend to be seen primarily as the woman's. While the idea that only men earn an income has certainly changed over recent years, it would still be expected that a family would organise its life around the man's earning capacity rather than the woman's. We've still got the remnants of that division of labour. But over time, various activities moved from the home to being produced in factories: there were a lot of goods – shoes, clothes and various other things – that used to be produced in the home that have moved into commercial production.

Paid care

In recent years, you have had more of a movement of care activities from inside the home to outside. Some childcare centres have been set up; there are care homes and so on. One reason is that there is less to do for women in the home because other activities have moved out. The other is that women can now earn enough money in the paid economy. In order to pay for those services to replace their activity, they had to be able to earn a fair amount, because the difficulty of raising productivity in paid care means those services will always be quite expensive.

Of course, there's a difference in who can afford to pay for those care services. It's tended to be families in which women are better paid that have had the resources to pay for such care services themselves. Therefore, there has also been pressure on the state to subsidise those services so that they are not just the preserve of the rich, so that women who can earn less are not priced out of the possibility of going to work and partaking in the paid economy.

Who are care workers?

Photo by Inside Creative House.

Because it's so hard to raise productivity in care, if you are a private for-profit care provider, if you have to compete with others, or if the government funds your provision but is continually trying to drive down the prices it pays, you have very little opportunity to do anything except either cut the number of employees you employ or pay them less. This is because it's a very labour-intensive industry. So nearly all your costs are wages. The way that this has been coped with is to pay workers as little as possible, and the way to do that is to employ the most vulnerable workers. That used to be married women. Married women were often some of the most vulnerable workers because they could travel a very short distance to go to work. If they found work that fit in with the hours they could be away from their home, then they would take it for low wages. Since then, the most vulnerable workers have changed, and very often in many Western economies, those are immigrant workers.

Distortions in the market

Running care as a private sector industry has led to a lot of imbalances and distortions in the market that we really need to get rid of. The other thing that I would say is that I think we need a revolution in the training of care workers at the moment. Because care providers are so keen to get their care workers at the lowest possible cost, they provide absolutely no training. There's very little regulation of the training that is needed and care is actually an extremely skilled job. Most care providers are banking on the fact that women learn these skills in the home. What we should have is really good training that isn't just on what a care worker can do for somebody who needs care what everybody else can do for themselves, but how they can really enable such people to make the best use of their capabilities – to continue to lead good lives, in which they have some control of what they can do and be.

Discover more about

care in the market

Himmelweit, S. (2007). The prospects for caring: economic theory and policy analysis. Cambridge Journal of Economics, 31(4), 581–599.

Himmelweit, S. (Ed.). (2000). Inside the Household: From Labour to Care. Palgrave Macmillan.

Raising the quality of care: an economic analysis