Balance sheet and women in households – all “Implicit” ?

Innumerable times  a day we dreadfully shout at each other ‘oh no…the  cost of living is so much…how to manage…impossible….you are the only culprit… etc, etc, etc’; the blame game goes on, right? But have we ever paid attention to exactly what ‘cost’ are we referring ? Do we know what exactly are the factors we talk about?

Perhaps YES, perhaps NO.

YES – because we know cost (price – to us) of rice, roti, milk, fish or cost of petrol, diesel, cooking gas are showing rising trend.

YES – because we know our children’s cost of education is jumping up day by day.

YES – because we know clinics and hospitals are becoming expensive; off course the cost of treatment is rising.

And,

NO – because we never consider the cost of those efforts which are keeping us fit to fight our daily battles.

NO – because we never recognise the cost incurred to those ‘behind the camera’ persons who never ask for payments.

NO – because we have been taught from the very beginning that only achievements are subject to recognition and payment, sacrifices are not. Those are taken for granted.

Unknowingly or deliberately – we completely ignore the fact that these costs do exist and without them we are actually handicapped.

Here comes today’s thought.

 Let me present a court order  excerpts that instigated me to write this piece.

“In generality of marriages, the wife bears and rears children and minds the home. She thereby frees her husband for his economic activities. Since it is her performance of her function which enables the husband to perform his, she is in justice, entitled to share in its fruits,” the judge observed.

The Madras High Court has ruled that homemakers are entitled to an equal share in the property bought by their husband. The decision was made over a property dispute involving a couple, where the man claimed single ownership as he bought that property. The judge pointed out that the wife played the vital role in managing the household, looking after the children, cooking, cleaning, and managing day-to-day family issues and ruled that she is entitled to equal share in the property and said the many roles played by her cannot be less equated with the 8-hour job of the husband.

Justice Krishnan Ramasamy who gave the order recently, observed that
“And moreover, she sacrificed her dreams and spent her entire life towards the family and children. Therefore, by performing multitasking skills, a wife makes the home as a comfortable environment, and certainly it is not a valueless job, but it is a job doing for 24 hours without holidays. The proper presumption is that the beneficial interest belongs to them jointly. The property may be purchased either in the name of husband or wife alone, but nevertheless, it is purchased with the monies saved by their joint efforts” the judge said.

What inspires me here is not only the great legal connotations of the significant, sensible and sensitive court order, but also the underlying concept of cost of a very crucial service which we seldom take into account.  This cost is attributable to the enormous service provided by women in household works. This cost is not measurable numerically in money terms as no price has been attached to the service that they render for 24 * 7.

I feel that Hon’ble Judge of  Madras High Court has rightly indicated to this flawed system of  not attaching value to the services which are actually indispensable for the society through this historical order. He offered great justice in pointing out that all costs which are not explicit in a so called balance sheet cannot be just ignored and left unpaid.

In fact one of the drawbacks of national income accounting  methods is that these measures cannot take the homemakers’ contribution into account. If it were possible then India’s GDP could have increased by quite a few times.

Before I mess up with various issues, let me jot down the areas I want to explore.

First, why are some costs not explicitly shown?

Second, which items show this non-explicit feature?

Third, what is the approximate amount of these costs if we could assign money value to them?

Finally, what can be done to improve the system?

• The answer to the question that why are some costs never exposed even if they actually give rise to substantial increase in income lies in the basic fact that market fails to tag any value or price to these services. Also, when we talk about the services rendered by women in households, the moment we acknowledge them, they will be subject to payment or repayment as they practically generate asset for the family. So it is beneficial for the earning members to keep it implicit forever.

• Now the cost items showing the non-explicit feature can be described like:

Mother teaches her kids – she is contributing to human capital formation of the country.

She cooks healthy meal for the entire family – thereby is a part of making a healthy generation – an important indicator of human development.

She manages the finance of the household – definitely is adding to the aggregate savings of the country which is later mobilized into investment, which means new capital formation for the country.

These are very few of the services that she offers 24*7.

Still, SHE IS NOT a part of the balance sheet of the family income  in micro sense and not a part of the items included in national income in a macro sense.

Had she not sacrificed her career so that her children grow up as good citizens?

Do we have day care centres or creche of a minimum tolerable standard?

Let alone the help and assistance her husband and other family members receive from her.

We do not acknowledge  such vital roles in money terms.

• The next inevitable question is approximately what would be the money value of these costs?

For today’s discussion, I quote the list of services from the order given by the Hon’ble Judge of Madras hight court  and assign the average minimum value to them in monetary terms as per market prices in any metro city in India.

‘The homemaker performs many tasks– a Manager, Chef, “Home Doctor” and also “Home Economist” with financial skills.’

Jobs performed by Indian Homemakers	Minimum Remuneration per month as per approximate market prices
managing the household chores	8000 INR
looking after the children,	12000 INR
cooking	8000 INR
cleaning	6000 INR
Managing finance	8000 INR
sacrificing dreams	Depends on individual opportunity cost, say 10000 INR (should have been ten times)
frees her husband for his economic activities	Depends on individual opportunity cost, 8000 INR
Total	60000 INR

Now just think  how much she sacrifices every year.

It is,  60,000*12 = 7,20,000 INR

Calculate the simple savings account  interest rate on it and imagine the monetary loss she incurs every year. Let alone  the foregone  investment prospects out of this income. And we console them with the faulty notion of mental satisfaction. Funny!

Moreover, this is not the opportunity cost , as we just don’t know what next best alternative could she grab, given the opportunity, given the environment where she could exercise her choice.

• Last but not the least, what can be done to improve the system, or if at all anything can be done.

No emotional or sentimental issues I want to attach here, I want to present a simple question:  if price cannot be attached directly to these services, why don’t we think of other ways to compensate? Don’t we pay toll taxes? Don’t we pay taxes via several channels? Do we at all know what portion of the tax is allocated to which national activity?  We pay because we take road service, we pay because we government takes care of us.  Then why can’t we think of a system where share of family income goes to the women legally for her services? If we could,  the Madras Court need not deliver the order of equal share of the property bought by the husband to the wife.

Even if we think of allocating some share to the mother or wife, it comes with a pinch of mercy, control and power embedded in the patriarchal system. It should be allocated with respect and honour as she rightly deserves this and obviously earns this.

All her services generated only Imputed/Implicit Cost which refers to the cost that is not actually paid for externally but is implicit and relevant for decision-making for the family. It represents the value of resources used in a particular activity that could have been used in an alternative activity. If we try to think  how much our homemakers could utilise  their skills  in alternative opportunities, then it would have been easy to apprehend how much has she sacrificed.

I conclude by  presenting the idea of balance sheet with a little bit of Commerce and Economics. It will have literal as well as metaphoric implications and connotations.

Balance sheet shows, broadly, (1) list of  things that a business owns which it need not repay and (2) list of things the business has but needs to repay in future. It is not difficult to understand why (1) is asset, and (2) is liability. The reason is same as when our salary enters into bank account we have a smile of satisfaction as it is an asset but when a loan enters there, our Electrocardiogram shows tachycardia or very fast heart rates, producing a ‘camel hump’ appearance, because it is a liability.

The homemakers’ service must enter into the balance sheet of life as asset only. Technically, it could be a liability  in the financial balance sheet if repaid later on. But the most important thing is it should not be invisible; neither in our mind nor in the financial statements. It deserves acknowledgement as it earns compensation. Reimbursement is an absolute necessity.

Emotion cannot surpass factual representation; at least for this issue. Don’t say mothers are extremely happy only to see that their children are growing up or wives are super satisfied only by watching their ambitious husbands  dancing at the peak of success at the cost of her service. They are not. Sorry.

In the coming weekend think over your finances once more.

Cheers!