Asymmetrical Information

So, Megan, what do you think the balance between household and market production is in Japan?

Cheap labor is not the royal road to economic growth and quality of life improvement. Automation is.

To quote John Stossel's column today: "'Live and let live' used to be a noble approach to life. Now you're considered compassionate if you demand that government impose your preferences on others."

Either is handicapped by high progressive taxation of incomes in order to force the second earner out of the market.

Just because the second earner was traditionally the woman does not mean it must always be so.

I had a flight student who quit his job to be a stay-at-home-dad. He put his wife through med school, and after she got a good job he found that his income was going mostly to the tax man.

So he quit.

There's an example of a second-earner responding rationally to market signals.

Given that women make up the majority of college graduates, if women ever get around to majoring in economically viable fields, the majority of second earners may become men.

You're a secondary earner? So whose the primary earner?

/

I'd agree with Dog of Justice. You don't need a permanent under class in order to pull this off. Demand for cheap labor boils down to this, and I find that appalling.

Jane

Now fess up. Did you check the legality of her papers?

Were you employing an illegal immigrant?

Inquiring minds want to know.

and Mr. Wizard [may he rest in Peace] waves a magic wand, and we are back in the 50's...

I'd do a massive eyeroll, but sometimes they stick that way. ouch.

It's amazing how often people are given a choice by circumstance and choose the harder road, because it ultimately gets them where they want to go. This life may be about market econ. on the macro scale, but at the individual level, people make choices. Why are we sure that moving this around economically will give the desired outcome? Unpalletable? Sometimes things taste bad because they are poisonous, and this sort of thing would certainly be. Seems it would drive the working poor into abject poverty for one. Even when women widely stayed at home, America in general worked hard... and before that we were farmers... and worked hard.

Ultimately it is better to bring everyone up, than to selectively push people down... IMHO of course...

D

Note the original cite ignores the obvious question.

What about Sweden? Land of high marginal taxation. And plenty of immigrants.

Swedish professional women work almost as much as American women. Sweden has lots of immigration. Sweden has lots of domestic servants.

The trick in Sweden, of course, is that they make it relatively easy for a woman with children to keep working: daycare is provided by the state, and so is school after care. Schools provide cooked meals as well (Swedes think it important that children should receive good nutrition and exercise, and so make that part of the school curriculum).

In Sweden, we have eye-watering marginal tax rates, yet almost no "second earner," whether male or female, stays home. Reihan Salam overlooks the fact that well-meaning egalitarians will quickly act to "correct" any socially conservative side effects of existing policies. They will simply intervene again; it's what they do.

The Swedish left cannot, for ideological reasons, abide either homemakers or maids. So incentives have been adjusted to counteract the effects of progressive taxation: couples cannot file taxes jointly, and household services have been made unaffordable (although a deduction was introduced a month ago) due to payroll fees. The general loss of prosperity due to lower economic growth also really seems to help.

At the risk of treading into somewhat dangerous territory, I'm slightly surprised that a maid service in DC would hire non-English-speaking immigrant labor.

In response to Valuethinker, who coincidentally posted about Sweden just before I did: what on earth do you mean, "Sweden has lots of domestic servants"? Have you ever been here? Domestic servants are almost unheard of; this is a country in which everyone is expected to clean his own place. There's a very strong ideological aversion (which largely transcends politics) here to anything that smacks of one class putting itself above another.

Valuethinker, it's a cleaning service; I'm not employing them directly, so no, I didn't check their papers. I don't go into the backs of the restaurants I frequent to check the workers' documentation either.

Jane, I think you took the proposal much too personally. We all love you and don't want you to spend your time mopping instead of writing. We got your back.

The proposal is distasteful for many reasons. I'll just add that one of the other unintended side-effects would be an increase in divorces (and a decrease in marriages). These would only be technical divorce, as couples would probably mostly continue to cohabitate. But many modern two-income families would do the math and decide that they needed to take their personal commitment off of the government's books.

Have there been any studies of how effective changes in tax rates in changing behavior? I find that I do the same thing (buy health insurance, pay for my son's college) regardless of the supposed incentives. I would suggest enforcing the existing employer sanctions and repealing the subsidies on corn.

How devious is Amazon, anyways? I noticed their ad has two albums by Mink/Willy DeVille posted. I just bought a different Willy Deville album from them. I assume Willy DeVille is not that broadly popular. Are the rest of you seeing a different ad?

Bad writing; my first sentence would have been better thus: Have there been any studies of how effective tax rate changes are in changing behavior?

Why not abolish child labor laws & compulsory education, and let *teenagers* mop floors & clean toilets & hang sheetrock?

It would be a heck of a lot better for them in the long run than sitting in useless schools for 4 to 8 years learning how to be politically correct lazy bums.

So, Megan - part of the problem, or part of the solution? From historical posts, you seem to support unfettered immigration, or at least to let those who are here illegally stay here.

Perhaps I misread. Or, perhaps people who don't tell the people they hire to do their work, yet don't do the socially responsible thing, and tell the employers of people who have a high proportion of illegals in it, that you want only legal workers to be doing your work, are, in fact, the problem.

Not that having someone do the cleaning makes a person less or more 'of a woman.' Fer shur people who live alone are the primary income earners for that 'family.' Don't get too hung up on the fact that he mentioned women, for, as asian man expostulated.

I like what you write, and we don't have to agree for me to enjoy it.

Are you a second earner? I was under the impression you were living alone in a tiny apartment?

Why does it make any more sense to outsource your house cleaning to your wife (sorry, former second earner) than to an immigrant or anyone else?

If trade is bad then each spouse ought to work 20 hours a week each wash and iron their own clothes, each cook their own meals and do their own grocery shopping and each mow half the lawn etc.

In fact, people who don't beleive in trade ought to stop trading sexual services with their spouses and just take care of themselves.

Is the post satirical a la Swift's A Modest Proposal? Seems to me it is but perhaps the guy is serious?

secret asian man,

the male homo economicus might stay home but actual flesh and blood men rarely assume the homemaker position. there are a few reasons for this:

1) women get much lower returns to education than men, mostly because of interrupted labor force participation and occupational choice.

2) women class-up in marriage. the likely consequence of the college gap is therefore more single educated women and uneducated men, not marriages between these two groups.

3) many men do /less/ housework when their wives out-earn them. the theory is that men find it emasculating to earn less than their wives and they assert their masculinity by refusing to do the dishes.

all three of these are well established empirical trends, anecdotes to the contrary notwithstanding.

The proposal is distasteful for many reasons. I'll just add that one of the other unintended side-effects would be an increase in divorces (and a decrease in marriages). These would only be technical divorce, as couples would probably mostly continue to cohabitate. But many modern two-income families would do the math and decide that they needed to take their personal commitment off of the government's books.

Yep. We barely bothered to buy the marriage license as it is...

They'd be tuna croquettes, not shrimp. You couldn't afford to buy shrimp in that event.

Jane,

Unlike you, I have very little compassion for anyone. That being said, please search Craigslist for your next maid. The markup that Merry Maids charges is (figuratively) criminal, and you'll do far better if you employ a maid directly.

The idea that MM exploits its employees all sounds a bit leftish and nonsensical, I know, but you're paying a truly pointless markup, and you're needlessly paying a transaction cost.

There isn't much fuss about legal immigaration. As for illegal immigration, why re-engineer the tax code to possibly achieve marginal results when there are obvious measures available that require no new laws, programs, forms, etc. - and are narrowly targeted to the actual problem? To wit:

1. Compare social security records with employer payroll tax returns (which identify employees by name and social security number).
2. Send ICE agents to businesses with dubiously-legal employees to enforce the immigration law - versus employers and employees.
3. Have ICE agents screen new prisoners when they enter state and locak lock-ups. Take deportables into immediate federal custody.
4. Have ICE agents screen new patients, students, etc. entering publicly-funded hospitals, schools, etc. Take deportables into immediate federal custody.

In no time at all, Megan's cleaning service will have to develop a new business model or go out of business.

In the words of one commentator, this can be called "attrition by enforcement."

Ken

I think Reihan Salam's argument can be summed up as:

If everyone is a lot poorer, then they will be less able to pay illegal immigrants' wages

This may be true, but it strikes me as a case of the cure being worse than the disease. He does talk about gains from increases in leisure, but frankly I find those arguments a dangerous infringement on liberty.

I'm afraid I don't understand the fuss: as Ken explains the solution is fairly obvious... really the question should be, why is this not happening?

Bob Dobalina:

Merry Maids or other cleaning services perform several important functions:

1) Find and train employees - the turnover in this field is in excess of 100% per year.
2) Insure and bond said employees. Try collecting anything if said cleaner damages something.
3) Make sure that their employees are legal.
4) Provide all the equipment that the cleaners require.

People use cleaning services such as Merry Maids, Molly Maids etc. because finding trustworthy cleaners is not easy. If you live in a fast growing area or one with a lot of population turnover such as the DC area it is hard to get referrals from friends.

Salam ignores the fact that the current tax code already does this (that is, force college-educated married women out of the labor force). Upon getting married, I will take an immediate $1500 hit annually (can't take the standard deduction if your spouse itemizes), and then of course my marginal tax rate will increase much more rapidly in subsequent years. The penalty is so substantial that we have given some thought to having a marriage ceremony but not actually getting legally married.

Neither the fact that you are a woman, nor the fact that you identify as upper middle class, makes this target you.

You are not a second earner. To be one, you have to be an earner who lives in a household with another earner whose earnings take priority over yours for some reason. Your sex and your class are irrelevant.

If you don't like to think of yourself as ever becoming the target for such things, you are perfectly free to avoid it by (a) continuing to live alone, or (b) choosing as potential household partners only those earners whose earnings are unlikely to take priority over yours.

Whether this is the best route to your happiness is of course another matter. (I'm not the target either, but that's only because I'm not an earner at all.)

Actually, on thinking about it, Reihan Salam can't really argue that there will be gains from leisure.

His whole argument is that people need to produce more at home, which means that much of the additional non-paid-work time will be spent cooking, cleaning the house, mowing lawns, etc. Not on leisure activities but on household production.

So no gains to leisure.

(And he thinks that this will stop "keeping up with the Joneses?" That phrase was introduced with the ideal was mum staying at home with the kids. And does he really believe people can't be competitive about the state of their gardens, or their cooking, or their curtain-making?