Before I can start this post, I have a confession to make. I get most of my news from Twitter.
I know, I'm a horrible person, blah, blah, blah. Don't care. I make a point to follow socially conscious people so that I can learn about the big problems in the world. Otherwise, I ignore the politics and human interest stories that dominate the news.
So of course, since I'm getting my news from Twitter, I actually overindex on Buzzfeed articles and crap that's trending including the article where a Texas Man says he cannot afford his stay at home wife because she generates $73,690 in value, and since I'm a spaz it pissed me off.
I must say, it pissed me off for four reasons:
1. The mathematical calculation is incomplete.
2. The method is dumb because the only thing worth considering is opportunity cost.
3. Stupid economic evaluations undermine functional relationships.
4. Attempting to define extra market economic contributions belittles human dignity (ie he forgot sex and the fact that women always do more).
Net or Gross?
Politicians and media talking heads really like to use Gross Domestic Product (and unemployment rates) as a metric to measure the barometer of the economy. They do this because it's easy to understand (incorrectly), and because we would rather pay attention to 155 Doppler Radar Stations that create a robust picture than 155 unique statistics that also create a robust picture of the economic landscape.
Given our hopeless attention to people who have no idea what their talking about, I suppose its understandable that the "Texas Dad" focused exclusively on the Gross Economic Product that his wife created and then said he couldn't afford it. However, he didn't even calculate the cost of keeping her alive as part of his Economic Value to the family calculation.
Wife's Gross Economic Value as a Human Being= Gross Economic Value Generated ($73690)- Economic Value directly consumed (Let's say $10K per year) or $63690.
$64K, not too bad, but I would argue that looking at the "Net Economic Value to the family" is more accurate. Meaning we have to subtract the economic value that she directly consumed. In reality, this amount is probably close to half because half of anything that benefits her child benefits her, but we'll say 1/3 since the wife seems really cool.
So Net Economic value to the Family= $73690- $10K in direct consumption- $27K in consumption of the value she provided.
In this scenario, the wife's net value to her family is actually $36,690. Still, not bad at all, and this "Texas Man" still can't afford his wife after paying his taxes (I think his earnings were somewhere around $40K). Too bad, Texas Man- I hope your wife sticks with you.
In which I refuse to entertain useless Frameworks
All of this Net/Gross Talk is important, but in my opinion it's not terminal.
This Texas man and his wife were presented with an option: Wife can stay home and generate $64K or $37K in economic value, or not. The "or not" is what really matters.
What else could Texas Man's wife do? Perhaps generate monetary value from home (flip houses, run daycare, etc.), she could produce less value (we can eat out more, or hire out the laundry). She could work from an office, or work nights. She could build sculptures in the parks, or travel to India. I'm not going to prescribe what she should do, after all the world is her oyster too.
If this were a purely economic argument, then Texas Man and his wife would need to evaluate whether or not they "come out ahead" with a stay at home wife or not. Texas Man clearly thinks that he does. Unfortunately, his wife is a little lonely at home, so she's not quite as enthusiastic, but she sees the value she creates at home as more important than the value she creates in the workplace.
Great, so this decision is more valuable than that decision! It has nothing to do with $73K or $37K or whatever. It has to do with the fact that earning $37K in real money (or whatever her former salary was) is not as valuable as the value she creates at home. Even if she only generated $12K in measureable value, they could value the opportunity so highly that it is still worth it.
How much am I worth to you?
Here's the thing, measuring economic value might be a fun thing if your thinking about life insurance, but it's a less practical exercise than you might think.
One of my favorite books (lately) is called "The Journal of Best Practices" which is a memoir of a man with Asperger's who is trying to be a better husband. My big takeaway from the book is what you measure matters. By this I mean, if you define your relationship success criteria using a given metric then you will work towards improving that metric.
I think the absolute worst metric that we can use to define relationship success is how "equally" we are contributing to the economic vitality of our household. Let's take a marriage where there are no kids. Husband earns $90K per year and wife earns $60K. Therefore Husband is 1.5 times better at the relationship than wife. Say what!?!
Should Texas man's wife be pissed that she generates more value than he does? What if his business suddenly takes off, should he upgrade to a wife who generates more value? Gosh, these are all really important things to consider... or not.
Functional marriages require that you work as a team. I love the podcast called Better Conversations on Money and Marriage, because these two realize that money is an important topic in a relationship, but it doesn't define the relationship.
In our Agile Personal Finance Manifesto, my husband and I say that we value shared life vision over freedom from working. We value the ability to course correct, and to show love to one another and our son more than we value dollars to invest or to consume. If you meet somewhere in the middle in terms of economic contribution, that's fine, but it's just a stupid metric. Choose a better one, like how frequently you're having sex, or how often you have a sincere conversation, or how much time you spend together doing something you love.
The human dignity component
As much as our current society defines us as how much we earn, or the economic value we provide, this is completely outside of what gives us value as human beings.
The literal free flow of "gifts" from one person to another defines human flourishing. I give gifts to my husband that I would never give or sell to anyone else. I show love to my friends that I couldn't possibly show to a stranger.
The fact that I will always do more housework than my husband is no concern to me even though I earn much more money than he does too.
If he's going to define housework that was freely given as having $5K in economic value, what about the sex that was freely given? What about the son who is freely shared? What about the economic value of evening walks and laughter and crying around the dinner table?
If Texas Man and his wife have a strong relationship (they do), it's because they freely bless each other with "extra-market" affirmations of dignity and love. Things that economists can't measure even if they tried.
I'm a wife, a mom, an employee, and a personal finance nerd who is devoted to spreadsheeting my way through life.