Iâve been musing lately about the connection between womenâs labour force participation and income inequality and Iâve been forced to the conclusion that, once again, itâs probably womenâs fault. Increasing inequality in market incomes, that is.
My logic goes something like this. Once upon a time, most households in Australia had one income earner (Dad). The proportions that had no earners or more than one were relatively small. The level of household income inequality therefore was driven largely by the distribution of menâs wages.
Since then things have changed. There are now many more jobless households (one of the few international rankings where Australia is near the top) and a growing number of households with two or more earners, including quite a few where there are two fullâtime incomes.
So basically we have much greater diversity between households in the number of market incomes coming in, on top of the diversity in earnings. And the thing that has been driving that diversity most is, on the one hand, the increase in the number of jobless (mainly single parent) families and, on the other hand, the increase in womenâs employment, particularly among married women and mothers. Whichever way you look at it, women are largely to blame.
Now, many people of leftish persuasion would simply accept that increasing market income inequality is bad, without question. But it this is so, what is the policy solution? Should we go back to the male breadwinner norm as some would like? Surely not.
Or should we be trying to get more women working full-time or encouraging mothers who work full-time to work less in the interests of greater income equality? My guess would be that many, if not all, of the countries that have greater equality of market incomes are those in which female labour force participation is higher than in Australia and full-time work is the norm. But do we as Australians really want to go down this route?
Even the issue of whether or not single parents should have the choice not to work is not straightforward – most people accept that this choice should be available, at least in some circumstances, and many on the left argue quite vociferously that it should be an absolute right. But if large numbers of people choose not to work, market income inequality must surely go up.
The real issue for me is this â if a large part of the increase in household income inequality is being driven by the choices that people freely make about the extent to which they want to engage in paid work, how can this be a bad thing? It seems to me to be totally inconsistent to argue in favour of greater choice but to be concerned when choice results is greater inequality.
This isnât to say that we don’t need, or shouldnât have, policies to help people overcome inherited disadvantage and realise their potential, earning and otherwise. After all, I always thought that was one of the primary goals of feminism. But if one of the prices we have to pay as a society for women going out and making a life for themselves is greater household income inequality, I for one am happy to pay it.
(You will have noticed that I am not citing lots of statistics here, mainly because I havenât had time to go and seek them out. Perhaps someone out there can enlighten me as to whether there has been any research on this issue or is any clear evidence in favour of my proposition. If not, I would have thought it is something that would bear looking into.)