Who is poor?

I think the time-poor are the real poor.

I have been a student of development economics for about a decade now. In these ten short years, I have come to realise that poverty goes beyond being deprived of income and basic necessities of life. Deprivation to me is merely a consequence of a state of real poverty, that is, time poverty. People who are time-poor ultimately have minimal resources with which to create a decent quality of life for themselves and those they love. They tend to have limited time to allocate to activities that could enhance their human capital, social capital, financial capital and ability to contribute to global community development.

 

The reality of poverty can be seen in the way people utilize their daily time resource. Even though every activity is important to the progress of every economic unit in the macro economy, some activities yield more market value than other activities. In any case, economic agents and labour market participants get to decide what proportion of their limited time resource will be allocated to low-productivity activities and what time proportion will be allocated to high-productivity activities. Many time-poor people in developing countries are stuck with a burden of low-productivity activities throughout their conscious hours. These activities tend to draw more on their physical strength, energy and resilience than their intellectual capacities. A common measure of economic productivity of an activity is the average return produced per unit of resource investment in the activity.

 

Similar to the ‘tabula rasa’ analogy of a clean slate of the human mind at birth, through a progression of human activity, individuals start out in their productive life by allocating most of their conscious hours to low productivity activities. However, with increases in knowledge, skills and experience through personal choices and investments, they could increase their capacity to deliver on medium- to high-productivity work over their lifecycle. This implies that workers can only move up the income continuum if they choose to transform their capacity to produce outcomes that command higher economic value.  A measure of economic progress over a lifetime should be movements along the continuum of value-adding activities.

 

However, it is pertinent to note that high-productivity is not only a function of economic value-added. There are some activities which may not command present market value but tend to hold high future returns for all units of the global economy – households, firms and governments. Parent’s (especially mothers’) care work in households has for a long time being erroneously classified as a low-productivity activity - since it yields no economic value and is not included in a country’s calculation of gross domestic product.  Households’ successful production of well-adjusted individuals, through its hidden curriculum, informal learning and values training, are a worthy investment into a sustainable future for any economy; contributing to the stock of human capital and productive capital.

 

Many female employees of labour who are mothers of young children tend to be time-poor and may need to outsource care and other household activities in order to fulfil the terms of their employment contract. Those without income resources to outsource part of their care and household production activities may exit the formal labour market for a season in their productive lifecycle. Others who remain in the formal labour market may experience delays in career advancement due to limited time available for investment in capacity building. In many cases, there tends to be a trade-off; either to have a thriving career in the formal labour market and emotionally-deprived children or to exit a thriving career in the labour market in order to raise emotionally stable and well-adjusted children. On the other hand, mothers who are business owners, have flexible work demands and employ others may have ample time to invest in their human capital, social capital and other forms of capital over a lifecycle.

 

Therefore, as economic thought advances, we need to work out how to measure the long-term productivity of households and household production. We measure firm productivity using various key performance indicators, such as sustained profit, maximization of shareholder’s value and sales maximization. We measure the productivity of the government by the social welfare returns to the citizenry. The productivity of the macro economy is generally measured by the pace and pattern of growth in gross domestic product, GDP. How do we measure the long term productivity of households and household production? Research and policy needs to set a spotlight on households in developing countries.

 

For instance, the measure of a highly productive household should not only be in the amount of income it earns, but in the quality of human capital it is able to contribute to the macro economy through all household production activities. Drawing on Martin Luther King Jr’s classic ‘I have a dream’ speech, we should no longer be measuring humans and households by the colour of their skin, race, pedigree or size of their income. Humans should be assessed by the content of their character, as engineered, amongst other things, by concerted household production and informal learning.

 

What do you think?

Please feel free to share your thoughts in the comments section below. Thank you!