Making an Addition to Doughnut Economics

During our second, and final unit, of Econ: Risking Value we explored sustainability and it connects to the economy, as well as, how one affects the other. We got to talk with Rock from Plant Chicago about circular economics. They used their location as a store front for local business that didn't have a physical space, as well as hosting local farmers market. In this unit we especially focused on Kate Raworth's economic theory called 'The Doughnut Model.' The model showcases how we should distribute our resources so that we are no overshooting or undershooting them and that everyone is getting the basic things they need in order to survive. Raworth explains in her book Doughnut Economics about how to think like a 21st century economist. For our Action Project we had to contribute our own ideas as to how to be a 21st century economist by writing chapter 8 for the book, based on a competition Raworth held a couple years ago. For my idea, I indulged in the idea of expanding childcare and having the federal government help parents be able to afford it through paid maternity/paternity leave to continue sustaining and pushing the economy forward rather than stagnating it. Here is "Advocate in the Future!," chapter 8 of 'Doughnut Economics':

Chapter 8: Advocate for the Future

As a society, we are currently disinvested in our future. By the future, I mean children. They are our future workforce, caregivers, and what have you. We expect them to succeed, and in order to be successful a quality education is a good base. Nowadays, we see more and more people opting to not have children and we wonder why this is, when the answer is right in front of us. Outside of personal choice, people are opting to not have children due to the lack of access to childcare. It is causing a population decrease as well as an economic conundrum. More of the older generations are leaving the workforce faster than we can replace them. As Americans, we need protections such as extending paid maternity/paternity leave and a federal $15 minimum wage. These are how we can sustain the average worker and encourage them to have children, if they want to. 

European countries that arguably are just as successful economically have already figured it out. For example, in Estonia, they offer 140 days of fully paid leave, paid for by social security. So why can’t we see the issue in front of us? Truth is we do, but there are currently politicians that have been in office so long that they are no longer in touch with the average American. It’s time we start campaigning for these benefits, and if not, vote for new legislatures. The United Nations’s Sustainable Development goals state that in order to create a healthy future, one thing we need to do is create a society with decent work and economic growth (SDG 8). We need to stop looking at things such as the GDP for growth and start measuring growth by if everyone is getting what they need in order to survive.

Chapter Commentary (Quotes, Context, Data)

Chapter 8 of Doughnut Economics, “Advocate for the Future!,” points out the inconsistencies in how economic growth is viewed. The argument is that if we are so focused on economic growth then why are we not investing more in training our future workforce. We are underinvesting in children due to the cost of childcare having increased at over twice the rate of inflation. This is all while the wages have stayed the same, so of course people will opt to not have children because they cannot afford it. A 2015 analysis from the Economic Policy Institute found that families pay between $300 and $1500 a month for childcare, which has been severely altered due to the pandemic. As pointed out in the chapter, the expenses of having a child has grown exponentially since the beginning of the Covid-19 pandemic alone, by approximately 41% according to the Center for American Progress and Child Care Aware of America. 

In her TEDx “Why it is time for Doughnut Economics,” Kate Raworth states, “Second, anybody who gets kids up in the morning and off to school knows that not all work is paid. The unpaid caring work of parents raising kids, the next generation of workers, is at the heart of family life, but it’s almost completely ignored by mainstream economics. And this woman has a bucket on her head, because across Sub Saharan Africa and South Asia women carry their body weight in water, in fuel, in firewood, with a child on their backs, all for no pay. And if you ignore that, you're ignoring the work of millions of the world's women, which keeps their families alive everyday.” 

There has been a growing comfort for doing labor with little to no payment for it. Being a parent costs money. There are costs for school, necessities such as diapers, clothing formula, etc, and medical costs. Not to mention parents need time to bond with their children especially as newborns. 

Betsey Stevenson, former economic advisor to President Barack Obama, argues that, “What we have done is create a nation of kids who are underinvested in, and that feeds into not just what our potential is as an economy, but it also feeds into inequality. The "fundamental flaw" in childcare today,”she added, “is that children aren't getting access to investments in early childhood education that they need due to the surging costs of childcare.” A quality education is a fundamental part of setting a child up with a base for success; putting them on a path that the can choose what to do with. 

Another argument made is how, in America and across the world, having paid maternity/paternity leave would greatly benefit families because after giving birth the body needs time to recover from the strain of it. There should be emotional support of the partner. In America we have maternity/paternity leave for up to 12 weeks; however, that is unpaid leave. No one can sustain themselves and a child on 12 weeks of unpaid leave. Therefore, in order to succeed, we must invest in the future.

Growth graph by KE, 2021

Seen above is a graph that roughly displays the growth of childcare since the beginning of the pandemic to now. The average cost of childcare in 2020 was $775 a month, already that’s a pretty hefty penny. Now towards the end of the pandemic the average has risen to $1,230 a month. This graph is based on a report given by LendingTree in the article from Parents.com, ‘Child Care Costs Have Risen More Than 40 Percent During the Pandemic, Report Finds,’ from January 2021. The article states that childcare has risen 41% in the year since the start of the pandemic. 

Overall, I enjoyed reading Kate Raworth's "Doughnut Economics" and her viewpoints on how modern economists need to rethink their methodology instead of sticking to a traditional way of doing things. I agree with Raworth and her dislike towards the GDP because there are those who believe it is the only thing that can demonstrate economic growth, when there are many other ways to measure that. 

Resources:

Biekert, Mary. “Over 100 Economists Urge U.S. Congress to Invest in Child Care.” Bloomberg.com, Bloomberg, 15 Sept. 2021, https://www.bloomberg.com/news/articles/2021-09-15/over-100-economists-urge-congress-to-invest-in-child-care-for-economic-growth.  

Gould, Elise, and Tanyell Cooke. “High Quality Child Care Is out of Reach for Working Families.” Economic Policy Institute, 6 Oct. 2015, https://www.epi.org/publication/child-care-affordability/. 

Halkidis , Anna. “Child Care Costs Have Risen More than 40 Percent during the Pandemic, Report Finds.” Parents, Parents.com, 15 Jan. 2021, https://www.parents.com/news/child-care-costs-have-risen-more-than-40-percent-during-the-pandemic-report-finds/. 

Raworth, Kate. “Why It's Time for 'Doughnut Economics'.” TedX. Why it's time for 'Doughnut Economics' | Kate Raworth | TEDxAthens, 3 Nov. 2021, Athens, Greece, https://www.youtube.com/watch?v=1BHOflzxPjI. Accessed 3 Nov. 2021. 

Zeballos-Roig, Joseph. “Over 100 Economists Urge Democrats to Include Affordable Childcare in Their $3.5 Trillion Spending Plan.” Business Insider, Business Insider, 14 Sept. 2021, https://www.businessinsider.com/economists-urge-democrats-affordable-childcare-social-spending-plan-reconciliation-infrastructure-2021-9