Why Germans Should Stop Mowing Their Own Lawn

Yves here. Im featuring this post in part as a development exercise to Cliff, a German economist who has been blogging off and on since 2011 and plans to post on a more consistent basis. He has been warned that the NC readership can be rough.

Im also of two minds about his argument. Initially I recoiled, because I think the personal service economy in the US has gone too far in some respects. To put it more precisely, the stratification of income has led to growth of the personal service economy, which serves to reinforce class distinctions. And Cliff takes up the fallacy that activities that are included in GDP are somehow better than if they occur outside the transaction economy. Vam Gogh sold only one painting over his entire life. Does that mean his output was worthless? Oh I guess it wasnt only because now auction houses make ginormous amounts from his work. But per this logic, paintings that are traded often are more valuable than ones that are displayed in museums or are owned by collectors for a long time.

Married women with kids who work in professional jobs (unless theyve managed to get a work at home gig, and I know all of one person who had that work well) are typically dependent on personal service workers, as in they need nannies (or at least some sort of part-time child care arrangement even if the kids are in school) and house cleaning. The big reason is the hours arent predictable and they often have husbands who have similar long work days. But that sort of efficiency leads to greater instability. I dont know how many times my friends have come unglued when something happens to their nanny (illness, death of parent, or they turn out to be bad news and need to be fired). Its really hard for them to manage while they are finding a replacement and difficult to find good caregivers.

And youve got the second-order problem identified by Elizabeth Warren in the Two Income Trap: having wives work means you dont have a reserve worker in case something happens to the (presumably higher income primary worker) spouses job. And two income households have higher fixed expenses (the biggie is two cars, although that would probably not be the case in Germany, where public transportation is good in big cities) but they also per above need to spend more on services, thus making it harder to save).

But the flip side is that there is rampant unemployment throughout Europe, with emigration from periphery Europe to the north in search of jobs. It would be vastly better if the surplus countries abandoned their demands for austerity. Economists have argued as a next-best that northern countries will start putting more operations in the South as their wage levels fall. But that wont provide relief any time soon. So perversely, more use by Germans of personal service workers would take up some labor slack at a time when jobs are in desperately short supply. But that seems a poor fallback to failed policies.

By Cliff, a German economist specializing in financial and macroeconomic policy analysis. Originally published at Cliffeconomics

Mowing the lawn appears to be a common pastime for Germans. Washing the car or ironing even makes it into a listing of ways to burn calories in a recent issue of the news magazine Focus. Does this make sense, economically?

Home production, i.e. productive non-market activities, are not captured in the national accounts. Time use surveys, such as the one carried out in Germany in 2001/02, show that adult Germans spend 25 hours per week on unpaid work, more than paid work on average.

Macroeconomic indicators may be reminiscent of the extent of home production in Germany. Labor participation, particularly among women, is low, possibly on the account of home keepers and stay-home mothers. Work hours have traditionally been lower, providing at least more opportunity to engage in home production also for those in jobs. These indicators distinguish Germany in particular from the US, where consumers are perceived to rather pay than doing stuff themselves. (For disclosure, Cliff uses dry cleaners, car washing, but doesnt have a lawn to mow.)

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Why Germans Should Stop Mowing Their Own Lawn