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If Women Working Causes Inflation Then Women Must Be Less Productive Workers Than Men



Over at Politico there is the assertion that one reason for past inflation was that women joined the workforce. If there are more people earning then of course prices will rise. Don Boudreaux takes this on:

Victoria Guida offers the following as a reason for the 1970s’ high inflation rates: “double-income households as women entered the workforce in droves” (“Why big-spending Biden can shrug off GOP warnings of inflation,” April 12).

She’s mistaken. Inflation is not caused by an expansion of the workforce. Yes, the money that women earn is spent, and this additional spending would indeed push prices up if the amount of goods and services available for sale were to remain unchanged. But women entering the workforce earn for their households additional money to spend precisely by producing and making additional goods and services available for sale.

Which is a good answer, but it’s not a whole and complete one.

It is still possible that double income households did produce inflation. Or that the shift to their existence produced a bolus of inflation. The condition would be that the new female workers were not as productive as the male workers.

If this is true, or were true, then the higher incomes would not be met by the higher production to absorb them. But it is conditional upon female workers being less productive than male. And who, in these days of strong and independent women who wholly deserve exactly equal pay, would want to put that conjecture forward?

Well, those who insist that the rise in double income households led to the 1970s inflation at which point we get to call them out as patriarchal haters of course.

A more precise version of this assertion is that the rise of double income households increased house prices. It makes surface sense, the price a household is willing to pay for housing is a function of the income of the household. We can also assume, easily enough, that the labour of women is less productive in the provision of housing than the labour of men.

So, it could be true there. Except I have to admit than I’m deeply unconvinced. For two reasons. One is that the rise in the price of American housing is much more to do – as in the UK with planning permission – with zoning and such issues in the coastal cities than it is with a rise in the price of housing per se. And I’m entirely willing to agree that where supply is artificially constrained then dual income households could push prices up.

The second is that American house prices haven’t risen as much as people think. The square footage per person resident has soared over this same time period. People are consuming much more housing than they used to – the impact of the dual incomes is indeed – often, largely, perhaps – upon quantity, not just price. Sure, those 1960s bungalows going for $2 million in Palo Alto, that’s rising incomes meeting restricted supply. McMansions are people buying more housing with higher incomes.



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in British English
expunct (ɪkˈspʌŋkt)
VERB (transitive)
1. to delete or erase; blot out; obliterate
2. to wipe out or destroy

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