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On Oren Cass’s Response to (Some of) His Critics

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Here’s a letter to Medium:

Editor:

Oren Cass deserves applause for his detailed response to some of the many criticisms leveled at his Cost-of-Thriving Index (“The Cost-of-Thriving Index: A Reply [2],” March 5). And I’m sure that the critics to whom he responds will come back with their own replies. I look forward to the continuing conversation.

But three general points now seem worth making about Cass’s defense of his COTI.

First, the most detailed and thorough criticism of the COTI was offered in four long Twitter threads – here [3]here [4], here [5], and here [6] – by Scott Winship. It’s surprising that Cass ignored Winship’s comprehensive critique.

Second, Cass misses the mark by taking issue with Mark Perry’s “methodological adjustment … to switch from one worker’s earnings to household earnings, claiming credit for the added income of converting a stay-at-home parent into a wage earner.” Cass accuses Perry of assuming, in effect, that a parent who stays home “just sits around eating bon-bons.” This accusation is uninformed. Perry assumed no such thing.

It’s true, as Cass notes, that stay-at-home parents work hard and produce. But it’s untrue that what stay-at-home parents – let’s be clearer: stay-at-home moms – contributed “is all lost when the extra income is gained” by the parent entering the workforce.

Among the most important reasons why many more women today, compared to in the past, work for market incomes is that laundry, cooking, house-cleaning, and much else of what once was most efficiently produced by stay-at-home women is now most efficiently produced by specialists suppliers outside of the home and then purchased for the home. Households today still get most of the goods and services that stay-at-home moms once produced plus whatever other goods and services are purchased with working-women’s incomes.

Cass, by the way, gets no points here for pointing to the “utility” and “fun” that he imagines women would get by staying home and that they thereby sacrifice by choosing to work in the market. The reason he gets no points is that, because the women who choose to work in the market actually choose to do so, they thereby reveal that the value to them of this stay-at-home “utility” and “fun” is less than the gains they enjoy by working in the market.

Third, and most fundamentally, it remains utterly mysterious (as I believe Michael Strain pointed out somewhere) why we should be surprised – and worried – by the fact that, since 1985, median male income has fallen relative to major household expenditures. The very fact that a greater portion of women today [7], compared to 35 years ago, work in the market – along with the rise in women’s real earnings [8] – naturally results in households’ real monetary expenditures today being higher than they were in 1985 relative to the earnings of men. Cass’s now-(in)famous chart [9] shows nothing more startling than the obvious reality that a typical two-income household would have trouble covering its expenditures if the income of one of the earners is assumed away.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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