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The example that started this is someone taking care of an elderly person themselves vs working overtime and paying someone to do so. Simply by working overtime
by epups 3y ago
The example that started this is someone taking care of an elderly person themselves vs working overtime and paying someone to do so. Simply by working overtime for a company, this person created economic value, likely higher than of their own wage. Second, other economic agents received payment in exchange for services, so this also increased our productive output. In both sides of this operation, taxes were paid, and the country is therefore wealthier in both a fiscal and economic sense.
I think the confusion here is because it seems odd that taking care of your parents by yourself is not considered productive unless you exchange money for it. GDP is an imperfect measure, and by definition does not take into account such voluntary/unpaid activities.
- MichaelZuo 3y agoI don't see how formalizing and adding money to an informal relationship increases wealth. The caregiver is doing the same work either way. Where is the wealth increase coming from?
- epups 3y agoBefore we continue our discussion, can you tell me what is your definition of wealth?
- MichaelZuo 3y agoI go by the OED standard definition.
- epups 3y agoAssuming you mean OECD, and that for these purposes we consider money reserves as an asset, then the person doing overtime has no increase in wealth (assuming they paid the same to the caregiver), the caregiver has an increase, every company involved have an increase, and the government also has an increase in wealth. If the person doing overtime is more qualified than the caregiver, then productivity increased as well.
- MichaelZuo 3y agoI meant OED as in the Oxford English Dictionary. The OECD definition seems suspect, an increase in money reserves does not guarantee an increase in wealth when there's been inflation. Do you have a source for it?