Businessweek Archives

You Want `Family Values'? They'll Cost Billions


Social Issues: Commentary

YOU WANT `FAMILY VALUES'? THEY'LL COST BILLIONS

A parent on hand when children get home from school. Students getting the best education possible. More police on the beat, fewer drug addicts on the streets. More individual responsibility, more compassion. In two words, "family values."

The call to defend "traditional" values was the centerpiece of the Republican Party's convention, and it is hard to come out against the family, or better schools, or safer communities. Maybe, that's why no one in the GOP camp--or the Democratic one, for that matter--discusses the costs to our economy of resurrecting a Father Knows Best lifestyle. The costs involve parents leaving their jobs, less income to support consumer spending, and shifts in government resources to train police and address our social woes--changes in public spending that have never been popular. The reason family values are so valuable is that they carry a large price tag.

Perhaps the biggest expense to recreating a 1950s' sitcom is having a parent staying at home. Certainly, most families would love to have that option, but can this economy afford to lose 14.3 million workers? That's the number of families with children in which both parents work, according to the Labor Dept. Supposedly, one parent should give up his or her job to tend the offspring. But that would cause a severe labor shortage in the U.S. As lengthy as unemployment lines seem, the 9.7 million jobless wouldn't offset the loss of these moms or dads. Add in discouraged workers who have given up looking for work, and the pool of labor increases only to 10.8 million.

The resulting loss of income from so many people leaving the labor force would also be detrimental to the demand side of this economy. For most households, the second income is not a luxury but a necessity. In fact, women going to work was the major reason family incomes increased in the 1970s and 1980s. Working mothers bring home 29% of their households' average incomes: Their salaries account for 7.2% of all wages and salaries in the U.S. Knock those wages off the books, and you reduce already sagging consumer spending by 5%. Presumably, wages would have to rise not only to compete for workers in tighter labor markets but also to help families make ends meet. Businesses probably wouldn't like the extra push to labor costs--their largest expense. Plus, faster wage growth would tend to boost inflation and interest rates.

Such losses are the unseen costs of family values, but there are also explicit outlays that would tap into already strained public coffers. Vouchers for school choice, for example, wouldn't come free. The cost of private schooling now comes entirely out of a family's personal budget. But with vouchers, state and local governments would, in effect, subsidize that tuition: Depending on the amount of the voucher, the price tag could be anywhere from $5 billion to $20 billion nationwide. Since states would have to get that money from somewhere, "there is marginal evidence that choice will raise taxes," says Charles F. Manksi, an economics professor at the University of Wisconsin at Madison who has studied the voucher system.

Other programs promoting traditional values also are popular--as long as no one mentions the costs. Both President Bush and Governor Clinton favor more police to make our neighborhoods safe again. But police training costs from $15,000 to $20,000 per officer across the nation, according to the Washington-based Police Foundation.

TREATMENT TAB. Another social good would be treating the estimated 600,000 hard-core drug users. That would cost some $8.1 billion, says the Phoenix House Foundation--about $1 billion more than President Bush pulled out of the Treasury's hat for post-Hurricane Andrew relief. So why hasn't government provided funding for treatment before now? Dr. Mitchell S. Rosenthal, president of Phoenix House, a drug-treatment center in New York City, says people wrongly consider drug addiction a crime, not a disease: "Drug abusers are the reason we must put three locks on our doors. We prefer locking up drug abusers rather than offering treatment." And that's despite evidence that the cost of treatment is peanuts compared with the $76 billion annually that drug abuse costs the U.S. in terms of crime, lost productivity, and health care, according to a study done by the University of Southern California.

But America didn't devote more money to social programs in the flush 1980s. Would we do it now, when finances--both in government and in the private sector--are extremely tight? No one objects to building an America where all children are loved, all streets are safe, and all schools are efficient. No, no one is against family values. But no one wants to pay for them, either.Kathleen Madigan


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus