Juggling Work and Childcare During a Pandemic

I'm Alaya. The pandemic is dragging on, the economy is awful,
and kids are once again doing school from home.
So you're signed. The next few months is cheping up
to be a time of big decisions for a lot
of folks.
You know, we talked last week about the difficult choice
about whether to invest in education or training. Right now,
lots of people are also trying to decide whether to
cut back on work in order to take care of
their kids who aren't able to physically go to school.
I think we know something about that, Betsy. Our kids
could burst in on this podcast at any moment.
Yeah, We're not alone in this. Virtually every family knows
trying to figure out how to juggle kids at home
with the serious business of managing their careers. I'm Betsy Stephenson,
and this is a thing like an economist mini episode
about managing this trade off.
And I'm justin Wolfer's. And while we'll be back next
week to talk about demand, we thought we'd pop in
for this mini episode to address an issue that a
lot of families are facing, how best to balance work
and family in a period when you usual childcare options
may not be feasible.
We don't have the answer for you, but we're going
to use the lessons from the first four episodes to
think through whether now's the time to cut back your hours,
step out of the labor force, or put the pedal
to the metal on your career.
One simple way to frame this question is to ask
how many hours should you put into your career this week?
That's how many questions? So the first step is to
apply the marginal principle and ask should you work another
hour this week?
Okay, So when I say that to people, they often say, hey,
that question doesn't apply to me. You know, my boss
sets my hours. I'm either going to work or I'm not.
But you know that's true for a few people. But
if you think creatively about it, you have some control.
You know, salaried workers decide how many hours to work
on their current projects, and if you're an independent contractor
like a realtor or consultant, you decide the number of
clients you want to take on. If you're an hourly worker,
you may be able to cut your hours or take
on a second job. And whatever you do, you're going
to face the choice about whether to spend a bit
more time working or use that time for its next
best use.
So the question is whether you should work one more
hour each week. To answer that, we're going to need
the cost benefit principle. It's time to tally up the
costs and benefits. Betsy.
The cost to the extra hour of work is the
opportunity cost. What else would you be doing with your time?
For example, that extra hour could be spent with your
kids or your family. This is really important during a
pandemic because for many people the opportunity cost of work
has risen. Their kids don't have in person school, so
their next best alternative to paid work is time spent
on their kids education and nurturing.
Of course, we've got to compare that to the benefit
of another hour of work. The most obvious benefit is
you'll get paid.
Not everyone gets paid for an extra hour of work, though,
if you're a salaried worker, you get paid a fixed
amount each week no matter how many hours you put in.
But the more time you put into your work, the
more you're likely to accomplish, the more you're likely to shine,
and the more likely you are to get promoted or
get a big raise. And actually it's also the case
right now you should think about. You may also be
less likely to get that layoff. The extra hour of
work just might be the difference between having a job
and not.
The fear of losing your job can be an important motivator,
but during a recession it's a really, really big deal.
That's because in normal times, most people can find a
new job within about a few months, but during a
recession it can take six months or longer. Losing your
job is always bad news, but losing it during a
recession is really really bad news.
So let's take stock you only want to work an
extra hour or if the marginal benefits are greater than
the marginal costs. The marginal cost of working an extra
hour is what you would be doing instead, and for
many people there's been an increase in the value of
their time doing work at home. The marginal benefit of
work is not just your hourly wage. In addition, it
can help you earn a promotion and also help you
avoid being the next worker fired.
We're not going to be done until we bring the
interdependence principle in how will your choices about working today
shape your career, your lifetime earnings, and your retirement savings.
Often this is going to be the most important aspect
of this decision you're gonna make. If you give up
working today, you won't be putting some of your salary
towards your retirement, and you'll give up the interest you
could have earned on that money as you work towards
your retirement. But in addition, if you keep cutting back
your hours to the point of quitting your job, then
that time out of the labor force can have a big,
long lasting negative effects on future earnings. Perhaps that most
important cost of taking time time out of the labor
force is putting you on a completely different career trajectory
for the rest of your life.
These long run costs depend a lot on the type
of job you have. If you're in a job that
tends to hire very few outsiders at your level, then
you're going to find it hard to break back in
again in the future. Time out of the labor force
can be really custlying some of these occupations like law
or finance.
But if you're in a field that hires lots of
new people and pays less attention to recent work history,
your choices today might not have much of an effect
on your ability to land a good job. Again in
the future. However, there are a lot of studies that
show that many companies do seem to discriminate against people
who haven't worked in quite some time.
We'll dig into the labor market many of these issues
in a future episode, but for now, my advice is
to think hard about your options and consider the long
run consequences.
For most people, keeping a foot in the door will
be much better than completely leaving the labor market. Even
if your employer is not going to pay you when
you're taking your time off, if they're going to bring
you back to that job, if they'll give you unpaid leave,
that can be a much better option than quitting altogether,
because it helps you maintain that important long run connection
to work.
It's important to be aware that recessions can have negative
effects that last for decades. Keep that in mind as
you think about your best choice.
We can't tell you what to do. You have to
tally up the costs and benefits for you. It's different
today because you'll have to assess both how the pandemic
has affected the opportunities in your industry and how it's
shaped the needs of your family.
Our goal is to help you practice thinking like an
economist so you can make better decisions such as how
much time to invest in work versus family. And as
the pandemic has turned the economy upside down, the stakes
around these decisions have never been higher.
That's why we're excited to teach you the tools of economics.
Next week, we'll be talking about demand and then supply,
and then we'll bring them together in harmony with equilibrium.
Good like making your best choices this week, and as
you go about your day, think at how using the
tools of economics might lead you to make better choices.
If you're enjoying our journey on Think like an Economist,
don't forget to hit subscribe, leave a review, and recommend
it to your friends. I'm justin Morphus and I'm Betsy Stevenson,
and this is Think Like an Economist. To get the
most out of this show, check out our bonus episodes
and supplemental materials available only on the Himalaya Learning platform.
Himalaya Learning provides bite sized courses from world class thinkers
and industry experts such as Arianna Huffington, Malcolm Gladwell, Tim Ferriss,
and Moore for you to enjoy in the app on
the go To.
Get the most out of this podcast and others like it,
go to Himalaya dot com, slash econ and enter promo
code econ eco n at checkout for your first fourteen
days free.
It's time to think like an economist.