Knowledge workers are well placed to manage transitions driven by automation. Service workers are more vulnerable. Home support work is underdeveloped. Making child-care and other forms of home support tax deductible could help both kinds of worker.
Knowledge workers (whom Robert Reich called "symbolic analysts") are well-positioned to manage economic shifts driven by computerisation and automation. They have education, managerial power, and higher incomes. It's the traditional service workers that are more vulnerable to computerisation and automation.
The main problem faced by symbolic analysts is time poverty. Since people tend to partner in the same class, knowledge workers tend to partner with knowledge workers, resulting in double income families, or--when kids arrive--families in which one partner (usually the woman) is forced to abandon career to become a houseworker. This is a loss to the economy, and to gender equality.
Alternatively, if the household remains double-income, the knowledge workers encounter time poverty, and the risk of raising "latchkey kids" whose parents are overworked and mentally, emotionally or physically "absent".
Some service workers develop small businesses aimed at home support: child care and cleaning. These provide stable incomes and professional autonomy. The sector is worth billions in income for service workers.
These small service businesses face a constraint: because they are paid out of after-tax income, there is a limit to the degree to which knowledge workers can call in service workers to assist at home. Childcare, in particular, has reached crisis levels, and even full-time double-income families cannot afford in-home childcare for small children.
If in-home support services were tax deductible, knowledge workers would be more able to employ small service firms for shopping, cooking, childcare, chauffeuring and cleaning. These small firms could expand their service offerings, and knowledge workers could focus on what they do best: knowledge work. Everyone would benefit. The economy would be more efficient. Some tax dollars would be lost, but this could be recovered by the improved productivity of knowledge workers, and the improved income stability of family-run home service businesses.
Socially, this could be construed as a return to a society in which wealthier families had servants to do their housework. But my personal experience is that the reality is different. When you call in people to help at home, they are professionals, with their own businesses, and multiple clients, and you treat them like peers. At the same time, because they become involved in your family life over many years, they also becomes friends and family. A better conceptual model for how this operates socially then might be as a returned to the extended family, and the village. Children are raised and households kept by a variety adults, who treat each other both as peers, and as family, but with different roles in the economic village.
"It takes a village to raise a child." Though the origins of this saying are disputed, it is a social reality in many cultures. And in our emerging economy, it may take a village to not just raise a child, but also to make a home. Encouraging knowledge workers to welcome service workers to join in making their homes can create a better life for both. By providing the financial framework to make this mutually rewarding for all parties, the government can help support this new social reality: less pressure for the knowledge workers; stability of income for service workers; peerhood and a new sense of extended family for both.