Janet Yellen Told a Story about Childcare Economics

Janet Yellen

Treasury Secretary Janet Yellen spoke on September 15, 2021 about the need for the United States to strengthen its childcare system. A Department of the Treasury report had found that the United States’ childcare system is overloaded. Worse, lack of childcare has significant implications for economic growth.  Yellen told a personal story to make an abstract economic principle come to life.


Janet Yellen’s Economics Story

Good speakers tell stories. Communication researchers call this the “narrative paradigm.” Yellen began her presentation with a personal story about when she needed to pay for childcare as a young working mother in 1981. Her story did not just illustrate her point, but also helped her explain economic theory. Her story showed that working families rely on childcare, that it is important to pay childcare workers a good wage, and that the economy depends on childcare. Here is her story as she narrated it:

“We didn’t plan this, but today is a very appropriate day for me to participate in this event. Because it turns out, forty years ago on this exact morning – September 15th, 1981 – I was returning to work.

“My son Robert had been born over the summer, and by the time the school year rolled around, I was ready to resume teaching again at Berkeley. I needed a babysitter, and I started doing some research. What was the going rate for childcare in the Bay Area? I asked friends with kids and surveyed childcare providers, and when I came to an answer, I called the Classified section of The Daily Californian – people still used those back then – and purchased a ‘help wanted’ advertisement, offering ‘good pay,’ the market rate plus a few dollars more per hour. ‘Job starts on September 15,’ I added.”

Yellen’s story stressed that she and her husband were willing to pay more than the market rate to attract a babysitter. Why would anyone do that? Conservative orthodoxy says that people should be paid according to the market, as if the market has some magic moral power. As she spoke, however, Yellen pointed out that employers gain benefits when they pay more than the market rate. She made that point by continuing her story. Here is what she said next:

“Why a few dollars more? My husband George was an economist too – he still is – and at the time, we were both interested in the topic of ‘efficiency wages.’ Classical economics says that it’s not rational to pay a worker more than the market rate, but we hypothesized it could be. The job might be an important one, for example, and a higher wage could encourage someone to do better work. That’s a completely rational reason to pay someone more, especially if the job is some of the most intimate work there is, which is caring for children.

“Our hypothesis proved correct, at least in our own home. The advertisement led us to a babysitter who took wonderful care of Robert while George and I were at work.”

Yellen was rhetorically clever to slip economic theory into her narrative. She slyly acknowledged that she had violated economic orthodoxy. She continued, however, that paying more than the market rate helped to attract a good babysitter who proved to be loyal and caring.


And on to policy recommendations!

Yellen’s story helped her explain the need for better financing of childcare. “The free market works well in many different sectors,” she insisted, but childcare is not one of them.” She continued:

“It does not work for the caregivers. It does not work for the parents. It does not work for the kids. And because it does not work for them, it does not work for the country.”

(I love parallel language, by the way, which helps audiences see how different points link together: “It does not work for … It does not work for … It does not work for.”)

Yellen went on to cite economic figures about the number of workers who had to drop from the labor force or change jobs because they couldn’t get adequate childcare. That was good, but her story had already made that point – it was her story that helped the audience understand why financing childcare was important. She concluded, in fact, by referring back to her own story: “Indeed, looking back, I am not sure whether I would be here, in this job today, if I didn’t have an excellent babysitter 40 years ago.”

Read: Does a Speaker Always Need to Be Energetic?

Yellen has never been a dynamic speaker, but she has an extraordinary gift for being clear. She made her point sharply and precisely. It is unfortunate that critical events in Afghanistan and the coronavirus drowned out news reports of this important and dramatic speech.

Economic theory is always abstract and mathematical. Yellen’s personal story framed her economic recommendations to help the audience understand them in human terms. Good speakers tell stories. Advice to speakers: tell stories. And don’t just tell random stories: instead, tell stories like Yellen’s that help you make your point. Tell stories like Yellen’s that help you prove your point.

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Read: Janet Yellen Established Her Credibility During Her Confirmation Hearing

Read: Janet Yellen’s Speech at Jackson Hole: We Need a Stable Financial System

Read: Alexandria Ocasio-Cortez' First Congressional Speech Told a Story
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P.S. The entire Department of the Treasury report about “The Economics of Childcare Supply in the United States” is well worth reading.

Research Note: the late Professor Walter R. Fisher introduced the concept of narrative argument in a 1984 article that he published in Communication Monographs.

Image: Department of the Treasury

Janet Yellen Established Her Credibility During Her Confirmation Hearing

Janet Yellen

Always calm and measured in her speech, Secretary of the Treasury nominee Janet Yellen is past master of the art of establishing credibility. She demonstrated that quality once again in today’s opening presentation during her Senate confirmation hearing. Scholars of speech and persuasion have known, literally for millennia, that the speaker’s own character is the most powerful element of a persuasive speech.

We might think that the most energetic speakers are more credible, and this is often true. Not always, however. Consider Yellen’s persuasive challenges:

 

1. Nobody in the United States Senate wants to put a firebrand in charge of the United States Treasury. Yellen needed to persuade people that she would be a sure, calm, sober advocate of good fiscal policy.

 

2. Economics is a scary subject, whose devotees throw around analytic geometry problems and billion-dollar figures like confetti. Yellen needed to give economic policy a human face.

 

3. Having run up enormous budget deficits over the last four years, Republican legislators have suddenly become fiscal hawks. Yellen needed to advocate President-Elect Joe Biden’s economic policies, which call for massive coronavirus relief, without scaring the hawks too much.

 

Speaking remotely from her home due to coronavirus restrictions, Yellen used two simple techniques to establish her credibility. 

Janet Yellen's Speech at Jackson Hole: Do We Need a Stable Financial System?

 

Economics, the Human Science

 

Yellen’s first technique was to talk about her background in a way that gave economics a human face. She accomplished that by talking about her parents, who she described as children of the Great Depression. She said this about her father, a family physician: 

“He was the kind of doctor who treated the whole patient. He knew about their lives, about when they’d been fired, or couldn’t pay. Those remain some of the clearest moments in my childhood.”

She then emphasized that she viewed economics, not as a sterile economic field, but as a way to help people improve their lives: 

“Economics is sometimes considered a dry subject, but I’ve always tried to approach my science the same way my father approached his, as a means to help people. And this committee, I believe, has viewed it the same way, especially during these last few years.” 

It never hurts to compliment your audience, does it?

 

Similarly, discussing her expertise, Yellen did not waste time boasting about either her credentials (she was a Professor of Economics at the University of California Berkeley and chaired the Federal Reserve Board for four years) or her impressive scientific research record. Instead, once again, she focused on the human side of economic science: 

“I have spent almost my entire life thinking about economics and how it can help people during hard times.”

In other words, instead of discussing abstruse economic theories, Yellen emphasized her commitment to helping people. Since the economy has been struggling during the pandemic, her comments were both timely and thoughtful.

 

 

Calm Delivery

 

Yellen’s second technique was to speak calmly and clearly. Although she used plenty of vocal variety, Yellen never raised her voice. She spoke slowly and quietly in measured tones and did everything she could do to play the part of the calm, self-assured grandmother. That was exactly the right tone for her purposes. I could almost smell chocolate chip cookies baking. It’s hard for even the most bellicose politician to get angry with someone who speaks as she did.

 

Still, her delivery was varied and interesting. For example, when she said of her father, “He was the kind of doctor who treated the whole patient,” she paused just before she said “the whole patient.” That emphasized her point without ever making her sound shrill.

 

Yellen’s obvious goal was to sound calm but concerned. Her delivery did as much to accomplish that as the words she spoke.

Shaktikanta Das Gave a Central Banker's Perspective on the Coronavirus Depression

 

Conclusion 

Yes, people admire powerful speakers like Martin Luther King, Jr. or Barack Obama. But there’s something to be said for a speaker who is calm and reassuring, whose caring attitude gives us hope. Always relaxed under pressure, always measured in her thoughts, Yellen makes herself an easy person to trust.   

 

 

Interested in Yellen’s research? This 2018 paper is less technical than most of her work and helps readers understand current United States economic policies.

  

Thanks to rev.com for once again preparing a quick transcript of Yellen's statement. 

 

P.S. I have no idea whether Yellen is a grandmother, much less whether she does or does not bake cookies. Not my point.

Image: Federal Reserve