Thursday, May 3, 2007

Stay at home [parent] worth $138,095!

As the article breathlessly states, "If the typical stay-at-home mother in the United States were paid for her work as a housekeeper, cook and psychologist among other roles, she would earn $138,095 a year, according to research released Wednesday."

Uh, yeah, right. These articles always annoy me. I'm sorry, stay at home parents are not worth that much money. That's not how the market works. You don't just add up all of the various tasks you do, cross reference them to some generic job field, like 'psychologist' and then add it all up. You find out how much you are worth salary-wise by finding, in the free market, someone willing to pay you for those services. Since probably NO ONE pays someone $138,095 to fulfill the duties involved with child care, particularly when it is your OWN child, then this study is ridiculous.

On top of that, it is ridiculous to equate to a profession like pschologist, something you need multiple degrees and many many years of hard work before you could earn money as one. I'm sorry, having a functional reproductive system does not automatically qualify you to get paid market rates as a psychologist. Even the 'cook' title is silly, because it compares to professional chefs, again, people who dedicate considerable time and effort perfecting the craft of cooking. And it probably doesn't even factor in the fact that if you cook for your children, odds are you are cooking for yourself at the same time, and presumably you won't be hired to feed yourself.

I think the only way to get a "realistic" estimate on a silly notion such as this is to look at what the people who actually fulfill this sort of role are paid. E.g. Nannies. Last I checked, even nannies to the rich don't make $138,095 per year. But then I don't have much contact with those folks, so what do I know. I do know that friends who have had nannies paid them around seven dollars an hour, which would equate to $14,000 per year, call it $25,000 with generous hours of overtime, up to 60 hours per week. That's rather short of $138,095. And it shows the true economic value, if you want to reduce it to that, of stay-at-home parenting.

Incidentally, I was a stay-at-home parent for my daughter for the first six months of her life, so I am intimately familiar with everything that is involved in that and I know it isn't easy. Of course, it was also very rewarding and I'd not trade those days for any amount of money. But then, that is a personal thing. The fact is, we do NOT get paid to take care of our own. We can't even tax deduct the cost of raising a child. Child support does not reduce your tax obligation. And for good reason. We are expected to take care of our own. If you want to have a child, you need to make sure you can economically support that child. That is the proper, responsible thing to do. It is ridiculous to expect to get paid for doing that, but that is what is behind the mindset of setting a monetary value on staying at home as a parent. Does it have value personally? Yes. Is that something you can quantify with money in the form of a salary? No, it really is not. So surveys like that just plain annoy me. They aren't based in any sort of economic reality.

The choice whether to stay home or not is a personal one that depends on many factors, some of which you don't have much control over. You may feel underappreciated for doing it. I know I did at times. But that doesn't mean it was worth $138,095 per year for me to do it. (A sum that, incidentally, probably vastly exceeds the maximum salary for almost every profession).

So please, no more of these stupid articles.

21 comments:

Robert said...

Thank you, I thought much the same myself when I read the article. Certainly being a parent is a large task, but assigning that number was just silly, and slighty disparaging of people who actually follow those careers.

If anything articles like this only serve to make people skeptical of the contributions parents make.

butter said...

I think the symbolism of the salary figure is rhetorically powerful, but statistics always lie.

I do agree that assigning financial value to life-maintaining work is an abstraction because, as you say, no one's going to pay. At the same time, what other commonly accepted tribute besides money could we use to discuss the value of that work?

Pissed OFF Housewife said...

Dude I'm totally worth a bazillion dollars an hour.

Except on Fridays because then I'm drunk....

Anonymous said...

Silly me, I always thought people had children and looked after them because they loved them...

armagh444 said...

While I tend to agree that the dollar values assigned or typically over-inflated, I don't think that critically undermines the essential point of the study, i.e., that "women's work" is typically under-valued in our society.

DBB said...

I don't really think that is the point of the study, though. Because it applies equally to stay at home dads. It is an absurdity because well, kids are expensive and you simply do not get monetary compensation for taking care of your own kids. In fact, you just get jail for not doing so.

I don't mean to belittle the great value there is in being a parent and taking care of children - after all, I did it as a stay at home dad, and I may do it again, depending on what happens in the next few years. I just think it is such a flawed study with such flawed methodology that it doesn't prove much of anything except that the people who put it together are not particularly familiar with economics.

I think what ought to be a major point is not about the value of a stay at home parent, but what the main reason is for us not to have as many of them these days - the econmic reality that most couples simply cannot afford to have only one of them work. One income no longer is enough to support a family in too many cases now.

beansa said...

Wow, DBB, nannies are really underpaid in your neck of the woods. Where I live (and I am a nanny, part-time) the going rate to care for one child is $15-$18 hour - and that doesn't include housework. At $15/hour, 40 hours a week you'd be paying $31,200 annually, but you'd only have coverage for 1/3 of the hours in a day. To cover the other hours would cost another $49,450 - based on $15/hr for the 2nd childcare shift and 6.25/hr for the 3rd shift (that's less than minimum wage here by the way). So, just for the nanny to be on 24/7/365, you'd be paying around 80K. And, like I said, a lot of nannies don't clean, shop, do the household accounting, keep track of all the other household paperwork, appointments and obligations, organize a social life for the family, plan vacations, and whatever else stay-at-home parents do. Nor do most nannies love the children they care for the same way a parent does.

I think the point of the article (and salary.com's press release) was that stay-at-home mom's are working hard, and that the work they do is valuable, even if it's not recognized by our culture as such. Notice the close-to-mother's-day timing of the press release.

And, just because we don't get paid to take care of our own children, doesn't mean that we *shouldn't*

DBB said...

I don't doubt that nannies in some places can make a decent salary, close to 40-50K. But that is a far cry from 138K. The other miscellaneous activities you suggest really do not have that much monetary value in them - really, how much would the typical person of modest means pay to have someone else balance their checkbook - probably not much, because it is a relatively easy activity and they can't afford to pay much for it.

I'm sure there are more expensive nannies in my area, but then the COL in my city isn't exactly that high - I live in a very nice house that was custom built for us that probably cost 1/2 of what it would have cost in a different city just 80 miles away.

I don't think anyone doubts the value of a stay-at-home parent. I just don't think it is truly worth 138K. And I really don't think anyone should be paid to take care of their own kids. Kids are the parent's responsibility - legally, ethically, morally. To use a horrible analogy (bear with me) it would be like paying a company a fee to clean up the pollution they dumped in your yard - they should not be paid for it, they should eat the costs, because they were responsible for it in the first place. Not that kids are pollution (unless you count the diaper pail...) but I'm only analogizing the responsibility issue here. (Yes, I love my daughter and will never compare here to pollution, except on the days I empty the diaper pail... ;) )

beansa said...

Aren't children also members of society, and thereby also the legal, ethical, and moral responsiblity of society?

Michael Bryan said...

You are missing the point. It is as if someone tried to quantify the value of love and aggregated the services of a round-the-clock hooker to arrive at the market value. Of course the 100K+ salary is ridiculous, but the point is to encourage people to think of child-rearing as a valuable service to society.

Really, the task of raising the next generation of humans is a priceless and fundamental service to our species and the economic future of our nation, which, in our culture, is too frequently valued below (in every sense) activities and services that can be easily commoditized for market.

Assigning an economic value to child rearing is a political statement, not an actual attempt to arrive at a true market value. What the authors are saying is that we OUGHT to value this service much more highly than we currently do, and create public policies which support doing such work, even if there is a significant economic cost involved. Your instinct to critique their methodology is just a sign that you didn't quite get the point.

DBB said...

Their point, then, is lost in their very flawed methodology. One doesn't need to talk about money at all to say that a stay-at-home parent has great value to a family. At times my wife has suggested I just stop working because she'd rather I take care of our daughter than day care. But I think day care is good for her - she interacts with a lot of other kids, and they do teach her things there. Plus, my wife on alternate days wishes I not only made money, but more than I do now. So it is all about tradeoffs.

And as far as missing the point - the article really does not make the case that stay-at-home parents have been undervalued. Everyone I have talked to about the issue who is a parent has at one time or another wished they could stay home with their kids (or in fact already were, and really were happy that they could).

thinking girl said...

yeah, DBB, I agree with Michael that you've completely missed the point. You say that most people you've talked to wished they could stay home with their kids instead of work.... and where's the rest of that thought? It's pretty obvious WHY they couldn't stay at home with their kids - because the way our economy is set up does not value caring work within the domestic sphere, and it is therefore UNPAID.

And while your point, as indicated in the title of your post, that this applies equally to fathers who stay at home, is, well, just not reflective of reality. The majority of parents who stay at home with their children are women, and this kind of domestic caring work is still very closely associated with women. To imply otherwise is seriously disingenuous.

I posted about this as well, from a very different perspective - but I did agree with one of your points, and gave a hat tip in my post with a link to your post.

DBB said...

That just doesn't make sense - claiming it is unvalued because it is unpaid? Nobody pays me to clean my own toilets. Does that mean janitors and maids are unpaid? In fact, Domestic work is valued GREATLY - nannies can make well above the median salary in this country. The only hitch is, you ONLY get paid to take care of other people's kids, not your own. So if you want to take care of kids and get paid for it, you become a nanny.

And you ought to have fun with tax law, then. Say you mow your own lawn - if you really assigned a dollar value to that, then you have in essence enriched yourself by the cost of the service of 'mowing the lawn' - and therefore, you would owe taxes on that value. So if raising your own kids at home was worth $138,095, not only would you NOT get the money (you gave yourself the equivalent service) but you would then owe probably $50,000 in taxes for it if the logic of the article were adopted as an economic reality.

The rest I also posted on your site:

The problem I have with it is assigning a monetary value to it, because it simply makes no sense economically. Nobody PAYS you to mow your own lawn. That's your responsibility. You are the one who gets the value out of it.

Why would I want to pay someone else to raise their own kids?

But if you really want to get right into the economics of it, where you have a couple living together and one of those two people stays home, the stay-at-home parent IS paid, in essence, room, board, and 1/2 (or more) of the salary of the working partner. I've seen previous economic studies which show that in such situations, often over 50% of the income is spent at the direction or discretion of the stay-at-home parent. So, in essence, they are paid, though it is by the only party who would have a stake/reason to pay them - the other parent of the child.

There are a lot of things in life that have almost infinite value in the sense of how much we enjoy them and make life livable that have zero monetary value. That's my main objection to the article. It attempts to put a monetary value on something using very flawed methodology that ultimately detracts from any point it may make.

(For instance, I drive myself to work each day and pick up my daughter from daycare after work (my wife usually drops her off). So even though I'm not staying at home right now, should I add that to my salary as money I deserve for doing that? ) It just makes no economic sense. You don't pay people for doing something they want done. If I drive myself and my wife to the movies, since I am acting as a chauffeur, should I get paid for that?

And now if you somehow did agree that stay-at-home parents should be paid $138,095 a year for staying home, who would pay it? Where would that money come from? What if it is a single parent? Does it go up for more kids? What if you are paid that much and decide you can just then have 10 kids - after all, you are being paid to have them, and kids are pretty wonderful (well, my daughter is to me) so why shouldn't I just have 9 more like her and then get paid $1,380,950 a year? Will you pay for me to have kids? If you won't, then we're back to 'where does the money come from'? See, putting money into it and all these 'jobs' just derails and loses the original point.

If you really want to know what the problem is today, it is probably that both parents have to work so no one can afford to be stay-at-home. And part of the reason for this is jobs being shipped overseas. Probably another part of it is executive compensation increasing to 500 times the average worker while worker wages stagnate. I don't pretend to have the answer there. But it isn't about stay-at-home parents not being valued.

heliobates said...

DBB:

Cogent points. The only possible argument I could have for assigning monetary value in the manner of the study is to account for opportunity costs.

GAAP and taxation laws may not necessarily recognize these costs, but they do contribute to economic analysis, as any of my Management Accounting profs would happily explain.

So a woman's domestic work may be worth market value, but she's also forgoing income from a career outside the home. Any responsible economic analysis of the value of domestic work should take this differential amount into consideration.

Have fun coming up with that model. I'm in way over my head already.

Megan said...

I love your blog! Nothing beats a good rant about stupid stuff. You may enjoy reading Cultural Subterfuge. It is very much in the same vein as your blog.

Lindsay Beyerstein said...

"Psychologist" is a stretch, but other than that, I don't see a problem.

The question is not how much a real SAHP deserves to be paid, but rather, what all the work they do would cost if it had to be bought.

Economists understand that work is work. Of course the results apply to SAHDs. Point is, our cultural view of domestic labor is at odds with the economist's calculations.

To an economist, the work I do to feed myself is still work. If I'm too busy to do it myself, I have pay for pizza delivery. Walking your own dog is work. If you don't do it, you've got to hire a dog-walker. Caring for your own child is work. You can do it yourself, or outsource it to a babysitter.

DBB said...

I understand that work is work. But when we are talking about work you can make money on, that's a different matter entirely.

You could pay someone to dress you, make your bed, cook your breakfast, drive you to work, and drive you home, but that does not mean you deserve to be paid any money as if you were a maid, page, cook and chauffeur just because you do it for yourself.

That's because, for example, cooking by itself doesn't have economic value. For instance, if you cooked a fabulous meal, and then when you were done, you just threw it all in the trash, while you certainly would have done a great deal of work, you've done nothing any sane person would have paid you for. It isn't the cooking that has value. It is the cooking FOR SOMEONE ELSE that has value.

A taxicab can drive from here to New York and back, but without a passenger, no one is going to pay for the trip. It isn't driving the cab that pays, it is driving the cab FOR SOMEONE ELSE to get them somewhere that pays.

That's what is missing when you try and come up with economic value for a stay-at-home parent who is taking care of their own house and their own children. They aren't doing it for anyone else, they are doing it for themselves. If they have a spouse, you could say they are doing it for them as well if the spouse shares the house and children, but then, in that case, they ARE getting the spouse's pay, so there is compensation of a sort.

Lindsay Beyerstein said...

The issue of whether SAHP deserve to be paid is separate from the question of whether they do work of real economic value.

Salary.com isn't arguing that SAHP deserve any salary. From who? Their spouses? The government?

It's not a question of doing for oneself vs. doing for others. As you said earlier, it's a question of what that service would be worth on the market.

If you had to pay someone to care for your children 24/7, you'd have to pay a lot of money. A nanny on this thread estimated 80K/year for 24 hour care for one child with no housework.

Even if you just add up the additional low-skill services that SAHPs provide, the total figure adds up fast at market rates. Even if you only assign the equivalent of fast food wages for cooking, maids' wages for cleaning, concierge's wages for shopping and other errands, and chauffeur's wages for driving, the fact remains that SAHPs log a lot of hours.

Homemakers may also add value that you wouldn't get from your average low-wage worker. For example, most home cooks have a wider repertoire than a burger-flipper at McDonalds.

Even by the most conservative estimates, SAHP are doing work that would otherwise cost their families a lot of money. The fact that they do the work for their own families, instead of hiring someone is irrelevant from an economic perspective.

DBB said...

But Lindsay, what does that mean, exactly? I guess I'm asking, what is the point, beyond pointing out that a family gets value for itself out of having a stay-at-home parent? I don't know anyone who would say otherwise.

And I don't doubt that nannies can make a good living. Probably 30-40K here, probably double that in a place like NYC. I wouldn't add on top of that the other miscellaneous jobs, because one, once you start getting up in salaries, you end up with, well, salaried workers who don't get paid for working over 40 hours, even if they work 100 (yes, I've been there). And also everyone is familiar with the jobs that involve lots of miscellaneous things - like a personal assistant, which someone who did domestic duties for pay would essentially be for a family. PAs don't get extra money because they are asked to pick up the dry cleaning. They just take it as part of the job. Anyone paid 80K for domestic duties (twice the median pay for lawyers just out of law school in my area) is likely to be expected to do quite a lot to earn that money.

Chris Hill said...

DBB,

I'm with you here. I should get paid extra for the yardwork I do, the time I spend talking to my wife when she needs someone to talk to (that's a psychologists job too), the cleaning I do around the house (not as much as my wife, but still...) as well as any work fixing things around it, whenever I take care of the dogs, all the work I do on our cars, and since my wife only works part time I should get extra for whatever part of my paycheck she uses. That would only be fair, right?

You don't get paid to take care of your own things. That's how life works.

(For what it's worth, the work my wife does around our house is priceless to me. To put a price on it as if it's a job to be given to the lowest bidder is somewhat insulting.)

Mountain said...

Well that proves my point that my wife is worth a lot more than me.