Thursday, December 11, 2008

When the Going Gets Tough, Some People Lay Off the Nanny

The Wall Street Journal has a fascinating story this morning in its front-page-bottom-middle-human-interest spot on the luxury of hired help. The problem? It's the first thing to go when times are tough -- allegedly. You can read the article (at least for a day or two) here.

Reporter Miriam Jordan does an excellent job tracking down several families who once employed nannies, housekeepers and the like and then, as the economy went south, had to let them go. Dolores Jacobo, for instance, ran a Malibu, California household. Then this month, her employers "tearfully informed her that her $1,000-a-week position is being eliminated" because they had "to cut expenses by 75%."

As the nut-graf says, "The weak economy is wiping out a symbol of the wealth boom: the megananny and other high-end help." (Though interestingly, a neighboring story points out that remittances are holding steady... so clearly not everyone is letting their nanny or housekeeper go).

Jordan also gives us some useful stats: In a Pinch Inc., which supplies household staff in 11 New Jersey counties, reports that business is down 30% this year. Annie's Nannies Household Staffing in Seattle estimates a drop of 10% so far this year. "Since the 1990s, household help has become accessible and even de rigueur for many middle-class families. The number of domestic placement agencies jumped to about 500 today from about 30 just 15 years ago," the article notes.

But then the story goes on to tell a rather horrible story about the Sirof family, which has a 5-year-old and a 3-year-old, and a stay-at-home mom. The family used to pay their nanny, Alba Monterrosa, $600 a week. Mrs. Sirof reports that she was "a second mom to my kids." But, "a few months ago, the family decided they couldn't afford Ms. Monterrosa anymore and let her go. Mrs. Sirof's daughters took the separation badly. They inquired incessantly about 'Vita,' as they called her. Normally, a lively child, daughter Addie became sad and withdrawn. A doctor Mrs. Sirof consulted suggested renewed contact with Ms. Monterrosa."

Mrs. Sirof reports that she feels "horrible" about all this, but she is not willing to give up other perks to keep Ms. Monterrosa around more. "Nothing deters me from my Botox treatments."


While the article is right in noting the rise of outsourcing household work, I think it misses the mark with some of these stories. For starters, it has people with nannies trading down to daycare -- which would not be a financially savvy move in our case. Jasper's daycare plus hiring a sitter 1-2 nights per week (which we might not need if we had a full-time nanny) comes out to about what Ms. Monterrossa earns. Daycare isn't a financial choice, it's an educational choice. It does note that some strapped families are looking at "nanny shares" which is probably a good idea for socializing children anyway (if the nanny is up for it).

But -- and this is the big but -- the largest anecdotes in this piece are clearly about families with stay-at-home moms who still have full-time nannies. This is a phenomenon I've never entirely understood, though I do see it from time to time. For instance, Dolores Jacobo's employers "have busy lives" that include "volunteering at school, going to the gym, visiting the chiropractor and getting various beauty treatments like facials, manicures and pedicures." Mrs. Sirof, likewise, notes that Ms. Monterrosa was there "when she went on spa trips or outings to get Botox and Juvederm injections."

This makes for good copy, but this is not the usual experience of people who outsource household tasks. You know what I do while I am outsourcing things like housecleaning? Working.

This is actually a good financial choice for me. In recent years, things like maid services ($80 every two weeks), laundry services ($25 a week), meal delivery (like buying ready-made meals from Fresh Direct) and the like have become relatively accessible, even to the upper middle class. This is mostly because these days, people outsource to small businesses rather than individuals per the WSJ story (think Merry Maids, not a housekeeper, or grocery delivery, rather than a cook). I earn more per hour than any of these things wind up costing me. By outsourcing these tasks, 2-income couples can focus on their core competencies of work and nurturing their children.

Childcare is, of course, a slightly different matter. Not only is it a core competency that most of us don't want to outsource any more than we have to, it is still relatively expensive. But in 2-income households, everything else -- Botox, Juvederm, spas, even car payments, eating anything but rice and lentils, etc. -- has to be cut before childcare, because it isn't a "luxury." It's the one thing that enables the two incomes to exist in the first place. If you do have to cut household expenses 75%, it's probably because one party lost his or her job. But then, letting the nanny go makes sense -- not so much because "the going gets tough" -- but because one party is available to be a full-time stay-at-home parent.

As it is, I have a solution to Mrs. Sirof's problem. Clearly, the children want their nanny back. The best way to afford her and the Botox?

Get a job.

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