A Caregiver’s Worth

Last week Ruth Mantell at The Wall Street Journal‘s Marketwatch posted this ill-titled piece “Calculating the Value of Women’s Work.”  I say ill-titled because what the article discusses is not “women’s work” per se, but rather work that has traditionally been done by women.  It also mixes apples and oranges by comparing paid caregiving jobs with stay at home parenting, two very different things from an economic perspective.

I’ve criticized the idea of putting a dollar value on unpaid household work before.  It’s tempting to try and monetize the chores we do around the house, cooking dinner, taking care of a baby, or helping with homework, but the reality is that a certain amount of this work is a regular part of our non-working lives, male or female.  Furthermore, as Harvard economics professor Claudia Goldin puts it, “Much of what we do with our children is not work — it’s love, education and the instilling of values. It is often not something you could ever farm out to anybody.”

When we try to put a dollar value on the work stay at home parents do, we also ignore the opportunity cost of their not working.  Hearing estimated values of stay at home mothers’ work like $122,732 (the number Salary.com suggests) may make some parents feel good about their decisions, but such estimates mask the reality that, over the long-term, mothers who are out of the workforce lose significant earning power.  Since the “salary” they earn during their stay at home years isn’t in cash, doesn’t come with benefits, and doesn’t enhance skills or build a resume, it can’t compare to an actual $123,000.

Even more to the point, most families who don’t have a stay at home parent aren’t spending $123,000 on childcare and household expenses, so the “savings” doesn’t amount to nearly the estimated value.  You don’t bank anywhere near that amount of money by staying home, but you are likely to lose at least that much in lost wages and benefits over time.

Despite my problems with the article, it rightly identifies an important issue: childcare costs seem astronomical to most families, and yet pay for caregivers is pathetically low.  It’s an irony that parents especially struggle with at this time of year, when figuring out bonuses, vacation time, and thinking about renewing contracts with their caregivers.  Intellectually we know that our babysitters make very little money, and get even fewer benefits.  And yet, for many of us, paying more would be a tremendous burden.

That’s part of the reason we switched our son from a full-time nanny to a high-quality daycare center a few years ago.  Don’t get me wrong — it wasn’t cheaper — in fact the costs of daycare were neck in neck with one on one care.  But in addition to the social benefits of a group setting, I knew that my childcare dollars were paying for appropriate salaries, healthcare, pensions, vacation time, and sick days for the caregivers.  By pooling our resources, our group of parents could stretch our dollars, ensuring that our childcare workers were adequately compensated.

Aside from making life easier for working parents, policies creating high-quality daycare programs would improve the lives of many caregivers by offering workers fair compensation, training, and more formal employment structure.  While this wouldn’t help everybody, particularly not those who are here illegally, an increase in the number of top-notch daycare facilities would surely raise the mean caregiver salary from the shockingly low $18,350.

Finally, I’m not convinced that caregiver salaries are low simply because caregiving has traditionally been “women’s work.”  Sexism is part of the equation, but caregiving has also been part of the “unskilled” labor pool.  (Of course, great caregivers have “skills,” but they are not the kind that are easily expressed in the job market.)  Professions that require education tend to be higher paid, those that don’t are less well compensated.  The question is whether moving caregiving to a more professional level — one that might require some kind of standard certification — is desirable.  It would likely raise the mean salary, but limit the number of people who could become caregivers.

If I had my druthers, economists would give up on trying to find a value for household work, and start looking at how we can implement policies and business practices that ensure caregivers receive fair pay and basic benefits without seriously burdening parents.  That would be Nobel-worthy.

Related links:

• MP Dunleavy at MSN Money on “7 Ways to Combat Crazy Child-care Costs.”
• This year, in honor of Equal Pay Day, Jon Henner at Salon.com collected stories of how equal and unequal pay have impacted people’s lives.  Read them here.
• An interesting set of statistics on childcare workers from the US Bureau of Labor Statistics.
• Equal Rights Advocates encourages workers to “know their rights” with this helpful list.