Reply to Why is nanny fee so high?

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Reply to "Why is nanny fee so high?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]You are looking at it from the child care worker perspective, but the price and the compensation are set from the consumer perspective and the business model.

Product 1: nanny 1:1 care in your home with a developing relationship, plus some home extras. One employer, one employee, no overhead. Most expensive product, all profit to one person.

Product 2: nanny share 1:2-4 care in your home with same extra benefits to at least one of the clients. Two employers splitting the slightly less expensive per person cost; all profit to one person with no overhead.

Product 3: your child is one of many with multiple care givers in a center. Least expensive for client; lots of overhead, most profit to center who pays the employee the lowest possible rate they can get away with; highest profit model to center comes from more clients and fewer workers (which is why it is regulated).

The price is set by the product.  In models 1 and 2 all the profit goes to one person with no overhead, while in model 3 it goes to a center that pays overhead and itself before the employees get a cut, which is their salary and benefits. There are more customers paying in (albeit smaller amounts), but more entities being paid from the same profit pot.[/quote]

With current regulations/ratios and rent in cities like DC or San Francisco, daycare centers actually make razor thin margins. A huge chunk of their operating expenses go to rent and another huge chunk goes to insurance in most cases.[/quote]

Exactly the point; this is a big part of why the child care workers are paid less than the private in-home nanny.[/quote]

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