Reply to Minimum wage rising and nannies wages

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[quote=Anonymous]This is interesting.  I think the issue is that nannies are employed by families, who presumably only have a certain amount to spend on childcare.  Whereas Costco or Walmart or some other large employee can absorb another few dollars an hour up to a point, there is absolutely an upper limit on what families can pay and also, a number of other options for childcare (grandparents, daycare, au pairs, quitting job themselves).  So as nannies get more expensive, more people will not employee them, either because they can't or because they go to cheaper options.

At $15/hour for a standard 45-hour week, that's $760/week or $39,523 a year with taxes.  It's relatively rare families who can afford even that.  If you put two kids in daycare full-time even at a costly place that's $1,500 a year, that only puts you to $37,000.  So for a couple thousand a year extra, many families are happy to employee a nanny for the convenience of not having to do drop-off/pick-up and for their children to have one-on-one care.

If you're paying a nanny $20/hour, that's $1,014 a week or $52,734 a year.  So you really have to want a nanny over daycare if you're going to be willing to spend an extra $20,000 for the year.

I'm not saying nannies aren't worth more money at all.  I'm just saying that there's an upward limit on what nanny employers are going to be willing and able to pay.[/quote]

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