The Nanny Economy

Ironic that Elon is concerned about the demographic crisis

I don’t know if you’ve ever gone on a walk in San Francisco (or any large city for that matter) on a weekday afternoon. I’m newly unemployed (not really unemployed; it’s kind of complicated).

It’s far different than going out on a weekend because everyone who is out on a weekday afternoon– is living a different life. Most of the American population has to be at work from 9-5. Remote workers presumably have to be at their desks from 9-5. The homeless and unemployed are roaming the streets, which is expected. But there is one group whose existence has surprised me.

As I stroll through suburban San Francisco I often see women pushing strollers and wearing baby carries. As they come into my field of view, I see the face of a girl who, a vast majority of the time, looks the same age as me (I’m 23). I scratch my head in confusion, three kids at 23?

But then it hits me, they are nannies or Au Pairs. I did some research on Hinge and found that a common occupation for women my age is “Au Pair” or “Nanny”. I’ve also met multiple women who nanny for rich families (I'm not sexist I'm sure male nannies exist but I have only met women nannies pls don't get mad thx). This is completely anecdotal I know, but let’s roll with it.

Reddit has some interesting anecdotes about ultra-wealthy nanny employers. People who nanny for rich families give advice to newcomers into the industry. They rave about how insufferable old money can be, and how the children of wealthy people treat money like “water coming out of the tap”. Here are some interesting quotes from r/Nanny:

“New money is usually ok, old money generational wealth where they have never lived a normal life are usually insufferable.”

“If the salary is enough for you to put up with insufferable people that are totally out of touch and don’t respect what you’re doing or really care about their children all that much then you may be able to make it work.”

It got me thinking a lot about outsourcing the care of your children. I have some thoughts on the topic and what it says about our society and how it’s evolving. I did a tad bit of research, and found out that childcare is expensive to begin with; private nannies seem to be the most expensive version of it.

According to the DOL, childcare can cost between 8.9% and 16.0% of a median US family’s income.

As per a Care.com survey, the median cost of a nanny can be $827 a week.

I think first and foremost the demand for nannies is a leading indicator of the major wealth divide in San Francisco. Most people my age are concerned with the cost of housing, food, and the mounting debt on their student loans.

The fact that a small subset of people exist who can afford to spend up to 6 figures on a caregiver is a shocking contrast from the reality of the average American.

And honestly, the popularity of private nannies is a dystopian reality that should irk the general public more than other services provided to the rich. Like I honestly don’t care if rich people buy fancy clothes, cars, or homes. I believe in free markets and the money that they spend on these goods probably has a net positive impact on the economy.

But when rich people are able to hire caregivers outright, it likely drives up the cost of childcare for the rest of the population by snatching up the limited caregivers. And rising childcare costs disincentivize people from having children to begin with. And that’s how we end up with people like Elon who bark at the public about our demographic crisis, while his kids all probably have access to the best care that money can buy.

Childcare is a complex issue, and I’m not an expert– just a guy with opinions. But I think the high cost of childcare for middle-class families juxtaposed with private nannies for the rich is a kind of dystopian reality. It’s an indicator of a growing divide between the haves and the have-nots.

And this is worse than the yachts, beach houses, or the private jets; because now, you might be priced out of… having a family.

-Raj