The Great Rate Debate: What’s the Standard Nanny Rate?

 

What is the standard rate for a nanny? Ask a handful of people and you will get a handful of different answers. The standard is not well defined. The only thing that is certain is that the vast majority are not paid enough.
 
It is a sad reality that childcare providers and teachers (those we rely on to help cultivate our children’s development) are either not earning a living wage or are just barely earning enough to cover their living expenses. There is a lot of finger pointing going on out there. So who is to blame?
 
Some blame the government for turning a blind eye. Others say it is the ‘middleman’- nanny agencies and companies looking to make a buck off the deal. Or are the parents who employ in-home caregivers the culprits? I have often seen nannies comment that other nannies are to blame: they lower the standard of the profession by accepting lower paying positions. So which one is the offender?

 
The answer is everyone and no one. We are all interconnected and all play a part. It is easy to place blame. It is more challenging to understand perspectives of the “players of the game”. Are you up for the challenge? I do hope so. Once we examine what is fueling the fire and why, we may be able to extinguish it or at least minimize the damage it causes.
 
It pains me the most to see nannies pointing fingers at other nannies. This one has got to be the easiest to empathize with, right? It is easy to see why these nannies are taking what they can get. If you are not earning a living wage, there is no way to avoid living paycheck to paycheck. There is no savings account to fall back on when you are in-between jobs and without a paycheck. You do not have the luxury of holding out for ideal wages. Nor do you want to rock the boat by pushing the envelope to risk losing a precious job offer.
 
So on to the parents. They are the employers. It is their responsibility, right? Well, yes. But the average family doesn’t have extra income to pay a higher hourly rate. And there are more and more “average” families hiring nannies. So don’t hire a nanny if you can’t afford one, right? Certainly, there are other more affordable options like in-home daycares. But gone are the days of having a nanny out of luxury. Many average families have to hire a nanny out of necessity, as some are comprised of shift workers like nurses, retail workers, police officers, and blue collar workers. Most daycares do not accommodate care past 5:30pm or 6pm.
 
On to the middlemen– the faceless companies and hundreds of nanny placement agencies. It is definitely easy to point the finger at them. They are the ones in it to make a buck. But if we do not allow them to “make a buck”-we take away the facilitators that connect families and nannies. And who is their client? Who is paying them? The majority of the revenue is coming from parents, which means that to stay in business and please their paying clients, the nanny’s interests often fall to the wayside.
 
Of course, the easiest target of all is the government. They certainly do not give nearly enough attention or funds to improve the situation for childcare providers or the average family. They offer families Dependent Care FSA. But that can only make about a $1500 difference MAX for families (since they cap expenses eligible for reimbursement to $5,000). Seriously, what family that requires childcare doesn’t spend at least four times that amount of childcare per year!?! To be frank, I’m not holding my breath for much relief from them anytime soon.
 
How dismal. Such a complex issue. So what do we do?!?!? I admit, it seems a bit hopeless. I won’t pretend to propose a cure-all solution. But I invite others to get involved in exploring a solution or ways to improve the situation.
 
I will start. There is a way to enable some relief to average families who struggle with the cost of childcare while paying a nanny better than the average family can afford. When two families come together to nanny share, they can save while the nanny earns more. To keep things equal all around, each party involved has a benefit of 33%. This means that the families save 33% while the nanny walks away making 33% more than he or she would working for one family.
 
Nanny sharing can create more higher paying nanny positions. It also gives the nanny a tool to bring to the negotiation table. When the average family offers a nanny a less than ideal wage, the nanny now has a recourse if the employers insists they cannot come up on the rate. The nanny can accept the position on the terms that the family is agreeable to bringing in another family to help increase the nanny’s wages.
 
Important note: To motivate both parties to seek a share family, both parties should compromise between the offered rate and the nanny’s minimum rate.
 
Here is what I mean…let’s say the family says they can only pay $15/hour and the nanny states his or her minimum rate is $20/hour. They settle on splitting the difference and set the single family rate at $17.50 per hour. Of course, the rate compromise isn’t something sustainable to either party, so it creates motivation to search for a share family.
 
Once a share family is found, the nanny will earn higher wages than their minimum, and both families can benefit from this cost-saving strategy that can save them thousands per year.
 
In conclusion, let’s circle back to the intro. Paying minimum wage is law but minimum wage doesn’t mean living wage. Living wage is often higher and should be the minimum childcare providers earn. We should strive to support those who support the development of our children. 
 
I urge nannies to use the living wage calculator as a tool when setting and negotiating their rate. I urge parents to use the living wage calculator to get an idea of the MINIMUM they should be paying. If you are not able to pay above a living wage rate, be open to other options or to exploring ways in which you can enable your nanny to receive higher wages.