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I seriously looked into opening a daycare center a couple years ago because my area was obviously chronically underserved, and found that workforce was in fact the main bottleneck. Finding people to do that sort of job for less than $35/hr is apparently impossible. Talked to a couple people who have made it work and they said the secret was to hire friends or people from church.
In-home daycares are also unbelievably scarce despite the much lower (still ridiculous) barrier to entry.
Nannies are likewise at least $30/hr.
People simply don't want to do the work.
No they're not lol. That might be what an agency charges but the girl's getting paid $15-$20.
And why do you need an agency that employs the girl? Regulations.
Because the girl wanting to nanny and family looking for one have to be connected somehow, and the family is going to want someone who did background checks and stuff for them. Yes, technically it’s overhead on the transaction, but the transaction wouldn’t happen in the first place if it wasn’t for them.
Background checks are not so expensive as to require an agency to actually employ the nanny. A broker model with a one time fee for placement would make much more sense for the connection problem. But having an employee brings you under myriad regulations, and that's why people pay an agency instead.
I hate to break it to you but teenage girls are not very good at money maxing and looking out for number one, and people who can afford a nanny don’t care.
Now you're telling me there's just a $10-$15 per hour market inefficiency that no one cares to exploit? No, I'm not buying that one.
In practice, the way to exploit that inefficiency is to decide on a nanny from an agency that you like, and offer her a small raise to work for you independently.
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Obviously it varies by area, but a while ago I read (might have been in Reason) that in-home daycares have to comply with a huge laundry list of expensive-to-follow health and safety regulations; one that stuck in my mind was that the house had to have a circular driveway to minimize the danger of cars backing up - a measure which would leave most neighborhoods bereft of daycare facilities.
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thanks for this post, it's fascinating to get this kind of specifics from someone who really looked into the business.
There really seems to be this giant, gaping void in society now where we are lacking women in traditional roles, and the market just can't keep up.
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That's honestly fascinating, considering that matches nearly exactly the average salary for women with a default college degree. I think the market correction that happened to low-skill labor in 2020 was actually just ripping the band-aid off something that the Western world has to come to terms with, which is that most white-collar work actually just ain't that objectively valuable (and never really was), and the market is starting to reflect that. Hell, immigrating to the US and having only that job available is a raise over my current (exchange-rate-adjusted) wage in a high-skill technical profession at home.
Those rates are obviously going to be higher to the customer, so... who's buying this service and expecting to come out ahead? Is it the average middle-class woman who would rather spend 100% (or at least an overwhelming majority fraction) of her take-home pay to have another woman raise her child, is it the people who are making 200,000 dollars doing who knows what, or something else entirely?
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