Why are nannies struggling financially?
On paper, nanny wages seem to be looking up. Hourly rates made a big leap in the pandemic and have remained relatively high – a reflection of increased demand for in-home childcare and a broader recognition of its value.
But beneath those headline numbers, many nannies and babysitters are struggling. Are you feeling it, too? Here’s what’s going on and what you as a nanny can do about it.
A quick check with the Smart Sitting network
We recently sent out a poll to check in with sitters and nannies in the Smart Sitting network, and one thing quickly became clear: even though SmartSitters are making more money than before, times are really tough for a lot of you.
What the numbers say
Despite relatively high hourly rates, a majority of caregivers report that they are not making enough to keep up. While 78% of caregivers in our network are making $30/hour or more (with the majority of those making $35/hr or more), 69% say their income is insufficient.
What we’re seeing is that these strong hourly rates are being outpaced by the cost of living. Most of our caregivers live in metro areas, which have seen a particularly steep increase in cost for housing and other daily spending. For instance, 67% of respondents say they could not cover a $1,000 emergency expense.
Additionally, many caregivers are still paid “off the books”, a common problem in the private childcare industry. Working off the books limits your ability to build credit, access unemployment insurance, or qualify for benefits, creating longer-term financial vulnerability. (Read more about why you should be paid on the books here.)
Why higher pay ≠ financial stability right now
It isn’t just caregivers who are struggling. Times are tough in the general economy.
According to the U.S. Bureau of Labor Statistics, wages have not risen fast enough to consistently outpace inflation in the last few years, particularly in housing, food, and transportation. Meanwhile, data from the Federal Reserve shows that many Americans struggle to cover even modest emergency expenses – a trend clearly reflected in our poll results.
This also means that it might be hard for you to get a raise from your current employer.
Your employer might be struggling too
Just like you, your employer families are most likely also facing rising rent, healthcare costs, and transportation expenses. Childcare costs rival or exceed housing costs in many regions, which puts your family in a difficult position: they want to keep you around and offer you a livable wage, but they just don’t have the money (or at some point it becomes financially smarter for them to have one parent stay at home instead of paying for childcare).
This means your employer might already feel financially maxed out and any potential raise negotiations become emotionally tricky for both parties.
This doesn't mean your financial stress isn’t valid, though. Both things can be true at the same time.
Time for a raise?
It’s hard, and usually not appropriate, for you to ask for frequent raises throughout the year. The baseline expectation is a raise negotiation at the year mark.
However, if you have taken on additional responsibilities, like household management, additional children, tutoring, etc., a compensation conversation is totally justified. Our poll showed that as many as 85% of you are providing unpaid caregiving duties, and while a one-off dog-walk is a generous and kind gesture, any new routines that aren’t in your initial job agreement can and should be part of a pay negotiation.
Additionally, if the cost of living in your area has significantly increased and you’ve had to make adjustments in order to maintain your stellar work style, you might have a shot at bringing it up. Maybe you’re driving to work and gas has gone up by a dollar (the pain at the pump is real!), or maybe your nanny family prizes how close you live to them but rents in the neighborhood have exploded (we’re looking at you, New York).
These times are out of the ordinary, and sometimes that means there’s an opening for an out-of-the-box conversation.
Here’s how to approach a conversation about compensation:
Document your responsibilities and how they’ve evolved
Reference market rates in your area
Be specific about what you’re asking for and why
Make sure it’s a respectful conversation at a time when you can talk properly
Let us help
If you’re already a SmartSitter, or you’re considering joining an agency, you might mostly be focused on the high-paying jobs and trustworthy connections. Which are huge reasons for working with an agency!
But don’t forget, a reputable agency can be so much more than that. Here at Smart Sitting, we’re really picky about who we take in, and that’s partly so we can get to know you and understand who you are before matching you to various jobs. It also makes it possible for us to be there for you when you need us.
We can help you navigate conversations with parents about compensation, help parents understand and set up on-the-books pay, and steer you to appropriate rates for your experience and role. This way you’re not doing it alone. We also continuously work to educate parents on industry standards for rates and benefits so you’re not stuck on the receiving end of their sticker shock.
Are you looking for a new job – and support in your nanny career? Tell us about yourself via the application button below, and we’ll be in touch if we think we can help you get there!
Ps. Hang in there
The short of it is, if you’re feeling a step behind right now, you’re not alone. If you’re having a hard time making ends meet, that worry is real. Financial stress is a primary driver of burnout, that’s not just you feeling it.
Keep working hard and being the best caregiver you can be, be on the lookout for growth opportunities in your role or your field, and join up with an agency that can support you properly. You’ve got this!