#3: Seeing my home as a small company
Good Morning,
As you may have seen on social media, last Wednesday, an ad posted by a single-mom CEO looking for a nanny went viral. It provoked a lot of noise, dramatic judgment and humor, but I was glad to see at least one analysis of the post that I found valuable in Quartz’s piece: A 54-point job ad for a household manager is a case study in invisible labor.
A quick summary of reactions:
Because it doesn’t seem likely that one person could conceivably be everything that the CEO is asking for, some see in the posting a portrait of wealth and privilege, and specifically the type that makes American coastal elites appear oblivious to their own self-absorption. For others, it’s a sad statement about the outsourcing of familiar duties, particularly a mother’s role.
But the point I found most interesting was this:
And yet, to others who have come across the ad in their timelines, it doesn’t look particularly ridiculous. In this camp, there are those who argue that the exactitude on display is perhaps comic or unrealistic, but ultimately pragmatic. “If you have a big household with multiple kids and a staff, then isn’t being the household manager basically like running a little company?” Quartz’s managing editor Kira Bindrim wrote in a group chat about the ad. “Isn’t this CEO just giving an extremely accurate portrait of that reality, in such a way that is kind of obnoxious but also tells you a great deal about this family and its values? (They do outdoor things! Kids shouldn’t be left alone to do their homework solo! Healthy eating is important! vacations should be planned to make everyone happy!) and isn’t that info quite helpful in deciding whether this is the kind of Household Inc. you’d want to run?”
The whole thing reminded me of the work of Dr. Shoshana Grossbard at San Diego State University, who focuses on the economics of the family and edits a journal on the economic behavior and decision-making processes of single and multi-person households. I spoke to her a couple of years ago and have read bits of her work since then.
A key question that New Home Economics (a school of household economics developed by her predecessors in the 1960s) asks, is whether there is an opportunity cost to marriage and what the implications are for labor force participation. NHE basically made the case that we ought to view households as decision-making firms where there is household production and analyze them using the same tools economists use to analyze business firms.
Grossbard built on this idea and further modeled how individual members of the firm make decisions. Here’s a short summary of her concept called WIHO:
The concept of Work-in-Household (WIHO) facilitates the application of labor market analysis to marital firms… WIHO is defined as a service that is of benefit to one spouse (for example, the wife) but involves an opportunity cost on the part of the spouse supplying the service (for example, the husband). Demand for WIHO is similar to the demand for labor. The more productive the WIHO-worker and the more valuable the product of WIHO to the (potential) beneficiary, the higher the demand. Supply of WIHO is similar to the supply of other types of labor: it is upward-sloping and shifts as a function of the characteristics of both worker and ‘job’ (which includes characteristics of the spouse or potential spouse). Marriage markets are markets for WIHO in which demand and supply interact. There are multiple marriage markets for various types of WIHO workers differentiated by education, ethnicity, age, etc.
There are many implications for this model, but here’s one interesting example (which you can hear fleshed out on the Economic Rockstar podcast):
Dry cleaners charge more for women’s blouses than for men’s shirts, even though they are the same product. This is because dry cleaners know that women have a greater need to use their service (and pay more to do so) as no one else can provide the service for them. Men, on the other hand, may be charged less because the service is available to them elsewhere: through their wives. Grossbard says:
The WIHO or Work in Household is higher for these women as they have, in the majority of cases, taken on the responsibility of running the household chores.
The women who arrive at a dry cleaners are those who have a low WIHO perhaps due to a working career or an unwillingness to take on the responsibility of such chores or even due to the lack of people willing to do the work, such as a spouse.
The whole framework is really fascinating to think through and I’m just beginning to understand it.
On a personal note, I do like to view my home as a small company whose mission is to generate social value and I think framing it in this way can help guide us to make decisions on things like how much the home should cost, how we spend our time in the home, and how we divide and measure our household production costs. I’ll write more about this in future letters.
Some other interesting links I’ve saved this past week:
The NYT did a series on people who have quit things and it’s fun to see what their reasoning was.
Creative Mornings & Harvest are doing an interview series called Time Well Spent, in which they interview creative leaders about how they have managed their time.
This primer on tax evasion was really interesting because I’ve privately noticed as I’ve gotten older and floated in and out of different tax brackets how badly people want to hold onto their money when they have more of it. I’d really like some help to understand why this is the case and what we can do to intervene in the moments just before one encounters wealth.
I really appreciated this twitter thread from Jeneen Interlandi sharing her background and checking her privilege to be on the NYT Editorial Board.
I mentioned in the last letter how it’s women in their 50’s who disproportionately take on the care of elders. This piece in The Atlantic (and Ada Calhoun’s new book) unpacks that a lot more.
And I’ve just started listening to the new podcast Business Dad (hosted by the co-founder of Reddit) and will likely write a reaction to it soon because wow, is it filled with refreshing and alarming perspectives.
If you’ve read or listened to anything related to these ideas, always happy for recommendations :)
Jihii
If you’re reading this online and not a subscriber yet, sign-up is here: