Income Inequality and the Servant Boom

Inequality is likely to drive increased jobs in the service sector as appears to be the case in London:

The number of domestic servants is booming across central London: wherever the multiple between the wages of the rich and the poor grows, so does the number of servants. Much of the time, the towering Georgian and Victorian terraced houses of Belgravia now have only servants living in them – their masters and mistresses are drifting around the world, from yacht to schloss to Park Avenue apartment, in search of pleasure or tax avoidance. Drive round the area at night, and it’s often only the lights in the attics and the basements – the servants’ quarters – that are on.

But it’s not just in the gilt-edged parts of Britain that the service industry is flourishing. According to the Work Foundation, there are now more than two million part-time or full-time domestic workers across the country. All told, 10 per cent of households now employ some sort of domestic help.

The Economist concurs:

According to Britain’s Office for National Statistics (ONS), household expenditure on domestic service hit a low point in 1978, since when it has quadrupled in real terms. It estimates there are as many domestic workers in London now as in Victorian times.

The idea of working as a personal servant strikes many people as distasteful. Indeed, there is much to be said for working for a faceless corporation or for selling directly to the impersonal market. Many jobs in the personal service sector, however, do offer significant autonomy and room for creativity–for example, personal chefs, gardeners, high-end nannies, pilots, publicists and tutors. Service workers today are also less likely to be tied to a single employer, either a ready market is available to switch employers or they are already selling to a range of customers. Compared to jobs in manufacturing and in impersonal service, personal service jobs are also likely to be more immune to competition from the robots.

Hat tip: Tim Harford.


A radical simplification of the American employment laws for domestic employment of say three or fewer workers with just a couple of features would do a lot to encourage employment here:
1) A single regulatory authority
2) A single precalculated employer tax bill or perhaps a one page online form
3) Minimal record keeping requirements beyond weeks worked and average hours per week.

The current law is quite complex and offers no safe harbor from honest errors, leading to fairly expensive outsourced compliance.

My cousin and her now-husband worked as servants for a wealthy British family a few years back on their OE in the UK, collected quite a few funny stories. It wasn't either of their dream jobs, but a lot better than most OE jobs.


Apparently a New Zealandism:

Thank you.

Yep - sorry!

There *is* this weird sentiment that submissiveness to an identified person is distasteful, yet market submissiveness is no problem. It's not clear where this bias comes from though school experiences no doubt contribute.

As Scott Alexander noted - in the context of women's employment but it's really more generalizable:

"Suppose you had the following two options:

1. A job working from home, where you are your own boss. The job description is “spending as much or as little time as you want with your own children and helping them grow and adjust to the adult world.”...

2. A job in the office, where you do have a boss, and she wants you to get her the Atkins report “by yesterday” or she is going to throw your sorry ass out on the street where it belongs, and there better not be any complaints about it this time.

Now assume that suddenly a bunch of people come along saying that actually, only losers pick Job 1 and surely you’re not a loser, are you?...Is it so hard to imagine that a lot of women would be less happy under this new scenario?"

I note that most people would consider the housewife more submissive than the woman doing market work, regardless of the actual content of their jobs.

What's your point? That there aren't enough housewives?

I hesitate to speak for Athelron, but I suggest his point is that staying at home looking after kids is portrayed or understood as being less respectable than pushing a pen in an office.

In a market-facing job, it is easy for manager and managed to point to a faceless unknown as the reason for demands. This provides an arbiter of what's needed and a component of fairness, plus a common enemy. For instance, it is an easy story that "Atkins" is being unreasonable and that's the cause of the manager's intransigence, not that she's just a btch.

For the personal-service job, you're simply catering to the whims of another, presumably your equal except for the money the employer (undeservedly?) has. No component of fairness or shared enemy.

For both jobs, you get a paycheck at the end that states your value. "I put up with all that BS for $40/hr, I'm okay with that." "I am -worth- $40/hr."

For the housewife job, there is no clear market signal of one's value. S/he works hard all day and the paycheck is: $0. "I am worth $0." Sure there is the value of spending time with one's kids, but if you have ever spent ten hours straight with a crew under five, you know that sure doesn't seem valuable at the time.

Plus, one senses the opportunity cost as a loss: "I used to make $40/hr now I make $0, I am a loser." Money saved in not hiring childcare or other services is harder to see.

Disclosure: my wife is a full time stay at home mom of three after a decade of making around $80k/yr. I have worked my butt off trying to find ways to "justify" it and make her feel good about the situation - handing her Gary Becker essays didn't have the effect I desired.

I made a lot of hay out of some recent articles that valued mom's services at about $120k/yr.

I have also done the math, and her break-even to go to work, with childcare, taxes, commuting cost etc is about $55k. !!! Which isn't unrealistic for a professional with a 5-year resume gap in a small college town.

How about the non-quantifiable issue of a professional, college-educated woman moving down to a servant position that any un-educated, non-professional woman could perform?

I am a young professional man with a young professional girlfriend, and we both earn decently for our age brackets (under 25). If we ever got married and started a family, I don't see how I could be the one to ask her to give up her career (supposing I was making more than her).

I agree that one could say social welfare was maximized if two professional parents work outside the home while hiring childcare / nannies. This allows greater specialization of all parties and more value created. Several of my friends have two working parents and a nanny. Their hiring the nanny provides income for another family.

(Nannies are not just for the rich. Surprisingly, the breakeven for nanny vs. day care is between two and three kids - nannies are a fixed cost and day care is variable per child.)

I never expected that my wife would stay home. Not only is she a professional she is also extroverted and gets a lot of energy from interaction with coworkers that is difficult to replace. However, she worked in financial services and was laid off days after our first child was born in February 2009. She made some effort to find a job but, hell, it was The Great Recession and she was a midlevel employee in arguably the hardest hit industry. Meanwhile I am fortunate to earn enough to support us in a reasonable lifestyle - the big cutbacks are travel, dining out and expensive hobbies, all of which are hard to sustain with young children anyway.

I have been amazed at how well she has adapted. She's been able to replace a lot of the social component by organizing play dates and the like to hang out with other parents. And she gets satisfaction from being the primary caregiver to our young children, especially when our friends with nannies reveal how out of touch they are with their kids, or the kids cry for the nanny at night instead of the mom.

I would not have predicted it, especially when we were under 25 (we're now both late 30s).

Ouch! My wife and I used nannies too, while we were both out working/studying. But not to the point the kids would call the nanny rather than one of us during the night.

That would freak me out...

See if she changes her mind after she gets pregnant/has children. I'm not saying she will, but it's probably 1/3 likely on the low end. If she doesn't, hire a nanny.

In other words what Consider This said.

I used to think this way, so I am deeply sympathetic. But I was wrongeddy wrong wrong wrong. My top-tier schooled high-achieving professional wife stays at home now, and we are both much happier for it.

> any un-educated, non-professional woman could perform?

First of all, this statement is wrong. If you think there is no return to having the mom/household manager be smart, experienced, worldly, articulate, or any of the other professional attributes, well, nothing could be further from the truth. Think about the difference between the best teacher you ever had and the worst teacher you ever had, and then think that the mom is with the kids far more than any teacher ever will be. As an aside, my household now runs like a Swiss watch.

> I don’t see how I could be the one to ask her to give up her career

Second of all, unless she's making $500k plus, careers are over-rated. Nothing you do for $200k a year is that important or that satisfying. You might trick yourself into thinking that for a while, because it's hammered into you in school, but it's just not true. It might be fun, but lots of things are fun.

> (supposing I was making more than her).

When she stays at home, you get her productivity pre-tax, which is a huge win, and makes up for a lot of difference in comparative advantage.

Further, when you start to talk seriously about her staying at home (and not you), she will appreciate you more as a husband and man and your marriage will improve. You don't think this now, and maybe even she doesn't think it (although she'll probably start to change before you do), but you've been tricked. Working 60 hours a week to make VP at the accounting firm just isn't better, no matter how much she got praised for progressing in that direction over the past 25 years, and no matter how much inclinations towards family and happiness were beat down upon.

Finally, the idea that the life of a housewife is less interesting or that she'll be hanging out with ninnies is just wrong. My wife's social circle has gone up in sophistication since she dropped out. It seems like every peer with four kids is a former private equity slave or academic. Keep in mind you have some ability to choose your social circle.

From experience, I agree with these points completely.

I also note that a SAHM is a new luxury good - my more affluent friends are the ones who can "afford" to have mom stay home, while my less successful friends are two-worker households. In some circles I am afraid to talk too much about my wife staying home for overly flouting my wealth - pulling up to the high school reunion in a new Jaguar or whatever and parking among the Tauruses and Camrys.

Chris S, I appreciated your points as well.

I can't get over the feeling of having been mislead. I sincerely thought my wife would become less attractive to me, and in fact the opposite has occurred. I think something similar has happened to her, though she was more open to the idea in the first place.

I just realized that after living in a relatively high status upper-middle class neighborhood for a while, I've grown to assume that everyone with children requiring supervision wants to avoid childcare outside the home, and those that use daycare simply can't afford not to.

The preferences seem to be ordered:

Stay at home parent who is active in community + nanny
Stay at home parent
Offsite daycare

There's a common intermediate step between SAHM+Nanny and SAHM called a "mother's helper," who is typically a teen girl and not quite a full-time nanny, but who puts in significant hours helping the housewife. You often see these in larger wealthy families where they help while the mom is physically present. They might, for example, go to the pool with the family and help the older kids while mom attends to the baby.

The big advantage of the nanny is that they drive. The disadvantage is they're the type of person who nannys as a full-time job, whereas the neighborhood teen is probably a future professional. (This is probably minor, but it's hard to get a reliable nanny.)

"a professional, college-educated woman moving down to a servant position that any un-educated, non-professional woman could perform?"

A noblewoman, abandoning her station to become a commoner? Perish the thought!

Hate to spoil the self-conception of so many smug assholes, but 90% of the jobs "professional, college-educated womyn" perform could be done by any human with a triple digit IQ or even an exceptionally well-trained chimpanzee. And how many of these jobs are ZMP or NMP, and either created, mandated, or funded by the government? If you guessed "the vast majority" then you are correct.

The whole concept of "professional, college educated woman" is mostly a government mandate that rich mens' wives be provided with lavish sinecures so they can feel higher-status than less rich men. It's probably the single greatest contributor to "income inequality". And in turn it's led many men into these worthless paper pushing desk jockey positions where they collect salaries while producing nothing of value. And for everyone involved it's justified because they're "college-educated professionals" unlike those men and women who get their hands dirty actually making things and keeping things working.

I guess you've never heard of the military or prisons if you think only women get unproductive jobs for the government.

Private-sector meteorological consulting, but don't let the facts get in the way of your rant.

lol, sure, that sounds like a real job

Thank you.

The gals I know with the PhDs or other assorted letters after their names who are raising well adjusted children in a country of psychopaths in the making have not "moved down."

It's not a ladder. Obviously.

What's the opportunity cost of having a Nanny with an IQ of 90 spend more time with your children than your 110 IQ wife?

I'm just making up the numbers to make the point, but certainly your average college educated, professional career woman is smarter than your average nanny. There's an opportunity cost that is rarely mentioned, but it certainly exists.

About nil, in terms of the relative IQs. Adoptive studies indicate that parenting behaviours have very little impact on children's eventual outcomes, leaving aside such extremes as serious abuse (and there are plenty of high-IQ people who are abusive, and low-IQ people who are very loving) or raising kids during a famine or in a war zone.

Obviously other opportunity costs may be significant.

About nil, in terms of the relative IQs.

Nil? So, a child's IQ is solely determined by genetics, assuming constant nutrition and housing?

> So, a child’s IQ is solely determined by genetics, assuming constant nutrition and housing?

No, there is a substantial non-genetic component (20-50% is the typical range for estimates), but almost none of that is attributable to parenting.

The smart mom is not making your children smarter once she's done with the genetic transfer, assuming she feeds them and doesn't beat them. She may still be giving them a better childhood, and she's certainly building a relationship with them that will carry into adulthood, but she's not raising their IQ. This is one argument for SAHMs that doesn't work.

As Finch says, it seems very unlikely that IQ is only genetic, I understand that there's evidence of a substantial non-genetic impact. Apart from genetics, nutrition, and housing, there are numerous other things that can affect IQ. For example, getting a brain injury from a car crash could have long-term effects on IQ, depending on age at injury and luck. Lead poisoning is known to have long-term impacts on IQ. Many children are highly influenced by their peer group, as you can generally hear in immigrants' children's lack of an accent, that may well affect IQs too, though I don't know of research on this impact specifically on IQ.
And personally I'm doubtful that inconstant nutrition by itself would have much of an impact on IQ, leaving aside the extremes of famine. Though I'm not a nutritionist, just from what I read the body seems to have lots of built-in checks.

Look at it from an evolutionary point of view. A child gets their genes from their parents, obviously. Over multiple trials, what sort of child is going to be more likely to survive to have more children, one who also has to learn their behaviours from their parents, or one who can learn from anyone useful in their environment? If you learn only from your parents, and you get bad parents, you're shafted two ways, by your genes, and by your learning. If you learn more generally and are not dependent on your parents, you might be able to escape your bad parents' effects.

For what it's worth, I've wondered about how far this goes, especially with more intensive parenting. When all the Tiger-mom stuff was making the rounds, it was pointed out that twin and adoption studies were pretty good at dispensing with the idea that normal parenting mattered to any great degree, but probably the extremes of good parenting weren't so well explored.

Imagine the mom is a smart basketball coach. She works with her kid. She gets him in the right camps, on the right teams, she nurtures his interest, she supports his having time and equipment to train. She keeps him doing his homework so school never becomes a distraction. She does a good job of it and doesn't mess up his head.

Nothing she does is going to make him taller. But it's going to make him a better basketball player, right? Perhaps at the expense of other things, but skills can be taught even if basic physical attributes like height and IQ can't. Right?

Don't have children.

Yes, this is really dumb.

An even dumber thing is that prostitution is often considered somehow more demeaning than traditional employment, despite the fact that an independent prostitute earns much more than most corporate employees, can set her own hours, rates, services, and can probably most of the time either lead the interaction or be led by someone actually competent (at having sex).

(was supposed to be a top comment)

Plus, prostitution is a job that "offer(s) significant autonomy and room for creativity" like gardening or being a nanny.

Are you being facetious or trying to make a parallel between prostitution, employment and being hired-help? If not, would you support your mum/sister/wife/daughter turning tricks?

I mean, don't get me wrong, I am for the legalisation of prostitution. But I won't pretend that it's a job like any other. Morals are what they are and it's a bit silly not to acknowledge them.

Prostitution is prohibited to constrain the supply of sex and increase the dependency of a man on his wife - presumably in a weakened position staying home taking care of kids and losing economic resources.

The reaction to personal service not so much distaste, but fear of power concentration in the hands of a single buyer of labour, especially in weakly-regulated sectors.

Indeed, the same critique is true of housewives.

Maybe it's the social circles I move in, but i have never run across someone who believes that housewives are submissive because they're housewives. The closest I can think of is defence lawyers trying to get their client off.

And there's a lot of old-fashioned jokes about henpecked husbands.

but i have never run across someone who believes that housewives are submissive because they’re housewives.

Me neither. Is it some kind of feminist trope?

You hear all manner of housewife hate in some (typically young, liberal) circles. The Stepford Wife cliche involves submissiveness.

How do I know I'm not henpecked? Because my wife tells me I'm not.

Although, as any stay-at-home parent can tell you, the ability to spend 'as much or as little time as you want' with your kids is a truly laughable assertion about parenting. Unless you're wealthy enough to hire one of the domestic servants discussed here. you're on call 24/7. Usually this is awesome, but every now and again it's nice to have an uninterrupted hour to rally your thoughts.

Human chairs, like when Paula Abdul comes to visit Bruno's house.

According to Britain’s Office for National Statistics (ONS), household expenditure on domestic service hit a low point in 1978, since when it has quadrupled in real terms.

Reasonable to think at least some of this is not just inequality, but also an increase in the percentage of women working outside the home, I would guess. "Household expenditure on domestic service" presumably includes expenditures other than just full time live in help.

Anothing thing that might make the new wave of servants better of than their predecessors is culture. Sri Lankan's of my grandparents generation (and probably later) thought it was OK physically hit servants who somehow slipped up. I am guessing that doesn't work to well in contemporary England.

In India hiring domestic workers is a common even among lower middle class families. Unlike in the west, they work part time often in different homes. Several ladies ( usually they are women) told me that they prefer this work to a factory with a higher pay because a) domestic work ( washing clothes and dishes, and cleaning the floor) is less arduous, b) need not travel long distances for the place of work , c) lesser regimentation at work place, can come even 30 minutes late without any disciplinary action, and d) many employers extend interest free loans and, in a few cases, write them off.
I even know some fortunate domestic workers whose employers paid for the tuition and books for the engineering and medical education of their kids because of which the kids are earning well. Something a factory employer does not do nor does the pay permit.

I think "there is much to be said for working for a faceless corporation or for selling directly to the impersonal market" was written with an ironic raised eyebrow. Much of low-paid service industry work consists of outsourced versions of traditional servant employment: making coffee, cleaning cars, washing clothes, childcare, etc etc. Once upon a time, a lot of these tasks (or their equivalents) would have been carried out within the household, by family or servants, even in relatively modest middle-class establishments. There is something to be said for making coffee for someone you know and respect rather a distracted stranger in a rush who would be as happy with a vending machine. More so in the case of childcare.

Or, god forbid, you could make your own damn coffee. Much of the 'outsourcing' consumption seems to be psychological laziness, people who would rather pay $10 and wait 5 minutes for someone else to do something rather than spend 10 cents and one minute doing it themselves.

That "you" was not intended to be directed at the author of the prior comment, which I completely agree with by the way. It was the generic "you".

Thanks Mike. I agree with you too. I make my own coffee and my wife's - and I've even been known to make my own sandwiches.

Downton Abbey returns for yet another season.

Well, there is a difference between exposing yourself to one person's every whim as opposed to working against the market which is an aggregate. Or within a larger organisation where you are valued as a contributor and thus your boss will not treat you badly because he doesn't want to lose you.

I used to work on a private yacht and was very happy to be a specialist and not one of the regular staff who sometimes had to stand around for hours and were expected to constantly pick up towels, magazines, glasses, left-over food etc. wherever the owner's wife fancied to drop them. It often felt that the staff was there to allow our guests to act on any residual sadism they harbored (like 'helping' to clean the plate by dropping the crumbs on the deck).

I wouldn't say the jobs are distasteful but they require you to more or less relinquish your own privacy and most employers value submissiveness. I would not want any of my children to work in this field. It sucks.

Overall, +1

Yes, sometimes, bosses suck and sometimes private employers are nice. But, on balance, I think it's easier to find abusive private employers than bosses. Bosses, to some degree, are constrained by the chain of command and HR. Yes, nowadays, they have a lot more leeway than in the 60s or 70s. Though, for sexual harassment, less so.

No such limits on what a private employer can do...

Sounds a lot like when I was working at Taco Bell as a teenager so many decades ago. Going around picking up after people too spoiled to pick up after themselves, not seeing you as a person, etc. You certainly got a lot of people who thought it was funny to step on a sauce packet and watch it explode all over the floor.

I wouldn't want my children to work either of those jobs. What I wouldn't mind so much, though, is if they were private contractors working to clean houses or cook meals, etc. People treat you differently, and it looks different on the resume, if you are running your own business rather than just hired in at minimum wage. And if you are excellent at what you do, you have more flexibility to set your own terms (not that an excellent servant couldn't move on, but it looks better if I drop a client than if I leave an employer, no?).

I think this is the American way of getting around it all. Not perfect, but better.

Can we please now have Guaranteed Income and Choose Your Boss? We'll know exactly how many want to be servants! The pay bump will be real, we can actually find out...

The revealed preferences of open borders advocates.

How is a 'service worker not tied to a single employer' meaningfully different than, say, a plumber, electrician, painter, lawn service company or other contractor that you might hire to work in your home? And why is this about income inequality rather than just specialization and division of labor? After all, it's not exactly unusual for people in some of these trades to earn more than their customers.

"personal service jobs are also likely to be more immune to competition from the robots"

Historically this was not what happened: most of them got swept away by home robots. We just call those robots "domestic appliances".

(If we did not have roomba + dishwasher + washing machine + Nespresso machine, we'd probably pay someone to clean our house).


I recently did away with that thieving rascal of a butler, whom I employed to stoke the fires in the many hearths of Finch Manor, replacing him with a newfangled robotic gadget called "the Thermo-Stat."

More evidence that progress is an illusion and we are returning to the past.

I will not call it progress until I can do away with my fans and replace them with a Punka-wallah.

Cheer up, dirk. For a Kenyan, $220/mo. is good money.

It isn't limited to London: surely the number of domestic servants has also increased in New York City over the past thirty years. I don't know about the rest of the country. This trend might not be evident to college professors, who tend (i) not to be in the 1 percent, or even the 5 percent, and (ii) to have a lot of leisure, so there is less incentive to hire outside labor in order to economize on time.

How is the London market for concierge medical services?

I believe you are all missing the point with the overt distaste for these types of jobs. It has nothing to do with the specific employer and much more to do with the overall result at a macro level.

If one becomes an employee in the servant sector, the possibilities for career growth and income growth are severely restricted. Even if someone becomes a servant early in life and then moves on to other careers, the skills gap will often have a distinct negative result on projected lifetime earnings.

The result is that the servant is locked into the lower income brackets outside of "marrying up", and the income inequality gap continues. It locks you into this cycle of being significantly below the income levels of the top earners.

The distaste is directly from that. The perceived American ideal is that everyone has an opportunity to make it (monetarily), and a career in professional servitude virtually guarantees that you must define success by some other metric or else be deemed unsuccessful at improving your position.

Not necessarily.

(A) What is the advantage of being employed washing dishes in a restaurant over washing dishes in someone's house? The possibilities for career growth and income growth are not great in either scenario. Perhaps you could progress to being a top chef in a restaurant. But equally you could progress to being a butler and earn $138,870 plus free board and lodging at some of the nicest houses in the world (see

(B) Marrying up is social mobility too, and a particularly important one now assortative mating dominates middle class life. Would Heidi Klum's boyfriend have had the same social opportunities as a security guard in a shop as he has had being her bodyguard? (See, e.g.,

(A). I think you could set your sights on rising through the ranks and owning and operating the restaurants eventually. That would have a significantly larger potential income than the adjust $138,870 Butler figure cited. I sincerely doubt as a personal servant you have the opportunity to own the house your employers work in. To miss this point seems almost laughable or intentionally obfuscating the intent of my earlier comment.

(B). I fully agree and cited marriage as a method of social mobility. My comment was on how there is perception that the jobs in the servant industry are distasteful. Often times marrying up is seen as a lesser method of social mobility than earning the money by direct means of employment. So climbing the ladder view marriage is not necessarily perceived (right or wrong) as the same thing as raises and earning more disposable income.

I'm not saying jobs are not valuable jobs that have an impact on NGDP in the aggregate. But there is a pretty simple and obvious argument to be made about the potential class impacts associated with the growth in these jobs and the perceptions that come with that. A dishwasher in an entry-level job as you mention is not viewed as a servant, a dishwasher in someones house is. How that keeps being overlooked baffles me.

Not a small step toward a better world, I think.

Books contains a lot of characters that are servants, so this must be good for literature.

I have to wonder how these things are being clumped together. I know in the communities I've been in, which may not be representative, what we're seeing is a huge rise in personal care providers. These are, in essence, servants -- but generally for the elderly or ill so they can stay in their homes. I think most folks who have worked in nursing homes (residential facilities) find the prospect of working for individuals in homes a happier one. Of course, what we're at the foundation replacing here is family, but it's been a long time since the expectation that the young would take care of their own old was universal in the West.

What we need for some people I know is more selling directly to the impersonal market.

I think this is definitely a world wide problem. A lot of Governments seem to create too many public service jobs without too much research as to the demand for them in a certain area. Then when they want to cut costs they slash these without any thought to the huge personal effect on those employed.

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