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The Productivity Boom We’re Missing

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The Productivity Boom We’re Missing

Leveraging the working capacity of stay-at-home moms would be a big economic win. The Shape of Work to Come 2017
Economy, finance, and budgets

Kristen Whirrett, a former Lutheran school teacher in Fort Wayne, Indiana, always planned to take a career break to focus on motherhood. “When we were still dating, Andy [her husband] and I decided that we wanted one of us to stay home with our children, at least until the youngest was in kindergarten,” she says. That’s what their mothers had done. The couple, both educators, made frugal housing and transportation choices so that, after their first child arrived a few years ago, and then another soon after, Whirrett could leave her position.

Yet for a woman who calls herself a stay-at-home mom (SAHM), Whirrett spends much time working. During her children’s nap-time and on Saturday mornings, when Andy takes the kids, she runs a blog, Joyfully Thriving, which documents her household-management strategies. It brings in revenue from affiliate sales and ads. She produces custom books for events, such as graduations, writing these at night, after the kids are asleep. She teaches piano two afternoons a week, six hours total, while her parents babysit. Then she spends another three hours per week on social-media work for various churches, fitting this work in wherever she can. All told, she estimates, she works 20 hours a week and earns one-quarter to one-third of her previous salary.

“Our budget works on my husband’s income, but it’s very tight,” she explains. “The money I earn allows us to save a bit more, travel in the summer to see our family across the country, and accomplish big house projects.” Recently, they made an extra mortgage payment and sent another check to their retirement fund—“things that we couldn’t do without my various moneymaking endeavors.” She sees similar industry among her circle of friends, several of whom have part-time gigs. “Up to this point, I think you had to choose one or the other. You either stayed home or worked,” she says, describing the dynamic that has long defined the so-called Mommy Wars.

Yet strong evidence suggests that the majority of women who call themselves stay-at-home moms contribute income to their families, and a good proportion work quite a bit. Indeed, surveys find that the majority of SAHMs would like to work in some way. Many do so in cottage ventures like Whirrett’s, and Whirrett has ambitions to grow her blog into a full-time enterprise. But many women wind up doing low-paying activities that don’t fully leverage their economic capacities. Others, seeking part-time, virtual jobs, fall prey to scams. Legitimate employers have been slow to make use of this qualified (and cost-effective) workforce for reasons that involve prejudice on both sides, but this is starting to change, especially as technology transforms the world of work. Together, employers who think more flexibly about work and caregivers who think more strategically about their options can turn lots of unused capacity into mutual benefit—as long as policymakers don’t stand in the way.

Few trends in social science are as clear as women’s entrance into the workforce over the past 60 years. The U.S. labor-force participation rate for women rose from about 37 percent at the beginning of 1957 to about 57 percent now. Close to 70 percent of mothers with children under age 18 participate in the labor force. Some 64.2 percent of women with children under age six work, as do 58.1 percent of women with infants under one year old.

Despite these changes, Americans still have mixed feelings about mothers working for pay. A 2014 Pew Research Center survey found that 60 percent of Americans say that children are better off with a parent at home. That’s the pull factor, but there are push factors, too. Child-care costs have risen at twice the rate of inflation since 2009. If a young family is facing $250 per kid each week in child-care costs, that’s $500 for two kids, or $25,000 a year. Rates for center-based care in large cities can easily top $400 per week, which adds up to $20,000 for one child, or about $40,000 for two.

With the average woman who works full-time earning $744 per week, or a bit under $39,000 a year, there is not much immediate posttax value to be had, and even if a young mother knows that, long-term, her child-care costs will fall and her income will rise, the burdens of being a two-job family are profound. Who stays home with the kids when they’re sick? Who goes to doctor appointments and parent-teacher conferences and lets the plumber in at 10 AM on Tuesday? In most two-parent families, Dad outearns Mom, which means that beyond any question of a mother’s preference to care for her children, the rational economic choice is for her to step out.

This makes sense, but this decision puts many families in an economic bind, one not as broadly understood as it should be. In 2003, the New York Times Magazine ran an enormously influential story called “The Opt-Out Revolution.” Journalist Lisa Belkin profiled women with law degrees and MBAs who had left the workforce to care for their children, in part because their husbands earned enough that they could afford to do so. Such families exist in rarefied pockets of the country, but Pew finds that 49 percent of SAHMs have a high school diploma or less. These women are generally younger than working mothers and more likely to be nonwhite and foreign-born. The men they marry or live with are demographically similar and often hard-pressed to support a family well on their own. The median male income for full-time work has declined since 1973 (in real terms). According to a recent study of SAHMs that I helped design for Redbook, the majority live in families earning less than $75,000 a year. “Families with children really put themselves out to get into a neighborhood that has decent schools,” says Stephanie Coontz, a historian of American family life and a professor at Evergreen State College. “Two earners are going to outbid them all the time.”

In other words, families can’t afford child care, but they also can’t afford to have mothers not work. The solution many decide upon is to have Mom stay at home and work in whatever ways are possible and in whatever hours are available. Of the SAHMs whom Redbook and I surveyed, 62 percent said that they contributed income to their families. According to their time diaries, which recounted the 24 hours preceding the survey, 34 percent listed some form of work, averaging 4.5 hours for those who worked.

The nature of work has changed in ways that make such arrangements more possible. While mothers have always taught piano lessons or watched neighbors’ kids for extra cash, or done direct sales for companies such as Mary Kay, many forms of entrepreneurial ventures can now be done anytime, anywhere. In their time diaries, mothers noted hours spent running Etsy or eBay stores or selling items on Craigslist. They wrote articles or did web or social-media work.

Many women fit this work in however they can. Carrie Willard, a blogger, podcaster, and eBook author, works from 6 AM to 9 AM each day at a coffee shop before home-schooling her seven children. Jamie Weitl, who works as a part-time travel agent and teaches online while caring for her three children, says that “to make this work, there are many mornings when I work from 3 AM until 7 AM, when they get up for the day.”

Anyone willing to wake up at 3 AM to do paid work before a full day of caregiving clearly has the sort of work ethic that employers dream about—but up to now, the talents of stay-at-home mothers have not been fully utilized.

Employers have some legitimate reasons for viewing SAHMs as problematic job candidates. Women who are full-time caregivers for young children often have little time or opportunity to work while chasing their toddlers around, so many mothers seeking employment start doing so only after their children go to school. That means that they have likely been out of the workforce for several years. Employers are understandably wary of long employment gaps on a résumé. “Hiring decisions are among the most fraught emotional decisions that people make at work,” says Tami Forman, who runs a nonprofit called Path Forward, which offers “returnships” to mothers who want to reenter the workforce—short stints at companies, generally with lower pay but lots of training, undertaken with the expectation of a job offer at the end. Both sides get a chance to try before they buy, which can counter some of the hiring bias against caregivers.

Some job boards are starting to specialize in returning mothers; Après, for example, features content and job listings for women who want to “reconnect with your professional self.” These are certainly helpful, though many such initiatives are aimed at women on the high end of the labor market, with professional—or, at least, college—degrees and likely significant work experience prior to their career breaks. If these women face obstacles when they seek employment—and a 2013 New York Times follow-up story, “The Opt-Out Generation Wants Back In,” found that they do—women without such skills and experience clearly will find the going even harder.

According to one Pew survey, about four in ten SAHMs say that their ideal situation would be to work part-time.

But the barriers aren’t just on the employer side. Many mothers want to have control over their work hours and generally limit work to between 9 AM and 3 PM. According to one Pew survey, about four in ten SAHMs say that their ideal situation would be to work part-time. Many also want to work from home—which allows for being available for home-related tasks, or volunteering. When companies do try to employ returning homemakers, through programs such as Forman’s, the general assumption is that these workers just need a little help to get hired—and, once hired, they will work just like other people. This may not be true, however, for mothers of school-aged children. “There is a huge untapped capacity to be found in the many women who would happily work the 20–30 hours a week that their kids are in school,” Forman says. Pew finds that more than 10 million women are at home with their children. If 5 million wanted to work 20 hours per week, that’s 5 billion annual hours of possibility, with much of that time (according to the Redbook time diaries) currently spent on housework, television, or online activities that women would jettison for the right opportunities. “Why businesses can’t find a way to leverage that is beyond me,” Forman says.

Unfortunately, some unsavory sorts have found a way to leverage this capacity. Part-time work-from-home jobs are so desirable that “there are 60–70 scams for every one legitimate work-from-home job,” says Sara Sutton Fell, founder and CEO of FlexJobs, a job board that specializes in flexible positions. Ads for these sorts of scams abound online. One popular con involves “hiring” people to assemble craft kits, toys, or other products. The victim pays for materials and does the assembly but then is told that the work doesn’t meet the company’s standards (no one’s does—the company makes money by selling the kits). Another promises to help people set up a medical-billing practice. The victim pays for software and a list of clients, but the leads tend to be generic (or fake), and the software isn’t something that legitimate medical-billing firms use. Again, the scammer makes money by selling the materials. Some stay-at-home job seekers take positions doing “e-mail processing”—which turns out to be posting spam ads in newsgroups and forums. Legitimate work-from-home jobs are so in demand that FlexJobs’ business model involves charging job hunters for access to screened, vetted listings.

Many mothers who don’t fall for scams still wind up doing low-paying jobs. On MoneySavingMom.com, a site with a large SAHM readership, a reader named Jessica posted about her experience taking surveys to earn extra cash. “I joined Harris Poll Online,” she wrote. “It’s a survey site that does not require anything except for you to register. It finds short surveys based on the profile you create, and they can range from 15 to 300 points. When you sign up they give you 50 points immediately. I have used the site for just about a month and have earned a little over 1250 points, which amounts to a $10 Amazon gift card. Most surveys take less than 15 minutes and can be done on your mobile device. I am a SAHM and always looking for ways to earn money and contribute financially to my family!” She wrote this as a testimonial, but if each 15-minute survey earned her 100 points, that $10 gift card required three hours of work. That comes out to much less than minimum wage.

Then there are direct sales, where recruits ask friends and family to buy makeup or kitchen devices, with the major payoffs going to those who recruit others. Willard notes: “There are so many ways to make money from home or online, but many moms think of direct sales first, even if it’s a horrible fit for their lifestyle and personality.” She attempted this years ago, and “my upline told me over and over that anyone else who had worked as hard as I did at building a customer base would have been successful, but for some reason it was a total flop for me.” She even spent some time afterward writing for a blog that aimed to “educate people on the lies told by the network marketing industry. One of which is that everyone is a salesperson. Not true!” Writing turned out to be a better match. Willard now maintains blogs that generate ad sales and affiliate income, and her eBooks, such as The How (and Wow!) of Habits and The Busy Mom’s Make-Ahead Breakfast Cookbook, generate enough income that she covers several line items in the family budget. “I’m also making significant contributions to our savings—our current goal is a down payment on a home,” she says.

The most entrepreneurial moms, such as Willard, can make a good run of it, but not everyone is a salesperson or an entrepreneur. “There are all these fantasies that you can make all this money working from home, but it doesn’t work out all that often,” says Coontz. Many women who want to participate in the labor force would just like an old-fashioned paycheck from an employer.

Companies that structured some work into the form of part-time virtual jobs, the sort that are attractive to SAHMs, would find several upsides—first, a vastly expanded applicant pool. “You can hire in geographic areas where it might be a lower cost of living,” says Fell from FlexJobs. You can tap a workforce that your competitors are generally ignoring. You’ll get employees who are grateful for work, no small thing in terms of retention and engagement; the Department of Defense’s Military Spouse Employment Partnership, for instance, which encourages companies to hire military spouses (who move frequently) for virtual jobs, specifically mentions the 26 percent unemployment rate among these workers in its employer literature.

Second, “there are some real significant cost savings arguments that can be made,” as Fell says. People are willing to work for less. FlexJobs research has found that of its survey respondents, 22 percent said that they’d take a 10 percent cut in pay to work from home; 7 percent said that they’d take a 20 percent cut. “And they’d be happy about it!” Fell adds. Two part-time people could be paid less than one full-time person, with no danger of hitting the 40-hour mark for either, where new labor laws—currently on hold with an injunction but always a possibility in the future—may require many middle-income workers to be paid overtime rates. To be sure, “as a manager myself, I know that the more people you have to manage, it gets exponentially harder,” says Fell, but other savings could compensate for increased managerial head-count loads. Part-timers generally don’t expect the same benefits as full-timers. Employers could face lower health-care costs and may not need to offer as many vacation days. And virtual work incurs no real-estate costs.

Some companies have developed business models around hiring people (often mothers) into part-time, virtual positions. DVMElite, which builds and operates websites for veterinary practices, is composed almost entirely of part-time, virtual workers. “We had a great pick of people because so few companies do this,” says Sally Van Dyke, a team-builder manager at the company. She estimates that 90 percent of her employees have children of school age or younger. “They do this 20–30 hours a week, but it’s flexible enough that when kids have field trips or something, they can go to it with no problem.” Competition for these spots is fierce, she notes, because “a lot of people want to work from home but they may not have the skills we need.” But thanks to their stringent hiring process, “We’ve never had a problem with people not doing their work.”

Part-time travel agent and online teacher Jamie Weitl sometimes works a 3 AM to 7 AM shift at home before her children wake up. (PHOTO COURTESY OF JAMIE WEITL)

Other companies have gotten into this labor market, including customer-service firm LiveOps, and Rosetta Stone, the educational software firm. One of Rosetta Stone’s member companies, Lexia Learning, hires former educators to work with classrooms implementing the company’s software. Rosetta Stone also hires native speakers of various languages to work online with students. “This work suits a part-time, remote employee very well, as they can dictate their own hours and manage their own schedule as they see fit,” says Brandon McTavish, head of talent acquisition. “We unfortunately don’t always have enough part-time work for all of the good language coaching talent we see, but we do work hard to keep in touch with talented candidates that we would like to hire in the future. It’s not uncommon to remain in contact with a candidate for months before something suitable finally opens up and we can formally offer a role.”

Technology and the “gig economy” also present opportunities for caregivers who want control over their time but may not be able to set up their own fully managed businesses. It’s easy to turn on the Uber or Lyft apps and drive people to the airport while your kids are at school. Younger people, in particular, have expectations of flexibility. “Millennials are coming into the world with such a different idea about time and space because of the way they’re experiencing the world through technology,” says Forman. The idea that a job must be done from nine to five in an office seems like an anachronism.

But it remains a popular anachronism. A few employers, such as Yahoo, have made news by canceling telecommuting arrangements because of the supposed benefits gained by bumping into colleagues in the hallway. Policymakers (and parts of the legal world) have also sought to regulate the emerging virtual, part-time, or on-demand labor force. Such efforts stem from the seemingly progressive idea that all jobs should be good jobs, defined as those offering a family-supporting wage, full-time regular hours, and benefits. This is the impulse behind efforts to raise the minimum wage, with laws passed in California, New York, Seattle, and elsewhere pushing the pay floor to $15 an hour over the next few years. Uber has been fighting lawsuits around the country that contend that drivers should be employees, not independent contractors, with social-insurance contributions made on their behalf and with the requirement that drivers get paid the (rising) minimum wage. President Obama’s Affordable Care Act required many employers to provide health insurance for those working just 30 hours a week, not the 40-hour minimum traditionally considered as full-time.

These well-meaning ideas might seem sensible in the context of traditional workers, but they make employers less likely to take a chance on people with spotty work histories, or those who want to work irregularly, or from home. Requiring benefits for part-time jobs makes such jobs less attractive for employers—even as it becomes clearer that most mothers do want to work in some way, whether out of economic necessity, to bring in extra money, or to extend their identities beyond caregiving. Many just don’t want to work in the way that men traditionally have done—40 hours a week, at regular times, with no long voluntary interruptions.

Meredith Lutz stepped out of the workforce several years ago to care for and home-school her two children. She enjoys spending the majority of her time this way. However, “I only have two kids. There’s downtime,” she says, and eventually she found that “I really wanted to do something where I could make some money, so I could feel like I could buy what I wanted.” Her conditions: flexibility, so that she didn’t have to pay a sitter; and the ability to work from home. Her brother, an entrepreneur, recognized her skills (a college degree and lots of work experience) and began sending administrative and bookkeeping work her way. She now works as a virtual assistant for his companies for a few hours a week. It has worked out well for both of them, but she has seen plenty of other mothers take work that doesn’t make the most of their skills, and pays poorly, precisely because they don’t have such connections. It’s a gap that smart employers should recognize. “We all as humans need something to do,” says Lutz. “You need to be busy and have something that energizes you.”

Top Photo: Fort Wayne, Indiana, home-based entrepreneur Kristen Whirrett (RACHEL VON)

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