Your Money: Perks galore rule the new economy of babysitting

(The writer is a Reuters contributor. The opinions expressed are his own.)

By Chris Taylor

NEW YORK (Reuters) – Not that long ago, babysitting seemed like an underpaid and overworked profession: Five bucks an hour and maybe a slice of cold pizza while the parents duck out to a restaurant.

But babysitters are underappreciated no more – and are enjoying growing perks in what a recent Care.com survey calls “a babysitter’s market.”

How will your sitter get to you and back home, for instance? Probably a back-and-forth rideshare on your credit card. What will they do with your kids? Maybe passes for everyone to a museum or theme park. And what will they eat? Food delivery, sounds good, or maybe the family’s private chef will whip up a meal.

In other words: Perks galore. The booking site UrbanSitter.com even has a special “Sweeten the Deal” option, where you can lure sitters with additional perks — such as meals, which are now thrown in for over 15 percent of bookings.

“Times have definitely changed,” said Lyss Stern, a New York City mom of three and founder of the lifestyle site Divamoms.com. “When I used to sit, you never asked for anything and never expected anything.”

Nowadays, Stern knows families who have taken sitters to the beach in the Dominican Republic, or skiing in Aspen, or for summers in the Hamptons, all working trips. In a poll of users by UrbanSitter, one sitter claimed to have brunched with Beyonce.

IN THE MONEY

Perks come on top of already record cash compensation – which is still rising. A 2017 UrbanSitter survey found that San Francisco sitters were bringing in the most money nationwide, at an average of $17.34 per hour – a 28 percent increase from five years prior. Meanwhile New York City sitters made $16.89 an hour (a 19 percent boost over five years), and in Seattle they earned $16.42, a 40 percent hike.

Parents are also chipping in above the base rate with tips. In 2017, 34 percent of parents reported tipping their sitters, according to a survey by Care.com (some do it via booking apps, some do it in cash). That compares to 26 percent only two years prior.

Add it all up, and 22 percent of parents report spending over $2,000 a year on occasional babysitting, according to the Care.com survey (not including more permanent arrangements like full-time or live-in nannies, which can obviously cost far more). And 41 percent spend at least $1,000 annually.

Part of the reason for the growing babysitter appreciation: A strong economy. With the bull market recently turning nine years old, and the unemployment rate at longtime lows, moms and dads are presumably feeling financially secure enough to loosen the purse strings. “There is a correlation between the healthy economy and what sitters are being paid,” said Lynn Perkins, UrbanSitter’s CEO.

Parents are also willing to jack up compensation even more for certain in-demand periods, such as before and after school, last-minute events, and popular days such as New Year’s Eve.

RESPONSIBILITIES

Of course, parents are looking for increased talents and capabilities, too – such as CPR and first-aid training, child-care certifications, early-education degrees and foreign language abilities. All that can cost the sitter: A full day of babysitter training costs around $90, according to the website of the American Red Cross, which runs specialized workshops. “Our surveys in 2016 and 2017 show that parents are expecting more, and are willing to pay for it,” said Carly Carioli, Care.com’s editor-in-chief.

Use sitters enough, and there could even be tax implications: If you pass the IRS threshold of $2,100 paid in a calendar year to a single caregiver, that person is considered a household employee. That means, by the letter of the law, you should be withholding taxes from their pay and coming up with your share of employer taxes. Just like at a full-time job, certain perks can count as compensation.

Given the immense emotional leverage that babysitters hold – if you find a responsible one whom your kids adore, then under no circumstances do you ever want to lose them – be prepared for the compensation trend to continue.

“Sitters talk among themselves about what perks different families are offering,” Stern said. “They are like anybody else: They want to get paid.”

Source: Investing.com