Jackson Miller

I got the following IM from my wife today:

according to salary.com, an average stay at home mom makes 124k annually for all the work she does….
(would make)

All of the contrived innuendo related to her and my recent conversations aside, it does make me think about how we put a price on our time.

I will be perfectly honest here, I know that being a stay at home mom is tough. Hell, I know it is valuable. However, the work an average stay at home mom performs is worth no where near 124k annually. The value a stay at home parent provides is the added love and care for the children, and frankly you can’t put a price on that. It is irreplaceable. The actual work, not so much.

That “holy shit, house wives should all be millionaires” number that gets tossed around is based on some pretty ridiculous assumptions. There are blatant exaggerations like “10 hours a week as an Executive Chef, $15,000 annually”. Sure, a homemaker cooks and cleans and creates “menus” and buys groceries, but not at the level of an Executive Chef. “You are worth $124,000″ is a feel good story, but it is bullshit disguised as a logical analysis.

I will have to get to the actual point of my post while dodging meat cleavers and dirty diapers being lobbed my way by soap opera watching couch potatoes stay at home parents from all over the internets.

In the real world we don’t get to equate every minute we spend as a fraction of the salary of someone who would do that task all day. I mean, I spent 10 minutes checking out space pictures from NASA yesterday so I guess I should add $8,000 annually to my self-worth for my astronomy work. No, in the world where someone actually signs a check for the work you do it is based on three things:

1. what the market will bear
2. what I am willing to work for
3. what I am capable of negotiating

In my experience, #1 and #3 are usually the deciding factors. Excluding things that increase the market value of an individual like additional education, #1 is completely out of my our control. This means that we can have the greatest impact on our earnings by focusing on #2 and #3.

The reason #2 rarely comes in to play is that most people don’t have that luxury. There are times when my salary has been decided by #2 like when I wanted to work for non-profits because I wanted to do work I believed in. Similarly, many stay at home parents are making their decision primarily on #2. I think this is almost always an indication of non-monetary compensation weighing heavy in the equation. (i.e. the value to the kids of having a parent with them).

If #2 is the rarest deciding factor for how much someone gets paid for the work they do, #3 is the most common limiting factor. In my current position I know the market can bare more. If it costs a company $7,000 for me to work there for a week (cost, not net pay), and I save them $35,000 that week, the market should easily bare a doubling of the cost (which would result in more than doubling of the net pay due to some fixed costs). Unfortunately for my bank account, I am either not willing or not capable of negotiating that price. Similarly, I would bet that at least two thirds of the people reading this could earn 10% right now if they were willing and capable of negotiating it.

Luckily, I am about to give you the key to happiness. Happiness is not about making as much money as possible; that is known as the “rat race” for a reason. Happiness is also not about ignoring money and the freedoms and conveniences it can afford you; I believe this is true even if done in it is asceticism in the name of a noble purpose. No, happiness is about having enough without making sacrifices that are detrimental to your goals while knowing you can likely earn more with improvement.

To me, that is what entrepreneurship is all about. Dial #2 down as much as possible by keeping expenses low. Since the profit is yours if you make it, #3 becomes much easier. If you believe in your product it even seems to come naturally. #1 is the game. It is constantly in flux and you never really know if you hit it or not. The market keeps it interesting. As an entrepreneur you can determine which markets to enter and you decide how to position yourself in that market. Of course, the market is also the gamble; not every entrepreneur can stay afloat.

At least, that is my theory. I have lots to work on before I can consider myself successful, but at least I feel in control of the price that is put on my work. I don’t envy my wife sitting at home with four kids all day. Not because it is hard work to take care of kids and try and keep the house from being destroyed (hell, I work hard every day too). I don’t envy a stay at home parent in the same way that I don’t envy someone who just takes whatever they are offered, or someone who has a hard time earning a salary they are willing to work for due to jobs moving over seas or not having the right skills for the market. All of those groups have the value of their work determined by a single factor (or the neatly defined the factors that I have developed and declared cannon).

Still, I think any time there is an imbalance in how your work is valued, the tendency is to become resentful and illogical. #2 is not enough, and neither is #1 or #3. It takes balance.