Gilded Gophers
For those of you who don't have the privilege of living here in Southern California, you probably can't fully grasp who many really rich people live here. And I don't mean just the stars.
So many, it turns out, that the demand for high-performing house servants has turned insatiable. Salary demands by trained servants are now hitting $80,000 plus housing and full benefits -- that's about a $125,000 annual package.
I had to read Sunday's L.A. Times story on this issue twice to make sure it wasn't an April 1 spoof.
Actually the joke is on us. On most of us. Here's one more rather darkly dramatic indicator of the growing inequalities in our economy.
Recently I had been doing some reading on health care -- something a bit more basic than a personal ball-washer. And again I had to do several double-takes. Not only are there 50 million Americans without insurance, but the average policy for a family that remains covered has hit nearly $12,000 a year. That, together with college costing as much as $50k a year, is an excellent argument for vasectomy at birth.
Anyway, back to our $100 grand a year servants. Here's what the Times says about the boom of the super-elites:
The number of private household workers jumped 67% in Southern California over the last five years to nearly 150,000, according to the U.S. Bureau of Labor Statistics. This total doesn't include illegal-immigrant nannies and gardeners or anyone paid off the books.
Dennis Meyers, principal economist at the California Department of Finance, says such strong growth isn't surprising. "We have so many new millionaires," he says.
More than a quarter-million households in the Southland have incomes exceeding $200,000 a year, according to census data, up 45% since 1999. There are multiple reasons for the rise, including a robust stock market, President Bush's 2001 tax cuts, the recent real estate boom and an entrepreneurial economy good at creating wealth.
Even the above figures are misleading. Why start counting at $200k? I mean, two servants can make that much! The folks employing the costly servants are deep into 10 and 11 figure incomes. And more.
Some smart cookie has put together a training institute and for a dandy fee of just $13,000 will in eight short weeks mold you into a perfect servant -- and will place you in a job. The key to success, of course, is not only sharp organizational skills but also absolute deference to the master. Here are the hints from servant-trainer Ms. Starkey:
*  The task of the help is to make the lives of the principals — the industry term for the clients — run as smooth as glass. "The principals don't want to hear any negatives. They don't want to see anything that should have been swept up, picked up or repaired. And if something falls through the cracks and they unload on you, you always have to be willing to apologize."
*Â Keep quiet...
*Â Â Rich people know the value of a dollar. "Principals always want to know if a contractor or salesman will discount for cash. Always. Always."
* What they do with those dollars is up to them. "If they take $60,000 to rent a private jet, it's their business. You can't think about how they just spent in a few days what you make in a year."
A household worker who seamlessly and cheerfully is able to exemplify all these qualities is deemed in the industry to have something called the "service heart."
Ah yes, a service heart. One of those core values that has made America great.
I don't know how great a deal this is. Thirteen grand to learn how to be an efficient handmaiden? I know a guy in Las Vegas who runs a dealers' school. In half the time of the servant course -- in only four weeks-- and for under $500 he'll turn you into a multi-game dealer: 21, craps, roulette. Not that hard to make $80,000 pushing the dice -- and among much better company.
April 2nd, 2007 at 8:14 am
Gimme a break, Marc, don’t you know better than to believe what the papers say? You know perfectly well that most household workers in So Cal are undocumented immigrants making $6 or $7 per hour with no benefits. This story is one more in the long line of middle class urban legends about how rich the poor are, like the stories of welfare queens or of street people who hoard millions of dollars. If nothing else, this non sequitur should have tipped you off that this is less than scientific reporting:
>There are multiple reasons for the rise, >including a robust stock market, President >Bush’s 2001 tax cuts, the recent real estate >boom and an entrepreneurial economy good >at creating wealth.
This is an explanation of why there is an increased number of people in So Cal with 200,000+ incomes, presumably measured by AGI. Tax cuts would have no effect on AGI, and the real estate boom would have very little since few people would have more than an occasional big score from selling real estate.
April 2nd, 2007 at 9:43 am
“You know perfectly well that most household workers in So Cal are undocumented immigrants making $6 or $7 per hour with no benefits.”
Are you saying he’s acting as if oblivious to this fact? Actually, in the article he quotes, it says
“This total doesn’t include illegal-immigrant nannies and gardeners or anyone paid off the books.”
Anyway, if you want to pick on somebody for being blind to abuses of illegal immigrants, you picked the wrong guy. That’s one of Marc’s major beats, and he does it better than anyone else I regularly read. (OK, I’m not yet regularly reading rosedog’s blog.)
What most of those illegal immigrants can’t do, because they typically lack the required language skills and other polished personal effects, is “make the lives of the principals … run as smooth as glass.”
Take it from me — it makes a difference. I help run a small hotel (in Tokyo, catering mostly to non-Japanese guests), and just tonight, I had to smooth over a conflict stemming in part from my (Japanese) wife’s limited English. This operation has gone from being a rather marginal operation to making us something like the kind of money you can now apparently make kowtowing to the rich in L.A. I think my native English skills make the difference.
Even though it’s at the budget end of the spectrum, the hotel involves much the same kind of work. I have to admit that I’d rather do this, though. Travelers expect some rigors — it’s the nature of travel, especially at the budget end of the market. But trying to make things “as smooth as glass” in people’s *personal* lives is a treadmill: you get the Princess and the Pea Effect. Or perhaps I mean the Pee Effect — standing under the urine flow, just to get the other kind of Golden Shower, the kind you can take to the bank. No thanks.
With knowledge-worker jobs leaking away, the U.S. may increasingly have an economy of the Servers and the Served. I don’t much like the sound of that — and I’m *in* the service sector!
On some other points:
“… a robust stock market …”
Nominally, but actually not showing growth in real terms.
“… the recent real estate boom …”
AKA real estate bubble. Property bubbles often follow stock bubbles, and this property bubble has been bigger (in overall valuation) than the stock bubble, which was the biggest one in PPP-per-capita terms since, yes, 1929. Bubbles always end. The question is how.
“… Bush’s 2001 tax cuts …”
which, in poll after poll, seem not likely to last the decade, if the voters have anything to say about it.
I can hear the sob stories now: “I used to be making 80 grand a year walking dogs in Bel Aire, but now I’m flipping burgers for minimum wage. And I haven’t even paid off the $13,000 I borrowed for that Fundamentals of Feudal Servility course, because I spent everything I earned trying to compensate for Life in Servant Hell!”
Enjoy what you can while it lasts.
April 2nd, 2007 at 11:23 am
Thanks, Marc, for being a voice of reason in our gilded neofeudalist age.
Anyway, what do you expect from a paper that was just bought by a Real Estate tycoon?
April 2nd, 2007 at 2:35 pm
I know two people who are “personal assistants” to ultra-rich/ultra-accomplished “principals”, and from what I hear they do not exactly fit the picture drawn by the LA Times interviewee. One thing they talk about is that there is a sense of “**** is just like a member of the family…” sort of quasi-egalitarianism about the relationships. And I would be very skeptical about the salary range discussed here. It is higher than I have seen. Finally, the “teacher” left out the one quality that is valued above all: willingness to honor the terms of the confidentiality agreement.
April 2nd, 2007 at 2:42 pm
“A household worker who seamlessly and cheerfully is able to exemplify all these qualities is deemed in the industry to have something called the “service heart.”
Sounds like Woody and Jim R. and the other low-level Republican activists.
April 2nd, 2007 at 5:43 pm
Yep, Marc, I’ve been seeing that at my job all year. Servility pays.
April 3rd, 2007 at 2:46 pm
The widening of the upper middle class is a good thing, in the main, and the increasing number of neo-wealthy is the biggest reason the U.S. economy appears on the surface to defy gravity.
This widening sector of high-wage earners who also have significant investment income are far less vulnerable to business cycle swings than average Americans are. As a result, they spend right through recessions, offsetting the effects for everyone.
The widening income gap certainly has social costs, but can we really be that sure they are greater than the benefits of widening overall wealth?
More important, do the critics here have any ideas on how to narrow the income gap other than by lowering them at the top?
It’s easy to say–universal health care, more education spending or more AFDC, but actually doing it and implementing it in an intelligent way is far more complex and daunting a task than many realize.
The issue of servility is also interesting. In Japan, the need for servility in the service businesses is embraced and accepted as “natural.” As a result, you get good service without paying a tip. Not saying this acceptance of hierarchy has no drawbacks, just saying too many Americans are too sensitive about servility for their own good.
April 4th, 2007 at 4:55 pm
The top three hundred thousand families make as much as the bottom ninety million.
Income inequality is now at the greatest level since 1928.
April 5th, 2007 at 1:14 am
Income inequality is an important problem, but it is only part of the picture.
The same wealth vortex is creating a bigger, broader class of upper middle-class people who are immune from business cycle swings. Without them, downturns like the housing-bubble bust we’re now seeing would surely dip significantly deeper, and, hitting hardest the people least able to withstand it.
April 6th, 2007 at 7:44 pm
It’s funny to see Cooper lionized above, since he’s a tiny little cog in the wheel that leads to such a huge wealth gap.
In endless past posts, Cooper has fully supported us ImportingAPeasantry; the beneficiaries of that are not the middle class but those well above them. In fact, it’s a wealth transfer from the middle class to those who can afford such servants.
The next time you read Cooper using the same old weak argument to support illegal immigration or “reform”, think the whole thing through and ask, “cui bono?”
(Interesting sidenote: the author of the linked article is a “mini-Cooper” in his support for illegal immigration; details at the link.)