Megan McCardle, over at The Atlantic, answers the question “With so many unemployed, and income increasing faster among the affluent, why aren’t people hiring more servants?” It’s an interesting thought experiment. The answers:

1.  Various forms of public assistance, and wealthier families, have increased the reservation wage.  A servant in 1900 worked at least 10 hours a day, at least 5.5 days a week, and according to our archives, cost at least $25 a month for a “passable” one.  Many middle class people could probably afford to pay about $500 a month, plus a room and some food, for someone who would take care of all the housework, all the time.  But how many Americans would work for such a sum?  Our house was built in that era, and either they didn’t have live-in servants, or the help was sleeping in a pretty gnarly unfinished basement.  You’d have to be fairly desperate to take the equivalent job today, and almost no one is that desperate.

2.  There’s a tax wedge.  If servants were more common, the IRS would be more assiduous about auditing for payroll taxes, etc.  (Already a problem for working women with nannies who end up in public service). My mother actually paid taxes for her cleaning lady, and it was not only expensive, but an administrative nightmare–somehow, the numbers never added up right, the paperwork got lost, etc. Taxes reduce the differential between the value of your labor and someone else’s, because you don’t have to tax you.

3.  Regulatory overhead  See above.  The modern labor regulatory system is set up to deal with corporations, not individuals contracting for informal labor.  Either the work ends up in the gray economy (illegals), or it’s contracted out to companies that can amortize the regulatory overhead over a lot of workers (Merry Maids)

4.  Management. Workers have to be managed.  They leave.  (Hance Saki’s memorable epigram: “She was a good cook, as cooks go.  And as cooks go, she went.”)  They need to be replaced.  Sometimes the replacement doesn’t work out.  All of this takes time.  For the mistress of a house in the era before labor-saving appliances, managing servants was undoubtedly more pleasant than scrubbing the coal scuttles. But it was a job.  And many high-paid women in the sub-Gates class have full-time jobs; they don’t have the time to take on full time employees.  A large servant class may have presupposed the existence of a large class of women at home.