Bad google!


Google has caused quite a stir by drastically raising the price it charges for on-site childcare.  No matter that the childcare provided will be state-of-the-art, or even that they will fully subsidize the service for families who show that their income is below a certain threshold; the decision has raised charges that Google is a "corrupt company that does not care about people" and should spend "less time creating elitist daycare centers and more time figuring out how to "scale" day care for everyone, no matter what their salaries."

Google stocks have been falling or the last few months, and someone recently noticed that Google was effectively subsidizing the childcare of each child up to $37,000 per year, well over than the industry average of $12,000.  They still wanted state-of-the-art care and needed to expand their capacity in order to deal with growing waiting lists, and have realized that it is unfair for them to allow their stocks – held by many of their employees, with or without children – to go down while spending excessively.  The solution was simple; they have raised the out-of-pocket cost for parents.

Google pays enviable salaries and provides perks that have made it the stuff of legend. And let’s be honest – is it really "fair" for Google to spend $370,000 on top of salary for one employee with 10 children, while paying his equally ranked but childless coworker the same salary? 

Moreover, the assumption that companies should have on-site childcare misses almost every lesson taught in introductory economics, particularly those about specialization of labour and the advantages of competition. Google is not a childcare company; it is a search-engine company.  The employees don’t have to accept Google’s childcare, and Google does not have to provide it. If businesses do offer on-site childcare, there is no reason to believe that it will be particularly good or cost-effective thanks to its privileged position in the market.  But the fact that companies do provide it, and that they subsidize it for those who really cannot afford it, is a great perk, and likely a useful recruitment tool.

The suggestion that Google is an immoral company for fully subsidizing state-of-the-art child-care only for employees who actually can’t afford it is absurd.