Math For Working Moms Helps Pinpoint More Accurate Hourly Wages & The Scales Don't Exactly Tip In Our Favor
When it comes to being a working mom, the running joke is that no one can really afford your services. From boo-boos to board rooms, your expertise includes culinary, clerical, childcare, and virtually every other specialty on the spectrum. Now, thanks to a few handy math for working moms formulas courtesy of finance experts Paula Pant and Kim Loewer, you can finally see a more accurate hourly wage realized. But, unfortunately, the scales doth not tip in our favor, per se.
As women in the workforce, we realize there are certain socioeconomic iniquities we'll inevitably face. (Hello, motherhood penalty and fatherhood bonus!) However, there are also other factors working against working moms when you crunch the numbers. And since we don't get compensated for the myriad ways we contribute outside of our nine-to-five jobs, there's nothing to cancel out these costly factors.
Bottom line? They affect our bottom dollar. The silver lining here is that we can use the knowledge to inform our life decisions. Ever wonder why so many women choose to take a break from the workforce when they have kids? Aside from the obvious reason of getting paid in precious baby snuggles every day, crunching the numbers will net you a better understanding.
Thus, there are two main mathematical tools for determining a working mom's real hourly wage.
1. Formula for W-2 Moms
Does your nine-to-five job include the occasional board meeting? Do you leave the house in pencil skirts or pantsuits and pumps? You're probably part of the W-2 mom crowd. Unlike self-employed moms, you have to deal with external expenses like, oh, you know, that $5 coffee you get at the coffee shop every morning on your commute to your cubicle. Your formula, then, would look something like this:
Explains Paula Pant, finance expert and founder of Afford Anything, to Fortune, "A lot of people fail to calculate the operating expenses they incur to make the money. Once you subtract out all of your operating overhead, then you arrive at your net profit." For W-2 (aka salaried) moms, this means subtracting full-time daycare costs, commuting and other vehicle expenses, work-related wardrobe costs, and the occasional lunch and coffee you purchase on the job from your annual salary. Given that childcare alone can cost a whopping $18,000 per year, it's not entirely shocking this brings the W-2 mom's total annual expenses up to nearly $25,000. If your gross pay is $50,000 per year and you deduct that figure, what you wind up making is roughly $12.23 per hour. P.S. This estimate doesn't even include taxes and insurance.
2. Formula for 1099 Moms
Does your desk look a lot like your couch? OK, OK... is your desk your couch? Do you wear PJ pants and rock a bun more than you care to cop to? Welcome to my world, 1099 sistah! We're what is deemed the 1099 working moms, otherwise dubbed the "self-employed" or "freelance" moms. You know, WAHMs. And while we don't typically have to contend with expenses incurred from leaving the house for the daily grind, our daily grind also adds up in oft little thought of ways. Assuming a $50,000 annual income, a 50 week year, and a 36-hour work week, a 1099 mom makes around $28 per hour on paper. Not too shabby. Naturally, though, it's not that simple. Running a business comes with its own unique cash-sucking properties. One of the biggest of which is the self-employment tax, according to Kim Loewer, EA (Enrolled Agent) ATA (Accredited Tax Advisor) of Loewer and Associates. The math for working moms formula for 1099 moms, then, would look something like this:
So, factoring in the sizable 15.3-percent self-employment tax and other business expenses, your hourly rate drops from around $28 to $19 per hour. Depending on the cost of any necessary childcare, that figure could drop even further.
What does this all mean for working mothers? We don't get paid nearly enough, obviously. But it also means we should look at the big picture before making any major career decisions and/or before having a baby turns our cerebrum into a swirling vortex of soggy mush ("baby brain" is legit, and the struggle is real).
Thanks to the ever-increasing cost of childcare — the biggest chunk of change for most of us — many workforce mamas are pressing pause on the workplace. Just remember, cautions Pant, "Taking that break from your career could result in a lifetime of decreased earnings."
And since I can't leave you on that abysmal note, here's an oh-so-apropos eCard to inject some humor into the situation.