David Truscott is a do-it-yourself kind of guy. The Washington state native builds his own furniture, does his own home remodeling, and handcrafts violins that fetch upward of $3,000 apiece. What’s more, the violin maker and auditor recently developed an international supply chain that is expected to boost instrument production to nearly $250,000 this year. Not bad for a twenty-four-year-old.
But Truscott can’t or doesn’t want to do everything. He often pays professionals or online service providers to perform routine tasks, such as laundry and grocery shopping, for which he simply doesn’t have time. When he’s not in the workshop, he’s out with friends. “I’d rather go to the beach than to the Laundromat,” he says of his Saturdays.
His plight is not unusual. For today’s ambitious and time-strapped Americans, spending big bucks on goods and services to free up a few precious hours or minutes is almost customary. Professional dog-walking services, housecleaning crews, automatic carwashes, and even microwavable dinners all save time. And these days, time is a priceless commodity. Or is it?
If the old adage that time is money holds true, then knowing exactly how much one’s time is worth could drastically change the way one prioritizes his or her daily activities. To that end, economists and specialists are gaining insights as to how to monetize a minute—and that’s helping ordinary folks achieve new levels of productivity.
Economics professor Ian Walker of the University of Warwick in England wanted to see just how accurately he could calculate the value of a person’s time. He developed a time-value formula that approximates real hourly wages, adjusted for taxes and living costs. It looks like this:
The value of your time = [wage (100-tax rate)]/cost of living
A single wage-earner living in Salt Lake City making $75,000 a year will have a gross hourly wage of $36, assuming he works forty-hour weeks and gets two weeks of paid vacation. His combined marginal tax rate (the total of federal, state, and local taxes) would equal roughly 35 percent, based on a consensus of several area tax publishers. And his local cost of living index according to economic research group ACCRA is 98 or .98 times the national average (100). Plug those numbers into the formula, and his real hourly wage comes out to about $23.88 per hour, or [36(100-35)]/98 = 23.88.
Now, if lawn care services in the area run about $40 per lawn per week, and this fictional wage-earner’s real hourly wage comes to only $23.88, it might be worth his time to mow his own lawn, assuming it doesn’t take him all day. If he finished the job in an hour, he would save almost $16 dollars over the professional rate. On the other hand, he might be willing to pay that premium in order to do something more meaningful to him for an hour—like catch up on bills or, better yet, catch some z’s.
Work-life balance expert Kurt Sandholtz (who did this interview by cell phone while strolling through a supermarket) says that real hourly wages aren’t the only way to value one’s time. The globetrotting consultant has studied the effects of outsourcing at companies like Conoco-Phillips and Fidelity Investments and has also taught at the Marriott School. “Most outsourcers have more income than discretionary time,” he says. “Their motto is, ‘I want it all, but I don’t want to do it all myself.’”
Personal value systems, he says, can guide a person’s decisions as much as monetary measures can. A simple stir-fry dinner, he points out, comes in one of two ways: ready-made or made from scratch. Though the ready-made meal might cost more, someone who earns $30 an hour might not mind coughing up an extra $5 (about ten minutes’ worth of wages) to save ten minutes of preparation time in the kitchen. That person might value convenience more than culinary prowess.
It’s the same reason that Truscott, who lives in New York City and does not have laundry facilities in his apartment building, says he would rather pay a premium for doorstep pickup and delivery than miss a Friday night date to wash clothes. He pays about $8 a week—anywhere from 70 cents to 90 cents per pound of laundry—depending on which Laundromat he uses.
When one defines his values, it’s a simple process to weed out the jobs that would be best done by others, Sandholtz says, but the returns should be worth the investment. “If you’re not clear on what your values are, then it’s easy to hire out services and waste time doing things that don’t give you satisfaction or a sense of well-being,” he says. “You can hire your yard work out and watch TV all day, but what have you gained?”
Marsha Tadje, a nursing instructor in Salt Lake City, has never hired a housecleaner or lawn care service for her home in Sandy, Utah. She spent decades whipping up nutritious, home-cooked meals for her husband and three girls before breaking from her routine in the kitchen about five years ago. “I’d rather not cook at all,” she says, now that only one daughter still lives at home, “so we just eat out a lot.”
While meals together have always provided a special time for the family, the social rite has merely shifted locale, Tadje says. Those values of unity and togetherness haven’t changed. By dining out about four evenings a week (as healthily as possible), the family can enjoy one another’s company without trekking to the grocery store as often or hassling with dishes. That leaves more time for other things: “We’re playing golf,” she says. “Our girls have all had lessons.”
Beyond time-value formulas and personal value systems, a final indicator can help people maximize productivity and satisfaction—opportunity cost. Opportunity cost is the value of foregone opportunities. By weighing the benefit of an action against its opportunity cost, an individual can judge which of two seemingly equal alternatives holds more value. For example, the opportunity cost of a day at the beach might be a baseball game or a visit to grandmother’s.
But sometimes the opportunity costs are initially unrecognizable. Some studies have shown that dual-income families earn more than a single-income family of a generation ago, but that they actually have less disposable income. Why? Today’s families pay far more for goods and services that simply didn’t exist twenty years ago. Additional expenses for childcare and transportation can sap families of resources that might otherwise end up in the bank.
There will always be tradeoffs. With every opportunity there is a cost, and those costs should be factored into the equation, Sandholtz says. “There’s an intrinsic value in doing things yourself. I want my kids to know what it’s like to mow the lawn or clean the bathroom,” he says. In short, time is valued differently for everyone. Ideally, what remains universal is the satisfaction and equilibrium we receive in our lives from performing certain meaningful tasks ourselves.
ON THE CLOCK WITH A NEW YORK DOG WALKER
It had been a classic New York City downpour—the kind that floods subway tunnels, stalls trains, and grinds traffic to a halt. But when I arrived five minutes late to my rendezvous point on Manhattan’s Upper West Side, professional dog walker Jim Cappelletti looked peeved. He had a job to do—and his clients weren’t paying him to stand around and watch the stormclouds. “This is George,” he said curtly, introducing a harlequin Great Dane with a white coat and black patches. “He needs sixty minutes in the park, and we’ve already wasted five.”
A tag-along journalist delayed by traffic, I arranged the meeting to learn what New Yorkers are willing to pay for pet care in a city with more than half a million dogs. Clad in a slick blue raincoat, with a head of jet-black hair with hoary tufts above his ears, Jim is the middle-aged owner of a dog-walking service called Central Bark West. He bought it from his own dog walker after leaving a career in dance theater not quite five years ago. Why the switch? “When I sat down and looked at the numbers,” he recalls, “I thought, ‘I would be stupid not to do this.’”
Trailing George through Central Park’s cobblestone pathways and lush, dripping canopies, Jim explained: Because so many New Yorkers work long hours (but still love their canines), they’ll pay a premium for professional pet care. Every weekday, Jim picks up and walks about twenty dogs—usually one at a time—for up to an hour each before returning them to their owners’ apartments. With the help of one or two associates, he can usually complete his rounds by 5 p.m. On top of that he offers cat and puppy sitting, as well as overnight stays on weekends. “I’m not a vet. I’m not a dog whisperer or a trainer,” Jim says. “I just give people’s pets my undivided attention.”
And that’s exactly why Jim keeps such a busy schedule. His clients pay up to $29 per dog per day for his walking services, and up to $65 per overnight stay. All told, Jim makes close to $100,000 a year, but he says he could make a lot more if he walked in packs, hired additional walkers, or charged for peak hours between 11 a.m. and 2 p.m. Not all of his clients are affluent, he says, but even those who are tend to call out errors if they think their bills are off. “They’re very tight with their budgets,” he says.
And in New York, that’s not all that uncommon. Even Jim and his wife—an attorney—do their own laundry. But with little time to waste, they outsource housekeeping duties at a cost of $60 a week. And after fourteen years of riding public transportation, Jim recently bought a black Piaggio scooter to help him cram more appointments into his day. That, too, has boosted business.
With the soggy park behind us, we crossed Central Park West and dropped off George at a five-story, brownstone apartment building with a small elm out in front. As the rain let up, I asked Jim a final question—why he no longer had a dog of his own. Mounting his scooter, he smiled. “Because if I did,” he said, “I’d have to hire someone to walk him for me.” Just then he shot a glance at his wet wristwatch and pulled out from the curb. His next appointment was five minutes away—and Jim doesn’t like to be late.
When it Makes Sense to Outsource
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Article written by Bremen Leak
Photography by Bradley Slade
About the Author
Bremen Leak is a business reporter in New York City, where he often rides his mountain bike to avoid paying subway fares. He earned his BA in communications from BYU in 2005.
