Jul 5, 2008 02:20 PM
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Wed Feb 10
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Joe Nocera of the New York Times has taken note of Google's childcare crisis. A brief recap: After taking its childcare programs in-house, at the behest of Google executive Susan Wojcicki, the sister-in-law of founder Sergey Brin, Google hiked its rates 70 percent. Parents were infuriated not just at the price hike but, accustomed to Google's culture of analysis-driven consensus, at the imperious way the decision was handed down. Nocera's reporting reveals more numbers showing just how incompetent Google is at daycare — and how comfortable Brin's PR handlers are at lying on his behalf. How, in other words, Google has become just like any other company in corporate America.
Nocera reveals that, at Wojcicki's behest, Google decided to upgrade its childcare to a hyperluxurious standard, including adopting the Reggio Emilia approach to pedagogy. The result: At tuition rates of roughly $14,000 to $19,000 a year, the subsidy paid by Google ballooned to $37,000 a year. From that followed a tuition hike to as much as $29,000 a year, at which price Google still loses money.
At no point, it seems, did Wojcicki or any of the others she involved in planning Google daycare do a market-rate analysis. They simply built the childcare facilities as they saw fit, and then priced it based on cost, not the going rates — even for the kind of quality care they professed to seek.
The Scandinavian School in San Francisco, for example, offers full-time Reggio Emilia daycare for $16,000 a year for infants, and less for toddlers and preschoolers. If the Scandinavian School charged Google's outsized rates, it would run a nearly 50 percent profit margin. Google, by contrast, is losing money by the fistful on its childcare.
So Google has on its hands a disaster: A disaster for parents, a disaster for children, and a disaster for Google shareholders. How does Google respond?
Not by fixing the problem, but instead by lying to a New York Times columnist. Nocera, a famed reporter, quotes Brin twice. Google PR repeatedly denied that Brin made these comments — an unbelievably brazen act, considering the remarks were made before large groups of Google employees. A sampler:
At a T.G.I.F. in June, the Google co-founder Sergey Brin said he had no sympathy for the parents, and that he was tired of “Googlers” who felt entitled to perks like “bottled water and M&Ms,” according to several people in the meeting. (A Google spokesman denies that Mr. Brin made that comment.)
But parents who talked to me said that several times during the six-week-long day care brouhaha, Mr. Brin made comments indicating that he viewed the whole thing as a giant economics experiment. “This is a supply-and-demand issue,” he told one group of parents — adding that Google needed to charge what the market would bear. (Through a Google spokesman, Mr. Brin denies making such a statement.) Given that Google has lots of pre-I.P.O. millionaires, it can clearly charge a lot.
Of course, Google PR would deny that Brin made these statements. They are damning; they suggest the founder is out of touch with rank-and-file employees, and callous in his treatment of them. He surely is, but it is unseemly to admit as much.
Wojcicki, with Brin's permission — what an indulgent brother-in-law! — is conducting an experiment on her fellow Googlers, and their children. But Googlers did not sign up for this experiment. Any parent knows how difficult it is to find good, affordable childcare, and how wrenching for children it can be to change providers. The real test going on here isn't some kind of supply-and-demand economics experiment. It's how arrogant Brin and his clique can get before his employees revolt.
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