The two-career couple at Netflix

Netflix now offers a year of paid parental leave to both mothers and fathers (Washington Post). Readers would not forgive me if I didn’t try to explore the economics of this.

Suppose that Jack and Jill are expecting their first baby and are hoping to have a family of four children as well as own their own business. Both are skilled software engineers. They both take jobs at Netflix, earning a combined $300,000 per year. The are just finding their way around the class libraries a month later, without much working code expected of either of them. Jill gives birth to Child #1. Jack and Jill then sell their expensive Silicon Valley house and move to Lake Tahoe, Nevada where they write code for their future startup company while also enjoying skiing and hiking. Child care is cheap up there so they can park the baby any time that they want (or most of the time) for minimal dollars (see the California and Nevada chapters of Real World Divorce, State Background sections, for the statewide averages).

When Child #1 is a year old, they return to work, renting a short-term stay apartment. A month into the job, however, Jill gives birth to Child #2. Back to Lake Tahoe for another year of work on the startup while collecting $300,000 per year. When they go back of course their employer needs to send them to some training programs to brush up their knowledge of the latest Java framework. (Because of course they are all so much better than straight JSP that you need to throw out your framework every year and start with a different one.) A month after they return to Netflix the second time, having done nothing but learn a new framework, Jill gives birth to Child #3, continuing the 13-month spacing. Back to Lake Tahoe for another year. They do this again with Child #4, return to work for two months and then quit to run their own company, whose product is now basically ready (about four years of development effort by two skilled programmers has gone into it). Netflix has paid them for 4.5 years, a total of $1.35 million plus benefits worth another $300,000? Netflix has received nothing in exchange for this cash. Jack and Jill have four healthy children, all of the intellectual capital investment that they needed for their startup, and perhaps $400,000 saved because they were being paid at Silicon Valley rates but spending at rural Nevada rates. Their stock option grants from 4.5 years earlier are now fully vested so, if the asset bubble continued to inflate, they might have another $1 million in stock option value.

Do readers see any reason why this wouldn’t work? I don’t see how Netflix could justify firing either Jack or Jill at any point. What kind of performance expectations could be imposed on workers who show up for just one month at a time? And how would the usual sluggish big company firing process work when people go out on parental leave before the company has time to put their on a performance improvement plan? If the goal of people who work for big Silicon Valley companies is to found or join a startup, why not let Netflix parental leave finance that goal?


15 thoughts on “The two-career couple at Netflix

  1. Hormones for Jill. Some women don’t get foggy brain while pregnant and postpartum and can do brainwork then, but it’s common even among the kind of women who want four kids and take a coding job anyway. I know of a couple examples IRL, once the kids start coming, they wash out of even work-at-home jobs that serve as de facto extended maternity leave.

    Jack would just be managed out unless he happened to be in a protected class, and “father” isn’t one.

    Have them do the whole thing with Indian surrogates and then maybe? There’s an interesting edge case I didn’t think about, if the full leave could be used when the woman is using surrogacy and isn’t physically pregnant at all the whole time. Solves the baby brain problem anyway.

  2. This generation isn’t likely to churn out those kinds of kids. Also people working at a place like Netflix likely aren’t slouches who were looking for just “any job” while I know those people exist elsewhere, you’re not going to have a massive number of people having babies to get paid only to have them.

    It doesn’t make any sense.

  3. The premise is that Jack and Jill both get hired when Jill was 8 months pregnant. This is exceedingly unlikely. Why would netflix hire somebody who is apparently literally visibly attempting to game their policy? And why would they simultaneously hire this person’s spouse?

  4. Your example of intentional conveyer-belt procreation tailored to an employer’s joint maternity/ paternity leave plan & ironclad employment contracts is so preposterously academick [no typo], that it nullifies an answer. Once again, however, I can but note that you write of (if not “promote” the concept of) babies as nothing but coldly calculated products… result of the same kind of advance economic profit/loss considerations as were they any other—let’s hope “artisanal” rather than industrial—output. In your—or is it American?—frame of mind, any woman or couple who decide to have 4 evenly-spaced babies, is automagically able to do so, never mind the 4.5 years during which the highly educated software engineer would continuously be pregnant and/or lactating while skiing in Tahoe ;-)) After all, since her & hubby’s 2 x $150000 employment contracts are signed, nothing, NUTHING!!! could upend that their serial baby-making-on-Netflix-dime strategy.

    [Now ponder for a moment the sheer lunacy of USA’s social policies where maternity & health insurance in general are tied—outsourced—to individual employers, rather than underwritten by the state/ community (federation of). Oh, I forgot, that’d smell of SOCIALISM, which would have taken those very “freedom shackles” away].

  5. As others pointed out, your scenario is hard to pull off unless the couples are so agreeable to work it out. This is more of a PR by Netflix. Even if few pull this off, the news it makes is more of a positive PR to Netflix vs. some other forms of $$ PR will want to do.

    But my comment isn’t about that, it is about discrimination. Isn’t this some form of discrimination that favors one group over another? What if my grown kid, or parents, or sibling need me for a long term care? Can I now get the same package as the soon-to-be-parents couples? If not, why not?

  6. This is why women of child bearing age find it difficult to find high paying/high demand jobs and when unadjusted, makes less on average than men. When my wife was interviewing for her law job, I advised her not to wear her ring and never bring up her marital status. What happens a year later? She had a baby and quit. Similar pattern for her female colleagues. Of course employers have adjusted for this, some firms specialize in offering positions that are relatively low pay and can readily be filled by the next young lawyer in line without much downtime.

  7. Perhaps they are counting on people being grateful. IBM, 20 years ago, had similar policies, similar in that they assumed people would work for them for their entire working careers. Worked pretty well for a while.

  8. valley dude: Why wouldn’t Netflix refuse to hire Jill at 8 months pregnant? If she is qualified to do the job and they refuse to hire her that would be a violation of federal law. See for example. As noted in it would be lawsuit-winning “evidence of intent to discriminate” if Netflix were even to ask about pregnancy.

    Why wouldn’t they also avoid hiring Jill’s husband? notes that it would be illegal for Netflix to ask Jill if she is married or what her husband’s name might be in that case.

  9. I once worked with a married couple where, over the course of four years, the wife went out on paid maternity leave four times for 3 months each time. She ultimately received four years of pay for three years of work. After pregnancy no. 2, she complained to the boss about her “average” ranking performance appraisal. The boss tried to explain that he couldn’t rank her above average because she wasn’t at work. I don’t think that went over well for the boss.

  10. My cousin works for the post office in Canada and spent several years on paid paternity leave not working while he and his 20 year older wife carefully timed their adoption of 4 (one set of twins, both born with deformed legs) children all from the same young, native, alcoholic prostitute mother (sad but true). The downside was the Canadian taxpayers paid a couple of hundred thousand$ for work never received, but the upside is that 4 children will have much better lives. So yay socialism for paid paternity leave, I guess?

    My Ayn Rand quoting libertarian side says “boo too him for cheating the system”, but my compassionate side says “bless him for taking on a huge responsibility”.

  11. My understanding is that most Biglaw firms offer 6 months of paid maternity leave, and salaries somewhat greater than . It is not uncommon for a young parent to end up taking off 6 months out of ever 18-24 months for 2 or 3 cycles, and then leave the firm for a less stressful and time consuming job.

  12. I wondered the same thing when I heard about this.
    The next morning NPR radio shed some light on it. They claimed that Netflix already had an unlimited vacation time policy. So in one sense, people could never go to work, but just had to hit their job metrics for being “outstanding”.

    I’m guessing the couple with children could get some slack for the first baby, but if they weren’t “outstanding” after that, their jobs might evaporate. (we are re-organizing, you are now in the disk-in-the-mail division, which doesn’t get that benefit)

  13. My coworker’s doltish husband retired after a 38-year career with the US Postal Service. He spent his last two years at home on paid sick leave. He started at about age 20 as a basic clerk, delivered mail, and was a supervisor. His ending salary (2004, FL) was $85K; then his lifetime annual pension kicked in at $65K (+ annual COLA + $5/mo gold-plated health insurance). Not bad for an unimpressive high school grad.

  14. > Do readers see any reason why this wouldn’t work?

    It might be difficult to get future employment at tech companies having conducted such a scheme.

    I think it would basically work, though: so you’ve found an edge case. It seems like you think it’s a devastating edge case (sufficient to not look at anything else when exploring the new policy), but I don’t see why. What percentage of Netflix workers in a position to carry this out do you think would want to? How much will this parental leave program cost in total, and how much is this potential abuse likely to add to that? Is the program worth it even with this edge case abuse as a possibility, or not?

    Discovering a hypothetical edge case of a policy isn’t really “exploring the economics of the policy”. Every policy has edge cases; we don’t judge policies as a whole by comparing which edge cases we can invent for them. Investigating the economics of a policy involves working out the likely outcome of the policy as a whole, including normal uses and abusive uses, and deciding whether the policy ends up net-positive.

  15. Chris: I don’t think this is an “edge case.” Netflix is the only company in the U.S., as far as I am aware, where this opportunity exists. Therefore couples who want to get paid for a year after each baby will be disproportionately drawn to Netflix as opposed to, say, Google or Apple.

    You characterize this as “abuse”? Why? Jack and Jill are not breaking any company rules, as far as I know. Why would it be “abuse” to use the system as designed?

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