NCPA - National Center for Policy Analysis

Home Contractors

June 28, 1999

With the number of home-based businesses at more than 12 million and with a projected 14 million telecommuters by next year, more households are expected to "outsource" basic homemaking functions. These stay-at-home workers and entrepreneurs can add greater value to their own money-making efforts if the details of household management are turned over to specialists, experts point out.

And that accounts for the rise of vast new home-service industries.

  • Supermarket sales of prepared foods are expected to reach $176 billion a year by 2001 -- and combined with take-out, delivered and "grab-and-go" foods, this industry accounts for $460 billion a year in sales today.
  • Between 1986 and 1996, the number of households employing an external cleaning service increased by 33 percent.
  • The child-care industry is booming, with revenues estimated at $30 billion -- up more than 100 percent in real terms over the past decade.
  • In the Boston area, home grocery shopping companies also pick up and return dry cleaning and home videos, mail packages, develop film, deliver firewood, repair shoes and collect deposits on empty bottles.

Then there are concierge or personal-service companies which do everything from waiting at home to meet maintenance personnel to walking clients' dogs.

Analysts say these developments boost the economy in three ways. They help create greater employment and more tax revenues. Time saved results in greater work productivity. And it allows people to devote more time to hobbies, many of which were previously necessary activities, such as hunting, sewing or gardening, which people now do for fun.

Source: Jagdish N. Sheth (Emory University) and Rajendra S. Sisodia (Bentley College), Wall Street Journal, June 28, 1999.


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