Imagine a world where child care is a luxury good. Only the most affluent families can afford the service, shelling out $30,000 or more per child each year. Women’s labor force participation rates — already at their lowest ebb since 1988 thanks to the pandemic — crater further, with less than half employed. The economy stagnates with so many would-be workers off the market. Meanwhile, reports begin to emerge: High numbers of children are suffering abuse and neglect in illegal, unsafe, cut-rate day cares.
This is the path the United States faces if it does not invest permanent public money into our failing child-care system.
We have a chance to avert this fate. President Joe Biden proposed spending $450 billion to subsidize child care and offer universal preschool as part of his 10-year, $3.5 trillion Build Back Better plan. While at the moment the early childhood policies are reported to remain intact, it’s highly unclear what of this proposal will make it through as Republicans stonewall the entire package and its ambitions get whittled down to suit moderate Democrats.
The dire predictions do not require donning a doomsayer’s cloak, but simply extending current trend lines to their logical conclusion. Consider: Before the pandemic, child care staffing was already difficult. The median wage for child care workers in 2020 was $12.24, good for an annual salary of $25,459 — in the second percentile of all occupations. Half of workers have no access to employer health insurance.
Scrabbling along these shaky beams was enough to keep the sector above water when the competition was paying equally badly. But burger joints and their ilk started raising their compensation. Amazon and Target now both offer $15 national starting wages along with fringe benefits, and other major retailers have followed suit. There’s a reason that while restaurants have rebounded to 92 % of their pre-pandemic staffing levels — and overall, the economy is back to nearly 97 % — child care is still stuck more than 12 % below its ugly normal. What’s more, short-staffed programs experience a vicious cycle of stress that sends yet more practitioners heading for the door.
One fundamental that predates the pandemic and its ripple effects is the cost of doing business in a highly constrained industry. In most states, for instance, one teacher is permitted under the law to care for a maximum of six to eight toddlers. Personnel eats up 70 % or more of program budgets. So even though parents are paying through the nose, the true cost of care is so high that programs would take a loss on each kid. As it stands, programs already have to cut wages to the bone just to keep the lights on. To keep pace with other industries, their only option (other than public funding or closure) is massively raising prices — hence, a luxury good. The U.S. Treasury Department has called the child care business model “unworkable.”
This is an issue that hits everywhere and everyone. Nearly two-thirds of young children in the United States, 13 million all told, are in regular nonparental child care, along with millions of school-age kids who use child care programs for before- and after-school care. The Treasury Department notes that beyond just those children and parents, “employers also lose if capable employees cannot find child care,” with the economy suffering from high costs of absences and churn, as well as an artificial shrinking of the labor pool.
Indeed, a total child care system breakdown will result in parents — read: mothers — being drop-kicked out of the workforce in droves. We already saw a version of this during the first year of the pandemic, when over 1.5 million mothers exited the labor market amid school and child care closures. Arguably, that isn’t even the worst effect. The worst effect is that many families are going to figure out some arrangement, with safety and quality taking a back seat to putting food on the table.
Child care has long had an awkward fit in the American economy, a public good forced to masquerade as a free-market service such as a restaurant or gym. There is a limited window to build a new system where the old one has failed: It cannot be allowed to slam shut on the outstretched fingers of the nation’s parents and children.