The U.S. Child-Care Crisis Is Torturing Parents and the Economy
Originally Appeared in Bloomberg Businessweek
By: Cynthia Koons
December 10, 2020
It didn’t seem possible that the U.S. child-care crisis could get much worse. Then came the pandemic, and parents were thrust into full-time caregiving roles for months on end. Beyond being stressful and exhausting, that reality has forced millions of parents, mostly mothers, to make tough decisions about how much to work, if at all.
ILLUSTRATION: TED GUERRERO FOR BLOOMBERG BUSINESSWEEK
Even C. Nicole Mason, who’s spent decades researching economic policies that benefit women, gained a new appreciation for the value of having some help watching her kids. Mason is president and chief executive officer of the Institute for Women’s Policy Research in Washington and a single mom with twin sixth graders. When the school year started in the fall, Mason and her children began their days by logging onto their laptops. It was a reassuring routine, and her son and daughter seemed to be adjusting well to all-remote learning, or at least that’s what they told her. Then, a few weeks in, a teacher reached out to tell Mason that her children were falling seriously behind. “I’m working, I can’t keep an eye on them,” she says. “I felt like a failure.”
Her solution: hire someone to monitor her kids’ online schooling. But that’s not an option for most American households, where women are disproportionately feeling the pain of shuttered day-care centers and schools. Mothers are more likely than fathers to deal with “unexpected caregiving shocks,” says Kate Bahn, an economist and the director of labor market policy at the Washington Center for Equitable Growth.
Government statistics confirm that. From February to November, 2.2 million women left the labor force, compared with 1.8 million men. The gender divergence was especially visible in September, when more than half of U.S. children started the school year remotely. That month, 865,000 women disappeared from the workforce.
Of course, men haven’t been immune to the Covid-19 recession, but they’re not hurting nearly as badly. A survey this summer by Lean In and McKinsey & Co. found almost a quarter of women with children under the age of 10 were considering taking a leave of absence from their jobs, or quitting altogether—nearly twice the proportion of fathers with kids in the same age cohort.
The pandemic has shined a harsh light on what has been a long-festering problem. The world’s largest economy notoriously lags other industrialized countries in investing in child care and early education: The U.S. spends less than 1% of gross domestic product, putting it ahead of only Turkey and Ireland among the member nations of the Organization for Economic Cooperation and Development. “Almost all developed countries have things like subsidized child care, paid family leave, universal health care,” says Sandra Black, an economist at Columbia University. “The economics make sense.”
The lack of family-focused policies isn’t just inconvenient for working parents, it’s become increasingly clear it’s holding women—and by extension the country—back. According to a report from S&P Global Inc., the U.S. could add $1.6 trillion to GDP if women entered and stayed in the workforce at a rate similar to Norway’s, which has government-subsidized day care.
One estimate found that if American mothers continued to cut back on work at the same rate as during the first wave of Covid in April, the accumulated loss in wages would amount to $64.5 billion annually. This reality may finally be sinking in for policymakers. “We’re in the mainstream discussion of economics,” says Khara Jabola-Carolus, executive director of the Hawaii State Commission on the Status of Women. “We were fully excluded before.”
In April, Jabola-Carolus convened a group of experts and drafted a Feminist Economic Recovery Plan for Covid-19. Among its chief recommendations was creating infrastructure for affordable and accessible child care. The plan has received global attention, and Jabola-Carolus says she’s been contacted by representatives from the Group of 20, Canada, Northern Ireland, and several United Nations agencies and has spoken at 50 events. “Certain top government officials had never considered caregiving as part of economics,” she says. “Now they are asking the commission for formal tools and training for entire departments to evaluate whether their coronavirus recovery programs are truly equitable.”
America’s child-care revolution has had some false starts. It’s fallen largely to states and cities to implement programs since the federal government decided it wasn’t going to. In December 1971, President Nixon vetoed a law designed to establish a framework for nationally funded, locally run day-care centers. Nixon called it a “long leap into the dark,” arguing it was fiscally irresponsible and would weaken families. Instead, it was women who were forced to take that long leap, as they joined the work world in ever-larger numbers without policies to support them. At the close of 1971, women’s labor force participation rate was 43.8%; by the end of 2019 it had shot up to 57.7%, helping to drive a more than threefold increase in U.S. economic output over that span of time.
In a glaring instance of market failure, the supply of child care simply has not kept up with the demand. More than half of Americans live in a so-called child-care desert, with little or no access to quality care, according to the Center for American Progress. That means what’s available is rarely affordable. It’s not uncommon for parents of infants or toddlers to pay more than $1,000 a month in child care—equal to more than 17% of median household income. There have been efforts to lighten the burden on families, such as the federal Child Care and Development Block Grant Act of 1990, but they’ve been focused on low-income households. There’s been no relief for middle-income wage earners, aside from a federal tax credit that tops out at $6,600 for two or more dependents.
The U.S. is an outlier among wealthy countries because of the way politics and culture have shaped policy on child care. Americans have no problem paying for other people’s roads, even if they’ll never drive on them. But subsidizing other people’s child care is a different story. “When it comes to dealing with people, particularly people who seem vulnerable, that sort of exchange stops,” says Dominic Richardson, chief of social and economic policy at UNICEF’s Office of Research-Innocenti. “And it creates a barrier to the cumulative investment that would benefit everybody.”
Covid got the federal government to acknowledge that families need the kind of help that hadn’t been available previously. Lawmakers added $3.5 billion in funding to the coronavirus stimulus package Congress approved in March to help essential workers secure child care. In addition, the Families First Coronavirus Response Act requires some companies to provide paid sick time and family leave. Yet it exempts the biggest employers and is scheduled to expire at the end of the year. Congress’s latest stimulus proposalincludes $10 billion for child care. Previous measures have stalled, including a $50 billion bill to shore up what is now a crumbling industry. In a survey conducted by the National Association for the Education of Young Children, two in five of the country’s licensed providers said they would have to close permanently without government assistance. That means that when work-from-home ends, parents will have even fewer options.
Almost half of employers surveyed by the U.S. Chamber of Commerce this fall said they’d likely provide more assistance to employees if the government gave them an incentive to do so. There’s a sliver of hope with the new administration. President-elect Joe Biden named Heather Boushey, a longtime advocate of affordable child care who runs the Washington Center for Equitable Growth, to the White House Council of Economic Advisers. And Biden and Vice President-elect Kamala Harris have proposed a $775 billion, 10-year plan to fund universal preschool, the building of new child-care facilities, paid family leave, and higher salaries for child-care workers. But the likelihood of any of that passing relies on Democrats securing a Senate majority.
Republicans tend to favor expanding tax credits over subsidizing child-care centers, so as not to penalize stay-at-home parents. Critics say such policies largely benefit the wealthy.
Mason, of the Institute for Women’s Policy Research, is hoping to bypass gridlock and apathy at the federal level by winning in smaller jurisdictions first. She sees it as similar to the battle to legalize same-sex marriage, which was waged city by city, state by state, before the Supreme Court weighed in.
It’s starting already. In Massachusetts, Lauren Birchfield Kennedy, co-founder of Neighborhood Villages Inc., is part of a group working on a statewide child-care-for-all law. Her hope is that it will cover infants to kids as old as 13 and that no family will pay more than 7% of its income. Drafters are still working out arguably the trickiest part of the puzzle: how it will be funded. “Whatever that upfront sticker price is, economic research demonstrates that this program will pay for [itself],” Kennedy says. The group aims to introduce the policy in 2021.
Voters in left-leaning cities have demonstrated an appetite for government-funded child care. Democrat Bill de Blasio was elected New York City mayor in 2013 after pledging to create a system of universal pre-K. (A promise he made good on.) And this November, voters in the Oregon county that includes Portland overwhelmingly supported a ballot initiative for free preschool for 3- and 4-year-olds. The program, funded with a tax on high-wage earners, also mandates better pay for child-care workers, putting them on par with teachers—a bold attempt to strike at one of the child-care deficit’s root causes.
Even in a city as liberal as Portland, wrangling sufficient votes for the measure took work, says Lydia Kiesling, a local freelance writer who volunteered with a group called Universal Preschool Now. While collecting signatures to get the initiative on the ballot, she ran into some conservative attitudes about the role of women. “There were people who just disagree with the principle of universal preschool,” she says. “They think kids shouldn’t go to preschool; they should be with their parents. I don’t know how much you can convince people like that.”
Portland’s most prominent newspaper, the Oregonian, came out against the plan, saying it was too costly on a per-student basis and that the county lacked the expertise to put it into effect.
The people felt differently: It passed with 64.5% of the vote. Kiesling, whose own children are 3 and 6, won’t benefit from the program because by the time it’s rolled out they’ll be too old. A few months back she found herself navigating a maze many American parents have found themselves stuck in this year: Her kids’ preschool, which had been around since the 1970s, shut its doors in August because not enough children came back when it reopened the month prior. Its website says the closure is temporary, but Kiesling isn’t holding out much hope: “The longer they are out of commission, the less likely it is they can reopen.”