How to fix America’s labor shortage? Provide decent child care.


How bad is the American child care crisis? Terrifying stories have emerged of parents queuing up overnight or sleeping in parking lots hoping to grab daycare or preschool places. For the stressed parents of older children, shortages of lifeguards and camp counselors have increased the stress this summer. And this past week, Johns Hopkins University’s Center for Talented Youth abruptly canceled its residential program in Pennsylvania.

The common denominator is a lack of public investment that is causing huge scarcity in the child care sector. This scarcity in turn prevents parents – especially mothers – from fully participating in the labor force, which exacerbates the labor shortage.

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Even before the pandemic, the United States ranked 32nd out of 40 industrialized countries for the employment of mothers of young children, and below average for those with minor children of any age.

The national unemployment rate is 3.6 percent, with several states reaching the lows of all time. There are almost two jobs for every unemployed individual. While this is excellent news for job seekers, the impact across the country is being felt as airlines and other businesses struggle to retain sufficient staff and supply chain disruptions keep the inflation fire going.

All the while, a massive pool of prospective workers is being set aside by an inadequate and expensive childcare system. Given the desperate need for more workers, this means that there is a key tool that policymakers have not yet exploited: an investment in childcare.

The pandemic shattered a childcare sector that was already fragile. The most recent available data show that almost 16,000 childcare programs were permanently closed between December 2019 and March 2021, and the number has almost certainly grown. Even when apps could stay open, many had to scale down.

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Although parents pay large fees, programs may not offer competitive compensation due to extraordinarily high fixed costs resulting from necessarily low child-to-adult ratios. Childminders earn a median wage of about $ 13 per hour. Public funding is greedy – to invest only about $ 1,500 per year per child under the age of 5 (by comparison, the average expenditure per child in public schools is more than $ 13,000).

A consequence of program and classroom closures? Locks cannot be found, and therefore parents, especially mothers, leave the workforce. “The estimated number of families affected by reduced capacity at child care centers equates to just over half of the decline in the workforce since covid began,” says a March report by Wells Fargo economists.

Apart from the pandemic, the report continues, “if the [labor force] “The participation rate of mothers with young children can simply be increased to match the participation rate of women with school-going children – no matter that of men – about 1 million more workers will be in the workforce today.”

Even when parents are able to stay employed, child care interruptions take a toll on attendance and thus business productivity and customer service. For example, a 2019 report by the Council for a Strong America noted that “nearly two-thirds of parents who face childcare problems report leaving work early, and more than half report being distracted or full-time work is lacking. “

There is good reason to think that permanent public investment in childcare will provide the economy with a shock of adrenaline, which will alleviate scarcity and inflation, while increasing productivity and reducing deficits. A team of economists recently released a paper predicting that even a “narrow” policy to fully fund the current choice-based subsidy system would result in a nearly 5 percent increase in full-time maternity employment. The largest increase – nearly 13 percent – would be seen in mothers from low-income households.

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These conclusions are consistent with other research showing broad economic benefits of government investments in childcare.

While some companies are experimenting to offer childcare benefits, it is clear that public funding is needed. Linking childcare to a work-related benefit repeats a horrific aspect of U.S. health insurance with the added twist of a job loss that separates young children from their beloved caregivers. And companies do not have the funds to address the problem in a system that is already unable to keep up with demand. The nation should expect no more from corporations to cover child care than ask them to cover first degree: Both are social goods that must roll up tax revenue to fund a functional system from which everyone can benefit.

There are many reasons why lawmakers should prioritize childcare funding, especially as congressional Democrats take a final step in implementing part of President Biden’s legislative agenda ahead of the midterm elections. Affordable, high-quality child care promotes child development, serves as a measure against poverty and supports family stability. Especially in this inflationary season, childcare costs that exceed average inflation suck up funds that could otherwise compensate for higher gas and food prices, to say nothing of helping families move forward.

The overthrow of Roe v. Wade made these factors all the more striking. Perhaps no reason is more economically urgent, however, than to ensure that a lack of childcare does not hold back anyone who wants to work – especially not when the United States needs every worker who can get it.

Elliot Haspel is the senior program officer for early childhood education at the Robins Foundation and the author of “Crawling Behind: America’s Childcare Crisis and How to Fix It”

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