For the sake of the economy, child care must be built back better
It’s time to accept that America’s child care market is fundamentally broken. With costs higher than families can comfortably bear, quality often lacking and a system balanced on the backs of an abysmally compensated female workforce, our child care system cries out for a bipartisan public policy solution.
The Build Back Better Act that Congress is working on is the opportunity and fix we need for our system.
In the United States, over 15 million children under age six require weekly child care due to the workforce participation of their parents. But, finding this care affordably is a nationwide challenge. This lack of accessible, affordable care has negative career impacts on many families, affecting parents’ earning and promotion potential, the hours they can work and even the educational opportunities they can pursue.
Mothers often bear the primary burden of parental caregiving. This makes access to child care a particular obstacle to women’s ability to remain and progress in the workplace. This may explain why workforce participation rates peak at only 76 percent for mothers with school-aged children (ages six to 17) and dip to less than 60 percent among those with infants.
According to the University of Oregon’s RAPID-EC survey, more than one in three female caregivers were forced to leave the workforce or reduce their work hours following the onset of the COVID-19 pandemic. This caused the female workforce participation to fall to 57 percent — its lowest since 1988. In early 2021, the total number of women who have left the workforce since the start of the pandemic reached over 2.3 million. McKinsey and Oxford Economics estimates that the return to pre-pandemic employment levels for women will take 18 months longer than it will for men.
And, child care’s burdens extend beyond family budgets and into the national economy. It is estimated that inadequate child care costs working parents $37 billion a year in lost income, while businesses lose more than $13 billion a year in lost productivity due to lower outputs, hiring costs and work disruptions. When child care and schools closed during the pandemic, the estimated cost to the economy was $700 billion in lost revenue and productivity — equivalent to 3.5 percent of the national gross domestic product (GDP).
The pandemic shed new light on the intertwined nature of child care and economic stability. To address the loss of economic productivity and rebuild our current workforce, policymakers must first consider how to make child care more affordable for working families. In a survey by the Center for American Progress, 68 percent of respondents agreed that public policy should be designed to help families better afford the cost of care.
With this growing awareness, the Build Back Better Act provides a unique opportunity to reimagine the American childcare and education system. The act includes a historic $400 billion investment in early childhood, which would fund both universal pre-kindergarten for three-and-four-year-olds and improve affordability, quality and pay within the child care industry. If enacted, the proposal would cap child care payments at no more than 7 percent of families’ annual income (up to 250 percent of state median income), dramatically reducing child care costs for the majority of Americans. Using a sliding fee scale that would save most American families hundreds of dollars a month, copayments would be based on family income and cover all eligible children in the household.
An investment of this magnitude has the potential to fundamentally alter the way families and employers function with childcare and education systems. As we establish a new normal, Build Back Better has the potential to not only create a stronger early childhood system but a stronger economy. Those are goals we can all support.
Dr. Javaid Siddiqi is president and CEO of the Hunt Institute.