There are two truths universally acknowledged in the scramble for child care in the United States. The cost is prohibitive for most parents who need it — if they can find slots. And it pays so little that even people who love caring for children can’t afford to do it.
The solution? Make child care more expensive.
Here’s the thing: the true costs of child care are currently hidden. Government agencies supplement workers’ paltry wages with welfare programs; businesses shoulder their share in the form of disrupted operations and lost worker productivity. This off-ledger accounting obscures the fact that society as a whole needs the child-care system to function.
That means parents shouldn’t be the only ones paying up front. When businesses and governments pay their share directly, they are better off, as are parents and early childhood educators. Witness the District of Columbia. It has taxed its richest citizens since 2022 to boost pay for early childhood educators. Early results suggest that bump enables the city’s child-care facilities to compete for workers and keeps teachers in the profession.
Child-care workers’ wages are not fair by any standard. One example: In 2021, child-care workers in Pennsylvania made, on average, less than retail clerks, hair stylists and landscapers. The state is no outlier. The Bureau of Labor Statistics reports that the 2021 median pay for child-care workers was $27,490 annually, or a mere $13.22 an hour. And wages are generally lower for caregivers who work with younger children.
Small wonder child-care facilities are struggling to return staffing to pre-pandemic levels. Why would someone take on the physically draining job of loving someone else’s child and catching all their colds for poverty wages when they could earn more doing just about anything else?
For a temporary, low-cost fix, Congress could double the number of visas available to low-skill workers or create a special visa category for child-care workers. But wages that low guarantee that even if people enter the field, they won’t stay in it.
The bigger problem is the gulf between what parents can pay and what child-care workers need to make. To the extent that gap is filled, it’s done so indirectly and in ways that create new problems.
State governments shoulder some costs even when they don’t explicitly pay child-care providers — in the shape of benefits. Almost two-thirds of Pennsylvania early childhood educators had applied for public benefits sometime in the previous two years, found a March report from Strong Start PA. About 1 in 5 were receiving food assistance; 21 percent were on Medicaid.
Nationwide, the norm is even higher. Between 2014 and 2016, more than half of the child-care workforce received some sort of benefit, according to an analysis from the University of California at Berkeley’s Center for the Study of Child Care Employment, be that the federal earned income tax credit, Medicaid, Children’s Health Insurance Program, Supplemental Nutrition Assistance or Temporary Assistance for Needy Families.
Surely, it would be more dignified and less bureaucratic for those workers to be better paid. State and local governments that simply subsidized child care at much higher levels could congratulate themselves for creating good jobs that support the economy.
That government funding should come from a child-care tax on businesses. As the U.S. Chamber of Commerce Foundation put it bluntly in a 2022 guide for companies, “You are already paying for the lack of childcare” whether in the form of missed shifts or the lost productivity of experienced women who can’t afford to return from maternity leave.
In 2020 and 2021, the foundation estimated that annual loss of economic activity due to insufficient child-care infrastructure could be as high as $9.39 billion in Texas and $3.47 billion in Pennsylvania. Those figures were drawn from 2019 data — before the pandemic clocked the child-care industry. That’s enough to give each of 30,000 Pennsylvania early educators a $115,667 raise.
Businesses with the scale to do so could recoup some of a child-care levy by starting their own on-site day cares. Outdoor outfitter Patagonia, which opened a child-care center at its headquarters in 1983, sees the facility as key to retaining talented employees. A decade later, Goldman Sachs started a backup day-care center in its New York office, to ensure employees could make it to work even when their regular arrangements fell through. The firm now operates full-time care programs at its offices around the world.
Meanwhile, lawmakers should do everything possible to make it easier for parents to pay caregivers what they’re worth. Lifting the hilariously outdated maximum of $5,000 that workers can set aside pretax to pay for child-care costs would be a help. The figure was set in 1986 and is the same nationally despite huge variations in costs.
But all these workarounds avoid the real issue. Everyone who benefits from a robust child-care system needs to pay their way, rather than letting parents, caregivers, and most of all, children, struggle on alone.