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 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 the 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 percent of their pre-pandemic staffing levels — and overall, the economy is back to nearly 97 percent — child care is still stuck more than 12 percent 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. This isn’t a pandemic artifact. It’s the new and worsening normal, a sector in tailspin with the hard ground rapidly onrushing.
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 percent or more of program budgets. So even though parents are paying through the nose, the true cost of care — the cost where programs are operating comfortably and compensating their staff well — 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.”
Child care also faces a demographic time bomb. The sector has a substantial number of older educators: one-quarter of center teachers and nearly 40 percent of family child-care providers are over the age of 50. Already, a retirement wave among family child-care providers helped drive the loss of over half the nation’s small home-based programs between 2005 and 2017.
Young workers are not lining up to replace the older ones. And why would they? Who can, with a straight face, tell a high school or college senior that they should consider going into a profession built on poverty wages? Where there are essentially no opportunities for advancement? While there will probably remain an important pool of immigrant workers, it is not nearly large enough to sustain the sector, nor should immigrant women be asked to continually subsidize the system by accepting miserly pay.
This is an issue that hits everywhere and everyone. For all the demeaning and manipulative talk of how needing child care is somehow an “elite preference,” the child-care crisis is slamming communities from West Virginia to Idaho to Alaska. 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. What happens only in pockets — parents turning to unscrupulous actors or even leaving children home alone — will become the forced norm.
It doesn’t have to go this way. The Democrats’ reconciliation package contains robust public funding that would cap the amount parents pay while ensuring a living wage for all child-care practitioners. States would have to put in place wage scales that walked staff toward pay parity with their elementary school counterparts. Such moves would make child-care jobs more desirable, increase supply, improve the quality of care and lift a financial boulder off families’ backs. This isn’t speculation: public pre-K teachers who are paid like other teachers leave at vastly lower rates than their peers, and places such as Washington that implemented well-funded pre-K programs enjoyed immediate spikes in maternal labor force rates. Child care is the rare policy that concretely and swiftly pays for itself.
The cupboard of alternatives is full of poisons and empty jars. Raising adult-to-child ratios would mean fewer required staff, but carries awful trade-offs in terms of safety and quality; do we want one teacher caring for 10 1-year-olds? Regulatory reform sounds good, but the fact is regulations are not causing broken economics; as far back as 1989 — hardly an era of overregulation — the National Child Care Staffing Study highlighted persistently low educator wages and high turnover.
If the social programs bill ultimately fails or the child-care funding is severely curtailed, it will be incumbent on states to stand in the gap. State funding on child care is minuscule. Combined, states spend around $12 billion a year on child care, compared with $344 billion for K-12 education. Some places have been stepping up recently: New Mexico is investing big sums in compensation for certain early educators, while D.C. passed a budget that will soon institute full pay parity. More states would need to follow suit, but it’s a questionable backup plan.
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. That precarious equation has now been irrevocably blown up. America is headed into the child-care wilderness. 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.