Economic Case for Child Care

by Daniel VanderMolen, Project Coordinator

Having spent time working in both the workforce development sector and child care system over the past ten years, one theme that I’ve seen play out repeatedly is just how interrelated those two industries are. When I was first starting out as financial coach, supporting individuals who were either unemployed or unemployed, one of the first barriers I had to address with almost all my participants was how to navigate looking for work and locating care at the same time. Without child care, the parents I counseled couldn’t go to work. If they couldn’t go to work, they weren’t able to pay for child care. It was a challenging problem in the best of times, and this was all before a global pandemic decimated business, upended our daily lives, and completely changed our relationship with work.

According to the June 2021 jobs report, more than 9.5 million people were out of work last month. Juxtapose that with data from the same report showing that there were about 9.2 million job openings simultaneously throughout the country, and you’re presented with a very important question: Why aren’t we able to fill those jobs? The prevailing thought seems to be that three of the primary reasons people are reluctant to return to work include the lack of affordable child care options, ongoing fears of contracting COVID, and the financial impact of enhanced unemployment benefits. That final possibility, the enhanced unemployment benefits, is the low-hanging fruit of the group and seems to be getting the media attention. However, a recent survey suggests not all economists are convinced those benefits are a major disincentive to return to work, leaving us to consider the other two options as the primary culprit.

As vaccination numbers stagnate and daily reported cases of infection start to climb again, it’s not hard to see why someone might be reluctant to take a position that increases their likelihood of getting sick. Yet, although that variable will be a factor for as long as the disease has a key foothold in the country, recently experts have started hone in on access to child care as a key reason why people are not returning to the workplace.

As a working parent, with a full-time employed spouse, and two young children at home who were fully virtual most of the past sixteen months, I can tell you firsthand how what an albatross access to child care can be for daily survival. And we definitely weren’t along in that predicament. According to a 2019 report that came out just prior to the pandemic, about 54 percent of children birth to 5 in the U.S. are in some type of non-parental care for at least 10 hours every week. So, when COVID hit, destabilizing the already precarious system of early care, the effects were felt far and wide. Personally, were able to make fumble our way through the pandemic with support of empathetic employers and access to remote work, but not everyone was that fortunate.

It’s estimated that globally 114 million people lost their jobs due to the pandemic in 2020 alone. Of that group, women were hit disproportionately hard, accounting for a 5 percent loss, versus a 3.9 percent loss for men. There are several reasons for this disparity, with one of the main factors being that women tend to carry a disproportionate percentage of child care responsibilities for families. Of people currently working part-time due to child care problems, a whopping 94% are women. That’s a huge number, the problem isn’t going away, and it’s unstainable.

So, what does that mean for that mean for the economy as a whole as a whole? The International Labour Organization (ILO) estimates that those 114 million lost jobs in 2020 lead to approximately $3.7 trillion dollars in lost labor income. In just one year, women lost $800 billion in income globally. In the United States specifically, about 50 percent of working adults say that effects of COVID will make it more difficult to reach their long-term financial goals, with 44 percent reporting it will take three years or more to get back to where they were before the pandemic. This impact is felt even more acutely by low-income families, exasperating an already widening wealth gap and further devastating people who were already struggling even before the pandemic hit.

As we turn an eye to the future and determine what our new normal will look, it’s becoming more and more evident that the availability of child care is going to be a deciding factor for when, or if, people return to work. The health our economy depends on a workforce buoyed by good, sustainable jobs. To access those jobs, people need safe, affordable, high quality child care. It’s as simple as that.

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