Wednesday, January 4, 2017

The Hidden Politics of Childcare

Having a child in the United States has never been more expensive – measuring childcare costs in hard dollars or as a percentage of income. The average hovers just below 30% of average household income and around 85% of what a minimum wage worker earns. For folks making enough where tax planning makes a difference, being able to deduct childcare costs is an important incentive/benefit. For those whose incomes are very low or have fallen well into lower tax brackets, deductibility is largely irrelevant. Tax credits and school vouchers are incentives for those who (a) know how to use them, (b) have needs that are directly benefited by such incentives and (c) have sufficient incomes to make those benefits matter. Next.
One of the most important determinants of birth rates is the cultural attitude from the relevant social segment regarding the cost of what their peer group calls “proper” childcare. The more it costs in this social segment to raise a child, the fewer children are likely to be born. If your cultural environment does not factor in external childcare costs in the decision as to whether or not to have a child, the more likely the birth rate will remain stable or even rise for that cohort.
So it does merit examining the rather upwardly-tending cost of childcare in the United States. The most expensive state, according to Eric Reed at (December 26th), is Massachusetts, where the average child care costs averages $21,095 per year (which can rise to $31,827 if a family opts to avoid daycare – which itself averages $13,208 per year – and tend to junior from home).
According to Reed: “Child care in Massachusetts costs 33 percent of the average household income, and 113 percent of a minimum wage worker's pay. This state is the most expensive, on average, in the country one of the states with the biggest gap between what average and lower-income workers can afford in terms of childcare.” Simply put, a minimum wage worker cannot afford average childcare in Massachusetts. Might as well stay home and rely on welfare.
North Dakota, on the other hand, has the most affordable average childcare cost in the land: $11,886 per annum. Daycare is a reasonable $7,409/year while in-home childcare still hits a significant but closer-to-affordability $27,667 per year. True, wage rates there are lower, but then most costs in North Dakota are lower than what most of the rest of the country pays. Reed notes: “This is, on average, the cheapest state in the country for child care. Childcare in North Dakota costs 20 percent of the average household income, and 79 percent of a minimum wage worker's pay. This makes [the state] one of the most competitive states for working parents, as earnings can still meaningfully outweigh costs.”
But these are just numbers. This does not measure the psychological toll on those who just cannot spend what they think they need to spend on their kids. It gets tougher when junior heads off to college, an issue I have blogged about so much, it does not merit repeating here. 59% of Millennials have at least some college, reflecting the bare necessity of post-high school education in a fiercely competitive job market. That, of course, means that 59% of families with Millennials have grappled with college costs. Bad numbers reflecting a downward pressure on having children. The Z-generation will have even tougher numbers.
But paying for proper childcare tends to be a priority value only among those in the middle or higher on the economic ladder. They’ve been doing that for years. So as earnings pressures on middle class or recently middle class (and now downwardly mobile) families mount, as real wages continue to stagnate under our new “gig” and more-competitive-wage environment, the birth rate for those used to spending that childcare money has plunged as reflected in my recent The 0.7 Percent Solution blog. For the most part, this is evidenced in traditional white families.
For minorities, who have lived at the bottom of the economic ladders, childcare is handled by extended families with the elderly taking on that role, welfare of one form or another, or by simply not providing that care much at all. As my recent blog points out, their birth rates remain much higher than those of their old-world white traditionalist counterparts.
All of which is essential in understanding precisely how desperate that traditional white voting bloc has become. They know their numbers are declining because they cannot afford to have more kids… but with fewer children, the relative number of white traditionalists is falling like a stone tossed off of a high cliff.
Look at the world from their perspective. Not only are most of them unlikely to live a lifestyle equal or better than that of their parents, too many of them are simply unable to afford to take care of the children at what their value system tells them is the bare minimum level of financial support. Ouch! These trends explain why so many traditional white voters, feeling very victimized by the very system they have supported for decades, are increasingly hell-bent on securing (or re-securing) their control of that system, regardless of the fairness of their dominance over minorities they wish to disenfranchise. This trend is a massive threat to our democratic system of government, so we damned-well better address the underlying issues.
The above amalgamation of pain is just one more way of saying, “It’s the economy, stupid!” to all those politicians with fancy “values of a fair and just society” programs that have become their national priorities. Values which I myself embrace. Whether this stems from a political Maslovian perspective (see Maslow's hierarchy of needs reflected in the above graphic pyramid) or some deep political reality, successful politicians cater to their respective constituents by mirroring the priorities of their voters. As more people fall out of the middle class to “less,” this constituency is only going to get angrier and more desperate.
As callous as this may sound, while “values of a fair and just society” are valid political goals, unless the deeper economic issues are addressed first, solicitations based on pure “goodness” and “fairness” will fall on relatively deaf ears. Likewise, national security values rise with fears of being attacked and killed, real or not.
For political parties trying to figure out their next move, they must first consider their likely constituents’ fears and priorities before substituting those values that they might prefer to prioritize. For most seeking election, there is nothing wrong with fighting for what they deeply believe in, but to get that cherished office, there really is a pragmatic need to place those special issues in the right order of what their constituents really want. Liberal elites, take heed. Hillary Clinton may have lost the presidency for myriad reasons, but prime amongst them was a failure to present a clear and prioritized path to address the economic needs of a constituency they once dominated.
I’m Peter Dekom, and I am trying to “tell it like it is.”

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