Affordable Childcare… in the United States

 

We certainly do not have remotely the childcare we need. There is just an American aversion to general and necessary governmental benefits. Consistent with the “American war on socialism” – where “socialism” is mis-defined as anything that helps those in the middle and the bottom of the economic ladder at the expense of the rich – the United States is the only developed country that lacks universal healthcare and access to affordable childcare. As the issue is being debated in Congress, the notion of federally mandated paid leave for medical and family necessities, often offshoots of childcare, was deleted from the House version of the Build Back Better bill under pressure from Democratic Senator (WVa) Joe Manchin. There is some pressure among Senate Democrats to restore some lesser version as the bill faces Senate review. Maybe.

Let me be clear, “socialism” simply means – where the government owns and controls the bulk of the assets of production: factories, farms, sometimes housing as well as other sources of wealth building. Even though the “social” root word is used in “social programs,” these citizen benefits are not hallmark of “socialism.” If you applied the mis-definition of “socialism,” you would wind up eliminating public education, Medicare and minimum wage policies. 

Further, the notion that all government spending creates destructive deficits is another mythology that needs to die hard and forever. When you hire lots of soldiers, which may indeed be a necessity, that spending is different from investing in improving American productivity and competitiveness. Hiring military personnel is a cost, one that does not carry an internal rate of return. It’s a similar difference between a consumer buying a car versus buying stock. Making a highway smoother and more traffic efficient makes moving goods less expensive, using less fossil fuel in the process. Faster movement of goods requires fewer trucker man-hours, less wear and tear on trucks and lower consumption of diesel fuel. In short, money is saved. But it’s not just concrete, steel and copper wiring that make a productivity difference.

For example, when you upgrade the quality of education, making higher quality accessible for free or more affordable, the resulting upgrade to the work force increases the value of labor, their earning power (which is taxed) and national competitiveness… closer to the cutting edge to the America we all knew. We have some of the highest tuition, reflected by the highest level of student debt (inflation corrected), in our nation’s history. That debt level is slamming our rising generations, already facing housing inflation, just as they begin their careers.

Because of the increase in productivity, the multi-trillion-dollar infrastructure bills, according to the Congressional Budget Office, will not add more than $160 billion (probably a lot less if productivity goals are reached) to our deficit, while the 2017 corporate tax cut has generated a true trillion dollar per year deficit without the promised increase in higher paying jobs. One of the most hotly contested aspects of the infrastructure bills is still childcare support. The October 6th New York Times tells us that “Rich countries contribute an average of $14,000 per year for a toddler’s care, compared with $500 in the U.S.” A tax credit does not do the trick.

Yet childcare costs in the United States are so high that they often eat up all or most of the extra income generated by a single parent or when a spouse elects to enter the workforce. Thus, millions of productive workers are resigning from jobs and staying home – rather than adding to the nation’s workforce productivity – to care for younger children. Jobs just go begging. Kathleen Davis, writing for the November 22nd FastCompany.com, explains: 

“The childcare crisis in America isn’t new. Parents in the U.S. have always known that childcare—especially from birth to Kindergarten—is expensive, hard to find, and a frequent source of stress… The average cost of full-time childcare is higher than in-state college tuition in more than 30 states, which means that childcare often costs more than many parents make. The pandemic has also made childcare more difficult to find as many childcare centers (one in four by some estimates) have gone out of business in the last two years.

“Parents have always juggled finding care for their school-age kids for the summer months, or school breaks, or even just the three hours between the end of the school day and the end of the workday. It’s always been a precarious balancing act, and those with less money and fewer resources struggle the most… But until the pandemic hit, it was viewed by many as a personal problem. Once schools shut down and childcare centers shuttered, our unsustainable childcare system finally became an urgent part of national conversation. Now, as we navigate what the future will look like, we have the opportunity to rethink and rebuild this broken system…

“With labor shortages across industries, [Wendy Chun-Hoon, director of the Women’s Bureau of the Department of Labor] laid out how a lack of childcare impacted mothers’ workforce participation. ‘It’s still 2.8 million women who are not back in the labor force. Over a million fewer moms with kids who are under 13, are employed now as opposed to pre-pandemic,’ said Chun-Hoon.

“[Elliot Haspel, an education policy expert and author of Crawling Behind: America’s Childcare Crisis and How to Fix it.] agreed. ‘Childcare truly is infrastructure. It is the sort of industry that underpins every other industry. Women with children under age six made up 10% of the workforce before the pandemic, but accounted for 22% of the jobs during the crisis,’ he explained. ‘The ability to find quality childcare is likely to be a determining factor for employment. We know that the lack of childcare is holding the economy back, and a lot of that’s happening because the childcare industry itself is in crisis.’

“Private sector solutions such as onsite daycare aren’t enough, both Chun-Hoon and Haspel agreed. Quality childcare is difficult and expensive to set up—and even if it’s put into place it only serves a small number of people and a small portion of needs. Also care, Haspel argues, shouldn’t be a job-linked benefit… Both agree that public funding is the best solution, and that true care infrastructure goes well beyond childcare for kids under five years old.”

“The cause of the crisis within the childcare industry, Haspel says, is decades of underinvestment. The real cost of care is so high that childcare can’t easily raise wages to compete with other industries, which means there are fewer spots for children, since centers have to keep a low child-to-teacher ratio. Fewer spots means parents are left without options and can’t work themselves. ‘We have to start by stabilizing the childcare industry with public funding before we do just about anything else,’ he says.” Davis. 

The plummeting of US investment in fixing and upgrading infrastructure, funding needed social programs, began in the 1970s, as the Vietnam War deficits caused Congress to kick that infrastructure can down the road. Even if these new infrastructure bills pass (and part one has), we will still be trillions of dollars short of what we really need to bring us up to where we should be. Even in hard building, the America Society of Civil Engineers believes it would take $6 trillion of investment over the next decade to fix the problem, $4 trillion plus more than what Congress has passed and is considering. And that’s without addressing the social engineering we so desperately need.

I’m Peter Dekom, and it so strange for the United States to have become an outlier among richer nations in its willingness to invest in itself.