Care at Scale: Building Back Better Requires Big, Well-Structured Childcare Investments

June 9, 2021

To “build back better” means creating a stronger and more sustainable economy than we had in March 2020. To do so, we must finally heed the years of warnings from economists and policymakers that gender disparities in care work are a drag on the whole economy, a fact that the last year has made even more painfully visible. We must help parents—especially mothers—enter, reenter, and/or stay in the workforce.

Affordable, accessible childcare is an essential pillar of that vision, as the American Jobs Plan, American Family Plan, and numerous congressional proposals have explicitly recognized. But the key to these policies’ success: ensuring that their scale and structure meet the challenge.

The need for an overhaul of our childcare system long preceded this pandemic. In 2019, the employment rate of women with children under 6 reached its highest point, even while the women’s employment rate overall had been declining since its peak in 2000. (Regardless of whether or not they have young children, women’s employment rate is lower than men’s.) And even at their employment peak and adjusting for age, the employment rate of women with young children was 28 percentage points lower than that of men with young children. In May 2020, Janet Yellen reported that prior to the pandemic, increasing women’s labor force participation rate to equal men’s could have raised American GDP by as much as 5 percent.

The pandemic exacerbated the problem. While there has been debate in recent weeks about a study that found that job loss was not concentrated among parents, there is significant evidence that the inadequate childcare supply has constrained mothers’ relationship to the labor market in the last year. After childcare options closed in March, a national survey found that 20 percent of parents left the workforce or reduced their hours on account of lost childcare. That same survey found that over a quarter of women who lost their jobs during the pandemic believed lack of childcare was behind the loss. Notably, Black women were significantly more likely to report reduced hours or lost jobs due to lack of childcare. Parents who have been able to keep their jobs report losing an average of 16 working hours a week due to lost childcare. 

In the last few months, policymakers have offered a range of proposals responding to these alarming numbers and an honest assessment of our, at best, patchy childcare system. President Biden’s American Families Plan calls for a $225 billion investment to create a robust childcare subsidy system, and the American Jobs Plan includes another $25 billion to build out childcare infrastructure; Senator Elizabeth Warren (D-MA) has proposed a far larger $700 billion universal childcare package. 

An investment at the scale of Senator Warren’s proposal is appropriate, because the inadequacy of the US childcare system can be directly traced to the lack of funding within it. Long and deeply held beliefs that childcare is best provided by mothers, is or should be unpaid, and is provided in the home have left families with only expensive childcare options. Private providers keep wages low to keep prices as low as possible, but those prices still strain the average family’s budget. As a result, too many childcare providers earn poverty wages. Roughly half of childcare workers (disproportionately women of color) are paid so little that they must rely on government assistance—food stamps, Medicaid, or other subsidies

Most of the legislative proposals on the table recognize that the broken childcare industry requires not just a large-scale investment but significant restructuring. Increased federal investment into the system is an opportunity to lower costs for families and ensure that childcare is available in places and at hours families have struggled to find care. Critically, federal investment is also an opportunity to raise wages for caregivers and empower them to organize. By centering these priorities, policymakers can craft childcare legislation with visible and transparent benefits that enhance consumers’ and workers’ power—keys to any well-structured progressive policy. 

But, as we warned last week, well-structured progressive policies must also guard against corporate exploitation. A badly needed infusion of cash into the chronically underfunded childcare system can change parents’ and childcare providers’ lives. Without proper guardrails, it can also create an opportunity for unscrupulous corporations to enter the industry and use the new funding to seek out profits. Federal childcare subsidies must prioritize facilities that are public, nonprofit, or women- or minority-owned small businesses.

As so many have pointed out, the pandemic has made visible (both through lost employees and children’s cries in the background of Zoom meetings) what working parents already knew: The inadequate childcare system makes parents’ connection to the labor market fragile, easily broken by a family or worldwide crisis. Rebuilding our economy to be more resilient than before requires rectifying this long-standing problem.