New Research from Roosevelt Institute Shows How Decline in Care Workforce Hurts the Economy

Fresh analysis from Alí R. Bustamante details impact of care workforce shortage

August 17, 2023
Ariela Weinberger
(212) 444-9130

New York, NY – A new brief by the Roosevelt Institute’s Worker Power and Economic Security Program Deputy Director Alí R. Bustamante shows that more than 230,000 care workers are still missing from the labor market compared with pre-pandemic employment levels.

The decline in care work employment since the COVID-19 pandemic has dragged down productivity and labor force participation, which are primary drivers of economic growth.

These findings come as the $24 billion in federal pandemic relief funds to support childcare programs is set to expire at the end of September, underscoring the need for lawmakers to invest in care work to meet the needs of American families in today’s economy. The brief also comes a year after President Biden signed the Inflation Reduction Act (IRA) into law, which ultimately did not include the care sector investments initially proposed during negotiations. An industrial policy of care work can address the social challenges associated with limited care access and poor compensation of care workers.

“As implementation of the IRA continues, care work still deserves to be one of the administration’s primary issues. In the absence of an industrial policy that bolsters care work, investments in various industries and the broader economy will be severely compromised, as will the economic security of care workers,” Bustamante wrote in a blog post.

Top takeaways from the report include:

  • More than 200,000 workers have left childcare work (17 percent decline from pre-pandemic levels), and nearly 100,000 have left work as care aides and assistants (2 percent decline from pre-pandemic levels).
  • Care work employment declines occurred despite above-average wage growth and large gains in women’s employment outside of care work. The median weekly earnings of childcare workers climbed from $400 in January 2019 to $786 in the summer of 2022 and recently declined to $617.
  • Policymakers’ reliance on market dynamics to shape the care work industry has led to a sector characterized by low wages and a chronic shortage of workers. That’s why the federal government should implement an industrial policy that grows the economy by enabling more labor force participation with care work investments.