Investing in Care: Exploring An Industrial Strategy for Care Work

Introduction

As the Biden administration’s first term draws to a close, the care agenda remains one gaping piece of unfinished business. The administration’s original Build Back Better proposal included investments to provide universal preschool for three- and four-year-olds, reduce costs and expand access to childcare for younger children, and expand access to home care services for seniors and people with disabilities. All of these were left on the cutting room floor during negotiations over the Inflation Reduction Act (IRA) (White House n.d.).

In the year and a half since the passage of the IRA, much of the conversation about care policy has been around how federal investments in care work can bolster the industrial policies at the center of the IRA, the CHIPS and Science Act, and the Infrastructure Investment and Jobs Act. Care advocates, employers, and policymakers have all pointed out that care is as essential to a functioning and expanding workforce as roads and bridges; both allow workers to participate in the market (Zhavoronkova and Coffey 2023; Poo 2022). In response, the Commerce Department required that companies receiving CHIPS funds have a plan to provide childcare to all their workers (White House 2023). As welcome as this sort of innovation is, it is not a stand-in for the comprehensive investments in the care industries that are still required. 

This brief offers an approach for thinking about care investments the next time there is an opportunity for major care legislation. Building on prior work by Roosevelt authors, this brief argues for an industrial strategy—defined as “any policy that encourages resources to shift from one industry to another”—for the care sector (Estevez 2023; Tucker and Sterling 2021). Moreover, it proposes a progressive approach to industrial care strategy, insisting that the government not only foster the growth of care industries but do so in ways that advance progressive social and economic goals. After digging into why this approach is necessary for our economy, this brief examines the many existing levers available for a consciously structured industrial strategy for care, including some that both federal and state governments experimented with during the COVID-19 pandemic. This brief ends by considering the best form of industrial strategy intervention given the specific challenges of the care industries, as well as what standards and guardrails need to be in place on such policies. 

Care workers—childcare workers, home health aides, and others providing direct care for the most vulnerable in our society—make up roughly 17 percent of the US workforce (Wedenoja 2023). But these 24.1 million paid workers do not include unpaid care workers who have either stepped out of the paid labor force or reduced their paid hours to provide care for free to relatives and friends (Wedenoja 2023). The Boston Consulting Group estimates that the entirety of the US care economy, paid and unpaid, is up to $6 trillion (Kos, DasGupta, et al. 2022).

This sizable and growing sector of the economy must be understood as a set of vital industries that the government can and should foster—a sector that requires an industrial policy of its own.

While recent industrial strategy investments have neglected care, market-shaping federal investments in care industries are far from novel. As noted in previous Roosevelt reports, even at moments when the US has understood itself as not practicing industrial policy, the government’s policy decisions were actively shaping markets (Tucker and Sterling 2021; Hughes and Spiegler 2023). Arguably, the tax code and Social Security system have long shaped the care industries by encouraging the private and unpaid provision of care by giving favored tax status to single-earner families (Kessler-Harris 2003). As this policy has failed to keep up with rising costs of living over the last half century, and more and more families have moved to having all adults in wage-earning roles, the formal, paid care industries have expanded. This expansion is predicted to continue. The number of people working in the care economy is expected to grow by 10.5 percent over the next decade, almost twice the growth rate across all occupations (Wedenoja 2022). 

As care work has become increasingly professionalized, we’ve also seen the rise of care sector unions (as well as the National Domestic Workers Alliance) as powerful forces for what should be understood as state-level industrial policies for care. For example, in the 2000s, SEIU 1199 set up close partnerships with hospital and health-care systems to lobby states and the federal government to expand Medicaid coverage in ways that have shaped and grown the markets for care work (Fink and Greenberg 2009). Likewise, 11 states collectively bargain with unions of home-based childcare workers, creating a system for the establishment of active industrial policies to grow and stabilize the home childcare sector (Collins and Gomez 2023).

Recent state and local-led efforts to expand access to public pre-kindergarten should also be understood as progressive industrial policy. In a recent paper, Josh Wallack (2023) shows how the build-out of 50,000 public, full-day pre-K seats in two years (2013–2015) in New York City required a robust industrial strategy that vastly expanded the industry and set new standards for workers within it.

In short, in the first decades of the 21st century, we have seen increasingly deliberate attempts at state-level industrial strategies for the care economy. It’s time for the federal government to embrace this policy practice as well. But deliberate industrial strategy is not one-size-fits-all. Saying we need a national, industrial strategy for care is only the start of the conversation about which of the many industrial policy tools at the government’s disposal would best shape care industries. This brief offers not only the case for an industrial strategy for care but a guide for how to think about additional questions that such an approach to care will inevitably surface. For example, are industrial policy investments in care best funneled through the private sector, or should we consider direct public provisioning in some cases? And, as another example, when public money does flow to private corporations, what guardrails should be attached? 

Standards and Guardrails Crucial to Equitably Investing in the Care Industry

A conscious industrial policy requires attention not only to investment but also to the standards and guardrails put on those investments. We will not solve our care crisis over the long term if new public spending gets funneled to and extracted by for-profit corporations. We need to not only use public funds to expand these markets but do so in a way that crafts these markets to be more equitable. Some standards and guardrails that will be particularly important in the care industries are strict performance, labor, corporate governance, and antitrust regulations.

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