Comment: Child care key to fixing the U.S. labor shortage

By Elliot Haspel / Special To The Washington Post

Just how bad is the U.S. child-care crisis? Harrowing stories have emerged of parents lining up overnight or sleeping in parking lots in hopes of nabbing day-care or preschool spots. For the strained parents of older children, shortages of lifeguards and camp counselors have increased the stress this summer. And this past week, Johns Hopkins University’s Center for Talented Youth abruptly canceled its residential program in Pennsylvania.

The common denominator is a lack of public investment causing huge scarcity in the child-care sector. That scarcity, in turn, is keeping parents — especially mothers — from full participation in the labor force, exacerbating the labor shortage.

Even before the pandemic, the United States ranked 32nd out of 40 industrialized nations for employment of mothers of young children, and below average for those with minor children of any age.

The national unemployment rate is 3.6 percent, with several states hitting all-time lows. There are almost two job openings for every unemployed individual. While this is excellent news for those seeking work, the impacts are being felt across the country as airlines and other businesses struggle to stay adequately staffed and supply chain breakdowns keep the inflation fire stoked.

All the while, a massive pool of would-be workers remains sidelined by an inadequate and expensive child-care system. Given the desperate need for more workers, this means there is a key tool that policymakers have not yet utilized: an investment in child care.

The pandemic crushed a child-care sector that was already fragile. The most recent available data shows almost 16,000 child-care programs closed permanently between December 2019 and March 2021, and the number almost certainly has grown. Even when programs have been able to stay open, many have had to scale down.

Although parents pay huge fees, programs cannot offer competitive compensation because of exceptionally high fixed costs arising from necessarily low child-to-adult ratios. Child-care workers make a median wage of around $13 an hour. Public funding is miserly; putting in only about $1,500 a year per child under the age 5 (by comparison, average per-child expenditure in public schools is over $13,000 annually).

One result of program and classroom closures? Slots cannot be found, and so parents, especially mothers, leave the labor force. “The estimated number of families affected by reduced capacity at child-care centers is equal to a little over half the drop in the labor force since covid began,” says a March report from Wells Fargo economists.

Beyond the pandemic, the report goes on, “if the [labor force] participation rate of mothers with young children could merely be raised to match the participation rate of women with school-age children — never mind that of men — approximately 1 million more workers would be in the labor force today.”

Even when parents are able to stay employed, child-care breakdowns take a toll on attendance and thus business productivity and customer service. For instance, a 2019 report from the Council for a Strong America noted that “almost two-thirds of parents facing child care struggles report leaving work early, and more than half report being distracted at or missing full days of work.”

There is good reason to think that permanent public investments in child care would offer the economy a jolt of adrenaline, easing scarcity and inflation while boosting productivity and reducing deficits. A team of economists recently released a paper projecting that even a “narrow” policy of fully funding the current choice-based subsidy system would cause a nearly 5 percent increase in full-time maternal employment. The largest increase — almost 13 percent — would be seen in mothers from low-income households.

These conclusions are in line with other research showing broad economic benefits of government investments in child care.

While some companies have been experimenting with offering child-care benefits, it is clear that public funding is required. Linking child care to a job-related benefit replicates a terrible aspect of U.S. health insurance with the added twist of a job loss separating young children from their beloved caregivers. And companies do not have the funds to address the problem in a system already unable to keep up with demand. The nation should no more expect corporations to cover child care than ask them to cover first grade: Both are social goods that require rolling up tax revenue to fund a functional system from which all can benefit.

There are many reasons lawmakers should prioritize child-care funding, particularly as congressional Democrats take a final stab at passing a portion of President Biden’s legislative agenda before the midterm elections. High-quality, affordable child care aids child development, acts as an anti-poverty measure and supports family stability. Particularly in this inflationary season, child-care costs that are outpacing average inflation are vacuuming up funds that otherwise could go to offset higher gas and food prices, to say nothing of helping families get ahead.

The overturning of Roe v. Wade has made these factors all the more salient. Perhaps no reason is more economically urgent, however, than ensuring a lack of child care does not hold back anyone who wishes to work; especially not when the United States needs every worker it can get.

Elliot Haspel is the senior program officer for early-childhood education at the Robins Foundation and the author of “Crawling Behind: America’s Childcare Crisis and How to Fix It.”