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The Covid-19 pandemic has exposed both the cracks and the resilience of the U.S. economy, with child care taking center stage as daycares close, schools move further apart and parents try to juggle their children with work.
According to analysts, employment in the childcare sector has returned to its baseline level after the pandemic the latest data from the Central Statistical Officea shortage of staff and available places for children in some areas weighs on the sector.
Costs for families are also rising. AND Bank of America February report found that costs for families increased from 15% to almost 30% in terms of the average child care fee per household year-over-year in the fourth quarter of 2023. The largest increases were seen for households with average incomes of PLN 100,000 to PLN 250,000 dollars per year .
Policy advocates argue that child care, including infants and toddlers, is an economic issue that affects all Americans, not just those with teenage children.
Billions in American Rescue Plan Act stabilization funds earmarked for the child care sector expired last fall, which could lead to rising costs for families or centers closing their doors.
ReadyNation, an advocacy group of more than 2,000 business executives, lobbies for policies and programs at the state and federal levels that support a forceful workforce and economy, including child care.
In 2023, the group released a report showing that the nationwide infant and toddler care crisis is costing the United States an estimated $122 billion in lost wages, productivity and revenue each year. That’s up from $57 billion in 2018, before the pandemic exposed and deepened gaps in the system for working families and the businesses that depend on them.
ReadyNation study results the combination of “Covid-19 and insufficient policy action has made the crisis much worse.”
“This applies to all taxpayers. We must recognize that the loss to taxpayers is $1,470 per year per working parent due to paying lower income taxes and lower sales taxes due to the lack of purchasing power among the unemployed,” said Nancy Fishman, national director of ReadyNation.
Part of the nationwide solution is supporting what the group calls “the workforce behind the workforce” – early child care providers.
“Supporting early childhood workers can include things like ensuring childcare providers have access to services. We all know how crucial benefits are, whether it’s health benefits or the ability to find quality child care for them. own children,” Fishman told CNBC. “Programs that support additional training and education for child care providers are also crucial.”
Solutions in the Golden State
In California alone, economic losses, including lost wages, productivity and revenues, are estimated at $17 billion, according to ReadyNation Projects. The group estimates that’s more than any other state in the country.
While the number of child care jobs in the state has increased to a 2020 baseline since the spring, according to an analysis by the Center for Child Care Employment Research, other states have seen greater job growth following the pandemic.
Some California child care workers organized in 2019 with Child Care Providers United, which now represents more than 40,000 licensed and exempt home child care providers, friends and family, and child care providers. The providers participate in the California state grant program, and the union is a partnership of SEIU Locals 99 and 521, as well as UDW/AFSCME Local 3930.
The group won its first contract in 2021 and gained access to the first pension benefits in the country.
The union says child care providers are currently reimbursed for a percentage of what it costs to provide care in the state. The average wage for a babysitter is between $7 and $10 per hour, and many providers report no take-home pay.
Healthcare providers are now advocating through the state budget process for reimbursement for the full cost of providing care to bring greater dignity to their work, keep providers open, and attract fresh providers to the workforce.
Deborah Corley-Marzett runs a subsidized care home center in Bakersfield, California. She told CNBC that she would like to hire more staff to support her and the children, but in this situation it is complex to find the right person and offer a competitive salary. For example, low-wage workers in the state’s rapid food sector just secured a historic minimum wage of $20 an hour, putting pressure on other sectors to keep pace.
“I have a problem with staff shortages. Right now I literally can’t afford to hire someone to come and work with me in the mornings. I can’t afford it,” Corley-Marzett said. “I don’t have enough children at the moment. But I physically cannot take on any more children.”
Lawmakers say progress has been made, but much more remains to be done. State Sen. Nancy Skinner, a Democrat who represents parts of the Bay Area and chairwoman of the California Women’s Caucus, said the group continues to prioritize early child care and education. The group has advocated for a $2 billion augment in state spending on early care and education over the past two years, to a total of $6.5 billion.
Currently, the club is focused on maintaining stable reimbursement rates for child care providers while the state reduces its budget deficit.
“We have low unemployment, but many sectors of the economy are looking for workers,” Skinner told CNBC. “If your family is in a situation where you can’t go to work because you don’t have adequate child care or you can’t afford child care, then you can’t do that job that’s sitting, empty and waiting for you. “
