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A US Child Care Crisis is About to Worsen and Needs Attention [1]
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Date: 2023-09-09
It is well known that the United States lags behind other developed countries in child care, both in terms of paid leave and spending per child. According to the New York Times, these wealthier countries spend an average of $14,000 per child on child care versus $500 per child in the US.
While longer term solutions have been elusive, the government did extend a stabilizing lifeline to child care providers during the pandemic. The American Rescue Plan provided $24 billion in stimulus funds for child care. However, this stimulus is set to expire at the end of the month. A study by The Century Foundation, a progressive think tank, estimates that the end of the stimulus program will put over 70,000 day care centers at risk of closing, with 3.2 million children losing their spots. In addition, the study projects spillover economic effects, with parents losing $9 billion per year in earnings and states losing $10.3 billion in tax revenue and from reduced productivity.
A bit of history: since the late 19th century, US child care policy has been a patchwork of charities, relief programs, block grants and tax credits. (the current child care credit provides a tax credit of up to $2,000 per child). The closest we came to a broad national program to provide universal child care was in 1971. Congress passed the Comprehensive Child Development Act on a bipartisan basis. The Act would provide for a federally funded, state administered child care system. However, the bill was vetoed by Nixon under pressure from “traditional family” culture warriors such as Pat Buchanan.
Two main issues going forward are pay for child care workers and affordability of quality care for single parents and two-earner families. According to The Century Foundation, child care workers make an average of $13.50 per hour, far below what they are worth and less than they can earn in other jobs. Without funding, child care operators must directly raise pay to attract workers, which then creates pressure to raise their prices to maintain business margins. In terms of cost, according to a 2023 care.com Cost of Care Report, nearly 60% of parents surveyed are expected to pay over $18,000 per year, while two-thirds are spending more than 20% of their income on child care. Many households has been forced to spend more than planned, rely on alternative sources such as relatives, or adjust and/or reduce work hours.
It is important to prioritize maintaining affordable quality child care alongside other spending items in upcoming budget negotiations. Some states have proposed (largely) employer-based incentives. However, given the lack of federal investment in child care, a longer term solution will most likely require comprehensive child care legislation by a Democratic majority with strong presidential backing.
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