Exacerbated by the pandemic, the child care crisis is hampering the economy
Now the pandemic has highlighted what many experts have long warned: the lack of reliable and affordable childcare limits that people can accept makes it harder to climb the ladder of the world. business and ultimately restricts the growth capacity of the wider economy.
“Early learning is no longer seen as a problem for women or children. It’s really seen as an economic problem. It is about participation in the labor market, ”said Mario cardona, Chief Policy Officer of Child Care Aware of America. “These are employers who don’t have to worry about whether they will be able to count on their employees.
Child Care Aware estimates that 9% of licensed child care programs have closed permanently since the start of the pandemic, based on its tally of nearly 16,000 closed centers and home day care centers in 37 states between December 2019 and March 2021.
Now, with every teacher resignation, exposure to the coronavirus and daycare closures, reveals an industry on the brink of collapse, with far-reaching implications for the entire workforce in the economy.
The national crisis has forced many people – mostly women – quitting their jobs, turning the child care crisis into a problem not only for parents of young children, but also for all those who depend on it. He contributed to a labor shortage, which in turn has hurt businesses and made it more difficult for customers to access goods and services.
“The decisions we make about the availability of child care today will shape the US macroeconomics for decades to come by influencing who returns to work, what types of jobs parents hold and the career paths they take.” can follow, ”said Betsey Stevenson, an economist at the University of Michigan.
President Joe biden promised a unprecedented surge in federal spending in the hope of fixing the child care market. At a recent town hall in Baltimore, he assured parents that they “would not have to pay more than 7% of their income for child care.” Federal money would go directly to health centers to cover costs above the 7% cap. This means that the median American family earning $ 86,372 would pay $ 6,046 per year for child care.
Biden’s plan also includes a universal preschool, which could further reduce child care expenses for families. The expanded monthly child tax credit payments approved in Biden’s $ 1.9 trillion coronavirus relief program would be extended by one year. The president also proposed increasing the amount of the tax credit for childcare expenses, which should help improve access for families.
The Congressional Budget Office has yet to assess the costs as the measures are still being negotiated ahead of Biden’s departure on Thursday for the G-20 conference in Rome. Corn Donald schneider, a former chief economist for the House Ways and Means Committee who now works for consulting firm Cornerstone Macro, estimates that child care and preschool support would cost $ 465 billion over 10 years. The cost of one year of the expanded child tax credit would be around $ 120 billion. The credit would cost an additional $ 940 billion if renewed for nine years.
It remains to be seen what survives in the brutal negotiations in Congress for Biden’s vast family services program, but the pandemic is proving to be a decisive catalyst for the future of the childcare industry.
At Forever Young Daycare in the Seattle suburb of Mountlake Terrace, Amy mccoy burns fast.
She has spent half of that year trying to hire a new home child care assistant, but until then the former public school teacher is working 50 hours a week to look after herself. even children, and more for the necessary cooking, cleaning and administrative work. to run his business.
“When is my daycare more important than my own family? McCoy asked.
One of McCoy’s assistants, who worked there for five years, quit his $ 19 an hour job in April for a $ 35 an hour nanny job. McCoy posted the entry-level assistant job on Indeed and Facebook, offering $ 16 an hour, nearly 20% more than the state’s minimum wage. She received few responses and all of them refused her salary, making hiring impossible without an increase in tuition fees.
“No one wants to work for what I can afford right now,” McCoy said. “I absolutely believe these are $ 20 an hour employees, but I hate it, most likely I will have to increase the tuition.”
The US Treasury Department noted in a September report that day care workers earn an average of $ 24,230. More than 15% of workers in industry live below the poverty line in 41 states, and half of them need government assistance. The sector experiences high turnover rates, with 26 to 40% of them leaving their jobs each year. There is also not much wiggle room among daycares which tend to operate with profits of 1% or less.
In the vicinity of Edmonds, Briana mcfadden closed her business, Cocoon Child Care Center, last month due to stress from the pandemic, although McFadden believes it would have remained open had there been government grants to stabilize the industry.
In 12 years in business, McFadden said she had never raised tuition fees and was the rare daycare center in the affluent northern suburb of Seattle to accept low-income families with a grant from l ‘State. Before the pandemic, Cocoon employed seven people to care for 37 children. Now McFadden is considering opening a convenience store.
“It really wasn’t worth continuing,” said McFadden, his voice shaking with emotion. “Daycare is a tough business. “
Tatum RusselMcFadden’s livelihood depended as much on McFadden’s daycare as on the restaurant that employs him to bread seafood by hand.
During a COVID-19-related daycare closure in August, the single mom was only able to muster help from parents for part of the time. Russell eventually had to miss four days of work.
“It’s been a nightmare, and it’s not over yet,” said Russell.
Republished with permission from The Associated Press