empty childcare class

How Childcare Can Make or Break the Current Economy

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As we approach the end of the year, many are now taking a look back, especially at the last seven months, and taking stock of where we are and where we need to go. And a big talking point for many of us, is the economy. With the US debt set to exceed the US economy for the first time since World War II, an economic depression is not just a possibility—it is a certainty. Now the concern is how we can best minimize the damage and rebound the workforce as quickly as possible. Everyone from the local to the federal level seem to be proposing different plans to try and restart the US economy but most of these plans all seem to overlook one crucial factor to the return of the US workforce: reliable childcare. Without reliable childcare, parents may have to make the tough choice of having one of them either reduce their hours or leave the workforce completely to take care of the kids at home. And if you are a single parent, the situation becomes even more grim. Women in particular are feeling the brunt of not only this recession but also the shrinking pool of choices in how they work and provide for their families.

In 2008 we faced a similar financial economic crisis except that one was caused by irresponsible housing lending, among other reasons. It rippled through the housing construction industry, along with manufacturing, all jobs that are predominantly occupied by men. From 2007 to 2009, 78% of the jobs lost were held by men and the percentage of unemployed men nearly doubled, according to the Federal Reserve. Hence, that recession was called a ‘man-cession’. At that time, women were less affected because they had historically worked in industries less affected by cyclical changes in the economy, such as hospitality, education, childcare, and healthcare. But this 2020 crisis has flipped the coin.

Those very same industries—hospitality, education, childcare, healthcare—are exactly the hotspot businesses that were most affected by the pandemic. And just as in 2008, most of these industries are still occupied by women. This time around, it is the women who are feeling the impact of this recession with the recent crisis shutting down or nearly eliminating many female-dominated industries. With a novel contagion on the loose, any place where large groups would be congregating in small spaces became too dangerous to be open. Restaurants, nail salons, and eventually schools and child care centers in all fifty states were closed immediately. And while restaurants and salons closing definitely devastated a lot of workers, the closure of schools and child care centers affected more than just the employees who worked in those industries. It affected the families, especially moms, who were now left without reliable and safe child care.

For the women who work within child care, this current crisis has been devastating. Between February and April alone, day cares across the country were forced to cut over 370,600 jobs in the child care industry, over a third of its workforce. And women accounted for 95% of these losses. Between April and July, only 42% of the lost jobs had returned. And in states where closures weren’t mandatory, enrollment dropped significantly, with worried parents keeping their children home and away from any potential threats from this new and unknown virus. The federal government took very little action and provided only minimal funding or aid for child care in pandemic stimulus packages. Many day cares began going out of business entirely. And the centers that did survive long enough to re-open during the summer, the costs rose for parents due to the limiting enrollment numbers for social distancing and increased cleaning costs. For families with one or both parents struggling to make ends meet due to the pandemic, this kind of increase in tuition was just too unmanageable.

child care closures

This kind of industry devastation is not unique to child care centers. Many other businesses could also claim such losses. But the loss of reliable child care, coupled with the closure of schools across the nation, will cripple many families trying to return to the workforce. High quality child care allows parents to stay in the workforce. And child care is particularly important for mothers who still typically take on most of the caregiving responsibilities at home. In 2018, 41 million US workers ages 18-64 were caring for at least one child under the age of 18. Of these, 34 million have at least one child under the age of 14 and are more likely to rely on school and child care than parents of high school aged children. And while 30% of parents with young children are lucky enough to have a caregiver at home—a family adult who is either retired or working less than half time—the rest of the unlucky 70%, or 23.5 million working parents, rely completely on the reopening of child care programs and schools. Without either options, these parents will find it difficult to near impossible to return to work and provide for their families.

In some parts of the country, school and child care is absolutely the linchpin of their workforce. For example, families in the Midwest are particularly dependent on school and child care. Of the 16 metro areas where more than 25% of the workforce is school- and child care-dependent, all but three are in the Midwest. Places like Fargo, North Dakota, Des Moines, Iowa, and Rochester, Minnesota all have over 25% of their workforce heavily relying on school and child care. To truly jumpstart the economy out of this crash, we will need millions of Americans to either remain in their current jobs or to return to the workforce as soon as possible. But in areas where they are so dependent on safe and reliable child care, this could prove to be impossible given the current circumstances.

Many jobs have made the quick transition to remote working. A lot of parents find themselves now working from home which may seem to solve this issue but when looked closely, it only aggravates the problem, especially for women. Three of the country’s largest school districts—Los Angeles, San Diego, and New York City—have announced that their classes will be partly or fully remote this year. Countless other smaller counties across the nation are also following suit. That means children are home all day, requiring at least one parent to reduce their working hours or drop out of the workforce completely to take care of the kids. In April, the Morning Consult for the New York Times held a poll where 80% of moms with kids under 12 reported that they spent more time than their partners supervising remote learning. In that same survey, 28% of mothers said that they were working less than usual. This is another reason why 2020’s recession can be considered a ‘woman-cession.’ When families have to make a decision on having a parent quit their job to remain home, working mothers are predominantly the ones who sacrifice their careers and income. This disruption is likely to contribute to earning gaps and generally depress employment rates among women for years to come.

But the opportunity to work from home is not an option afforded to all families, especially many minority families. Industries such as hospitality, retail, or frontline jobs where most employees are minorities, remote working is not a possibility. This leaves many minority families with less options than their white counterparts. About 1 in 5 school- and child care-dependent working parents lives in a family with income below 200% the federal poverty line, a standard measure to capturing the working poor. And many of those families are people of color. These numbers more than double in certain regions, particularly in metro areas in the Sunbelt. For these families, having a family member dropping out of the workforce to care for children at home would actually make things worse for the family as a whole. But that leaves a huge question for so many of these families struggling to keep their lives together—who will watch the kids?

single parent child care

Another caveat to all of these scenarios is that these are all assuming we are talking about a two parent household. But according to the Pew Research Center, in 2017 about 16% of parents in the US were single, meaning without a partner at home. About 18 million children were living in homes with just one parent. And single parents are far more likely to be women. In 2017, 81% of parents living alone with kids were moms. And women of color are more likely than their white counterparts to either be single parents or be the significant breadwinners for their households. As of 2018, 74% of black moms were either single or providing at least 40% of a couple’s earnings. And with black and Latina women representing the majority of the frontline workforce, they are at jobs where working from home is not an option. Child care is absolutely crucial for them. The loss of safe and reliable child care is now falling hardest on the most vulnerable subset of parents—single, low income mothers—who are the least able to afford the rising costs of the few child care centers that are open right now.

As mentioned before, this is the recession that seems to be hitting women the hardest. And while it can cause an upset on the progress of women in the workforce, this kind of setback will also hurt families for years to come. According to a 2016 analysis at the Center for American Progress, parents who leave the workforce make less even when they go back to work. And those losses add up in lower wage growth over time, as well as lower retirement savings and Social Security benefits. Overall, parents lose up to 3-4x their annual salary for every year out of the workforce. So, for example, when a 26 yr old mom making $44,600 a year (the median yearly wage for women in the US for the first quarter of 2020) is forced to leave her career to take care of her children who are remotely attending school or unable to attend a day care, she would lose $163,139 over her lifetime by taking just one year off work. That would not only severely impact the woman but also her family, especially during such an uncertain period as this current global crisis. And it goes without saying, these numbers would more greatly affect black and latino families who have less accumulated wealth than white families to fall back on.

Some states have recognized how important and fundamental child care is to their economy’s return. Vermont in particular has led the way in working to keep child care alive. Starting in March, Vermont spent $21 million to keep its child care programs from going under. When child care providers had to close because of the pandemic, they received money from the state to keep their staff on payroll. Those centers that remained open to care for the children of essential workers received hazard pay and other support. And in the summer when more centers started to reopen, they got restart grants to help them with the added expenses—such as extra cleaning supplies and additional staff. It’s too early to say what the overall reach of these efforts will make on Vermont’s economy as a whole but it’s certainly aided their child care industry and I’m sure many families, moms especially, are thankful.

As more people are beginning to recognize the scope of the economic recession that is enveloping this country, certain industries are becoming recognized as those crucial components to a healthy return of the workforce. Child care is certainly one of them. In July, a $775 billion investment plan was proposed for covering care for children, older adults, and family members with disabilities. It’s an attempt to answer the problem millions of working American families are facing right now with the lack of reliable child care. For Americans to be able to safely return to work en masse, not only will we need sweeping healthcare reforms to help create a safe workplace until a vaccine can be provided, but we also need to help shore up and strengthen the support systems that allow for parents to work. Schools and child care centers need the investment and support so that parents, and in particular, moms can return to work. This crisis has been exhausting, draining, and overwhelming for us all. But by remembering to work together, to unite rather than divide, we can bring American families and the American economy back to the forefront again.

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