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The Covid-19 pandemic has laid bare the cracks and resilience of the U.S. economy, taking center stage as day care centers closed, schools became remote, and parents tried to juggle children and work.
Although employment in the child care industry has returned to baseline levels post-pandemic, according to Latest data from the Bureau of Labor StatisticsShortages of available places for workers and children in some areas are putting pressure on the industry.
Household costs are also rising. A Bank of America February report It shows that in the fourth quarter of 2023, the average child care cost per household increased by 15% annually to nearly 30%.
Policy advocates argue that child care, including care for infants and young children, is an economic issue that affects all Americans, not just those with young children.
Billions of dollars in stabilization funding earmarked for the child care sector in the American Rescue Plan Act expired last fall, potentially leading to increased costs for home or center closures.
ReadyNation is an advocacy group of more than 2,000 business executives lobbying for support for policies and programs at the state and federal levels that support a strong workforce and economy, including child care.
A 2023 report from the organization found that the infant and toddler care crisis in the United States costs the United States an estimated $122 billion in lost revenue, productivity and income each year. That’s up from $57 billion in 2018, when the pandemic exposed and exacerbated system vulnerabilities for working families and the companies that rely on them.
ReadyNation Research Findings “Covid-19, combined with insufficient policy action, has resulted in a significant worsening of the crisis.”
“All taxpayers will be affected by this. We need to recognize that taxpayers pay lower income and sales taxes because unemployed people lack the purchasing power, so each working parent loses $1,470 a year,” said Nancy Fishman, ReadyNation Nation Director.
Part of the national solution is supporting what the organization calls “the workforce behind the workforce” — early child care providers.
“Supporting the early childhood workforce can include things like ensuring that child care providers have access to benefits. We all know how important benefits are, whether it’s health care benefits or their ability to find high-quality child care for their own children,” Phi said. Shman told CNBC. “Programs that support additional training and education for child care providers are also important.”
Golden State’s Solution
The ReadyNation Project estimates that in California alone, economic losses (including lost revenue, productivity, and income) are estimated at $17 billion. That number is higher than any other state in the country, according to the group’s estimates.
While child care jobs in the state have rebounded to their 2020 baseline as of this spring, other states have seen greater post-pandemic job growth, according to an analysis by the Center for Child Care Employment Research.
Some California child care workers organized in 2019 with Child Care Providers United, which currently represents more than 40,000 family licensed and exempt child care providers, friends and family, children Child care providers. These providers are part of the California State Subsidy Program and the union is a partner of SEIU Locals 99 and 521 and UDW/AFSCME Local 3930.
The group won its first contract in 2021 and received the nation’s No. 1 retirement benefits.
The union said child care providers are currently compensated as a percentage of the cost of providing care in the state. The average wage for child care providers is $7 to $10 an hour, with many providers reporting no take-home pay, the report said.
Healthcare providers are currently advocating for reimbursement of the full cost of providing care through the state budget process to create more dignity in their work, keep providers open and attract new providers to the workforce.
Deborah Colley Mazzette runs a Family Assistance Care Center in Bakersfield, California. She told CNBC she would like to hire more staff to help support her and her children, but it’s difficult to find the right people and offer competitive salaries in this environment. For example, low-wage workers in the state’s fast-food industry just received a historic $20 an hour minimum wage, forcing other industries to keep up.
“I’m facing a staff shortage. I really can’t afford to hire someone right now to come and work with me in the mornings. I can’t afford it,” Colley-Mazette said. “I don’t have enough kids right now. But I can’t raise any more.”
Lawmakers believe progress has been made, but more needs to be done. State Sen. Nancy Skinner, a Democrat who represents parts of the Bay Area and chairs the California Women’s Caucus, said the group continues to prioritize early childhood care and education. The group advocates increasing state spending on early care and education by $2 billion over the past two years, bringing the total to $6.5 billion.
The caucus’ current focus is on maintaining stable reimbursement rates for child care providers as the state tightens its budget deficit.
“We have low unemployment, but many sectors of the economy are looking for workers,” Skinner told CNBC. “If you have a family member who can’t go to work because there’s not enough child care, or you can’t afford child care, then You will not be able to complete the job that is waiting for you.”
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