Inadequate U.S. Child-Care Hampers Economy, Treasury Says
Inadequate U.S. Child-Care System Hampers Economy, Treasury Says
(Bloomberg) -- The U.S. child-care system fails to adequately serve many families due to insufficient supply and high cost, holding back parents’ ability to contribute to the economy, according to a new report from the U.S. Treasury Department.
One reason the current child-care system is “unworkable” is because parents of young children are asked to pay for care when they can least afford it -- they are often earlier in their careers and still paying major expenses like mortgages and student loans, the report said. Inadequate access to child care may play a role in why women’s labor force participation has stayed flat since 2000 in the U.S. while rising in other advanced economies, according to the Treasury report released Wednesday.
Those factors suggest that child care is a sector that’s in need of the government support outlined in President Joe Biden’s economic agenda, which would make child care more affordable and provide access to high-quality child care for low- and middle-income children, including universal pre-K, the report said. The industry is marked by low wages, high employee turnover and “razor-thin profit margins,” Treasury said.
“It’s past time that we treat child care as what it is -- an element whose contribution to economic growth is as essential as infrastructure or energy,” Treasury Secretary Janet Yellen said in a related news release.
Women on average take on more child care responsibilities than men, and that was exacerbated during the pandemic when day care centers closed and many mothers quit their jobs. Making child care more available and affordable is seen as a means toward a fuller labor market recovery because it would allow more parents, particularly mothers, to return to the workforce.
More funding for child care could also improve the well being of care providers themselves, who are disproportionately women of color and earn low wages. More than 15% of child care workers are below the poverty line in 41 states, and nearly half of child care workers use public assistance such as programs for food and children’s health insurance, according to the Treasury report.
Yellen and Vice President Kamala Harris will discuss the report further during an event hosted by the Treasury at 4 p.m. in Washington.
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