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Rosalind Gottfried

Economics

July 13, 2020

Policy

There are more women working today than not though the peak year of labor force for women was 2000 (59.9%) down to 57.9% in January 2020.  At the turn of the century, with the upward trend in women’s labor force participation, many commentators thought women would soon surpass the rate of working men.  This did not occur and the 21st century has seen a slowdown in labor force engagement especially among women 25-54 years old, the prime span for work.  Other wealthy, and not so wealthy nations, experiencing an upward trend at the turn of the century continued to do so.  The US was alone in reversing this trend which was seen in as diverse nations as Japan, Latvia, and Poland.  Speculation regarding the uniqueness of the decrease in women’s participation in the labor force seems to directly lead to  the lack of  family friendly policies such as the absence of any guaranteed parental leave; the scarcity of paid sick leave; and perhaps most especially the failure to provide and national policy or access to quality, affordable daycare.

The average cost of US daycare ranges from $195 a week for in home daycare to $580 a week for nanny care.  These are national averages; the average expense in areas with a high cost of living can be greater.  Seventy one percent of families report spending 10% of their annual income on childcare.  It is no wonder that only 32% of women polled in 2012 stated that full time work is ideal.  There are not enough hours in the day to do it all and not enough dollars to pay for it all.  Much of the responsibility for childcare, and perhaps the desire to stay home, still lies with women even as some of the norms are changing.  On the average, men still make more than women so often it is more financially feasible for  women to take time off from the labor force.  Perhaps this will change with the growing attention to equitable wages for women and men, both within fields and across them.

In the absence of government subsidized daycare, as seen in all other Western countries, some companies have stepped up to offer daycare either on-site or with a partnered entity.  Traditionally companies have shied away from daycare seeing childcare as a personal responsibility and fearing the expense of creating a center and covering liability.  Research into companies offering childcare shows long term benefits in several areas.  With childcare available at work, absenteeism goes down; maternity leave is shortened; worker turnover decreases; morale increases; and productivity increases leading ultimately to financial gains in the companies.  One exception might be in the cost of daycare if not enough employees require its use.  There is also less anxiety among parents who get to visit with their children during the work day; spend travel time with the children; and are close by in case of emergency.  One weakness for parents is the issue of how to care for younger school age kids who require supervision outside of school hours.  Other benefits can be seen in the increases in women who can work in management, due to less time off and more support at work, and tax credits for the companies.  The glaring question is why is the US so reluctant to travel the path of most other nations and support working parents with subsidized, quality daycare?

Analysis

Abundant research points to the value of supporting children from disadvantaged backgrounds in the first five years.  The research shows that such support enhances high school graduation rates, college attendance, and adult income.  Yet there is no national policy supporting education in the early childhood and preschool years despite evidence that every dollar spent can save as much as $7.30 down the line.  Benefits do not accrue just to individuals.  It is estimated that if the US had family friendly policies characteristic of other industrialized countries, women’s participation in the labor force would increase by 7% and the economy would see gains of 5%.

As if the childcare situation is not bad enough, as many working parents know, the era of the coronavirus has exacerbated many of the weaknesses in the system.  Many daycares have been shuttered and a significant number may not reopen.  It has been suggested that this is more likely to occur with Black owned businesses and those catering to the low income groups.  Parents who will need to return to work will have no place to put their children.  For some parents who have been paying to maintain their children’s space, the reopening of the facilities may not actually occur or the environment may not be aligned with safety measures recommended for hygiene and social distancing making the choice to work more precarious.

There is a ray of hope in that Congress is considering several bills to address issues in daycare.  Some states are stepping up. Illinois is offering state supported childcare to all essential workers in the areas of human services, healthcare, government and infrastructure regardless of income.  Maybe more will follow suit.

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