It is slowly becoming so obvious that you could call it a trend. Help wanted signs are becoming the norm, and this has been the case for about a year now. As the labor market continues to get tighter, businesses struggle to find workers. It’s not as if the workers do not exist or vanished into thin air. Where have they all disappeared to? U.S. President Joe Biden has a theory. In this article, we will look closer at what that is and how child care fits into this picture.
By The Numbers
According to Federal Reserve Economic Data, statistics show that the number of women in the workforce has dropped dramatically since the pandemic. The total slid roughly 1.2 million from February 2020 to February 2022. The data shows that in March 2022 the labor force for women was down from February 2020 by roughly 864,000 workers. Additionally, the National Women’s Law Center says there has been a net drop since February 2020 in women’s jobs by 1.1 million.
Lack of Affordable Child Care Is to Blame
Biden touched on the matter and the cause in a recent speech at North America’s Building Trades Unions Legislative Conference. “There are 1.2 million extremely qualified women who haven’t returned to the workforce,” the President states. “There’s a simple reason: There’s no affordable child care for them.” This is not the first time, nor will it be the last time, that child care is cited as a reason the labor shortage continues.
Parents Navigating The Child Care Desert Landscape
The child care shortage also has a name. In areas where the number of children is greater than the amount of available licensed care seats (by at least three-to-one), you have a situation known as a child care desert. Essentially, any underserviced area can be a child care desert, and the majority of the U.S. is such a desolate area where child care is the measuring tool. This has caused many parents, mostly mothers, to leave the labor force to care for their children. Hence, all the help-wanted signs popping up everywhere. This became commonplace during the pandemic with changes to child care services by health protocols that closed many smaller service providers.
There Are Other Factors Involved
It is not just parents staying home to provide child care that is responsible for the labor shortage. The low wages child care workers earn is another major hurdle in the industry. This has been developing over the past several years to the point that the cost of child care has increased and reduced its availability at the same time. These changes have removed the once-affordable system and replaced it with an expensive one, if you are lucky enough to find a spot open for your child.
Biden Says Child Care Was Expensive for Him
In the days when Biden was a Senator, he was well-known for commuting home each night to his two sons in Delaware. There was a reason why he did that, and he revealed it in the speech to North America’s Building Trades Unions Legislative Conference. “Everybody thinks I commuted every day because I was this good father wanting to go home. That’s true. But I couldn’t afford daycare.” At the time, Biden was earning what he considered a good salary. When he was elected to the Senate in 1972, he would have been making about $42,500. In 2020 dollars, that would equate to $256,000.
The Build Back Better Act Addresses Child Care
Biden reiterated, “I couldn’t afford child care and these women can’t afford it either.” The Build Back Better Act was going to see billions of dollars used to help push the cost of child care down to where it became affordable for all families. That included provisions limiting how much parents would have to pay. The formula devised for this was that families making less than 250% of the median income in their state would only have to pay a maximum of 7% of their income for child care. That Act is currently held up at the federal level.
Some Parents Use Innovation to Afford Child Care
Innovation has afforded some families access to child care where they could not afford it before. Small groups of parents, known as pods, pool their resources and share a nanny or sitter that they have been able to guarantee so many days/hours of work weekly from all of the participating families. Although it is a complicated solution to the problem of a lack of child care, it does help several families meet some of their needs and provides work for service providers.
A Universal Plan Could Offer a Solution
The Century Foundation claims that parents could earn $48 million more if Congress moved ahead with a proposal that currently sits idle. The plan, which would result in establishing universal pre-K and affordable child care, would also allow for at least three million more parents to re-enter the labor market. This would ease the pressure currently being felt across all business sectors in the country.
Although there was already a shortage of child care services before the pandemic, COVID-19 compounded the problem. With fewer services operating due to pandemic protocols closing down many operations, and parents finding themselves either working from home or without jobs due to downsizing, child care has become a costly option. Many stay home parents took matters into their own hands, and women in particular have chosen to continue doing this as the pandemic ends. This choice has caused a shortage of workers in the labor market. The U.S. federal government is attempting to help families afford child care with hopes of parents going back to work as a result. So far, this has not happened in quite the way it was meant. The shortage of child care that continues to exist has forced costs to soar, putting it out of reach of many working parents. Plans are in place to ease this pressure, but until lawmakers put it into law, the plan remains stalled indefinitely.
Sandra Chiu works as Director at LadyBug & Friends Daycare and Preschool