Expiration of child care subsidies threatens the whole economy
At the end of this month, states are expected to run through the last of $24 billion in additional federal funding for child care, implemented as part of the overall pandemic relief efforts. We’ll all be worse off for it. Rarely has a single policy choice managed to advance so many worthwhile goals at once, nor does its expiration threaten so many.
Child care keeps the economy running. We don’t need fancy statistical modeling to explain that the economy (and our continued survival as a species) depends on people continuing to have children, and already there are alarm bells ringing from a long-term decline in U.S. births. It also, of course, depends on moms and dads being able to enter and remain in the workforce.
Yet the unavailability and extremely high cost of available child care means people either don’t have children — bad for them and bad for the economy — or have them and then drop out of the workforce to take care of them — bad for them and bad for the economy.
While there’s a lot of hand-wringing about young people’s supposed disinterest in having kids, research has established the obvious, that people don’t necessarily want fewer kids than they have in the past few decades, but the logistical and financial challenges seem increasingly insurmountable. A huge part of that is child care, the costs of which have risen almost double the inflation rate over the past year.
That landscape is tough enough as is, but the federal funding was a lifeline. Now, according to a recent report by The Century Foundation, its expiration could lead to the closure of 70,000 child care programs nationwide and 3.2 million children losing out on their current child care spots. The shuttering of these centers will alone mean the loss of hundreds of thousands of jobs, before you even consider what it will mean for the millions of parents whose only feasible way to participate in the workforce will evaporate practically overnight. All in all, the think tank estimates families will lose out on a cumulative $9 billion in earnings per year.
This is not about “free money” or whatever other inane attack on public funding for the public good. Every serious study on this matter has concluded that it carries significant return on investment, producing increased economic activity and saving on other costs; the main disagreements are around just what multiple we get back of every dollar spent.
So here we have a funding stream that creates new jobs, preserves existing jobs, keeps women in particular in the workforce, grows the economy, incentivizes people to start families as birthrates decline and generally produces excellent returns, and our decision is to get rid of it right as surprisingly strong post-pandemic economy begins to cool. Why? There really are no rational economic reasons to do so, and so we must once again look to politics.