[Joint House and Senate Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                                                         S. Hrg. 116-89

              MAKING IT MORE AFFORDABLE TO RAISE A FAMILY

=======================================================================

                                HEARING

                               BEFORE THE

                        JOINT ECONOMIC COMMITTEE
                     CONGRESS OF THE UNITED STATES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION
                               __________

                           SEPTEMBER 10, 2019
                               __________

          Printed for the use of the Joint Economic Committee
          
                    
                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]   
                  
                              ___________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
37-820                    WASHINGTON : 2019                    





                        JOINT ECONOMIC COMMITTEE

    [Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]

SENATE                               HOUSE OF REPRESENTATIVES
Mike Lee, Utah, Chairman             Carolyn B. Maloney, New York, Vice 
Tom Cotton, Arkansas                     Chair
Ben Sasse, Nebraska                  Donald S. Beyer, Jr., Virginia
Rob Portman, Ohio                    Denny Heck, Washington
Bill Cassidy, M.D., Louisiana        David Trone, Maryland
Ted Cruz, Texas                      Joyce Beatty, Ohio
Martin Heinrich, New Mexico          Lois Frankel, Florida
Amy Klobuchar, Minnesota             David Schweikert, Arizona
Gary C. Peters, Michigan             Darin LaHood, Illinois
Margaret Wood Hassan, New Hampshire  Kenny Marchant, Texas
                                     Jaime Herrera Beutler, Washington

                Scott Winship, Ph.D., Executive Director
                 Harry Gural, Democratic Staff Director



                            C O N T E N T S

                              ----------                              

                     Opening Statements of Members

Hon. Mike Lee, Chairman, a U.S. Senator from Utah................     1
Hon. Carolyn B. Maloney, Vice Chair, a U.S. Representative from 
  New York.......................................................     3

                               Witnesses

Mr. Lyman Stone, Adjunct Fellow for the American Enterprise 
  Institute, Research Fellow, Institute for Family Studies, 
  Wilmore, KY....................................................     6
Mr. Ryan Bourne, R. Evan Scharf Chair for the Public 
  Understanding of Economics, Cato Institute, Washington, DC.....     7
Dr. Jane Waldfogel, Compton Foundation Centennial Professor for 
  the Prevention of Children's and Youth Problems, Columbia 
  University, School of Social Work, New York, NY................     9
Ms. Kristin Rowe-Finkbeiner, CEO/Executive Director and Co-
  Founder, MomsRising, Kirkland, WA..............................    11

                       Submissions for the Record

Prepared statement of Hon. Mike Lee, Chairman, a U.S. Senator 
  from Utah......................................................    44
Prepared statement of Hon. Carolyn B. Maloney, Vice Chair, a U.S. 
  Representative from New York...................................    44
Prepared statement of Mr. Lyman Stone, Adjunct Fellow for the 
  American Enterprise Institute, Research Fellow, Institute for 
  Family Studies, Wilmore, KY....................................    47
Prepared statement of Mr. Ryan Bourne, R. Evan Scharf Chair for 
  the Public Understanding of Economics, Cato Institute, 
  Washington, DC.................................................    65
Prepared statement of Dr. Jane Waldfogel, Compton Foundation 
  Centennial Professor for the Prevention of Children's and Youth 
  Problems, Columbia University, School of Social Work, New York, 
  NY.............................................................    70
Prepared statement of Ms. Kristin Rowe-Finkbeiner, CEO/Executive 
  Director and Co-Founder, MomsRising, Kirkland, WA..............    76
Response from Dr. Waldfogel to Question for the Record Submitted 
  by Senator Klobuchar...........................................    84
Response from Ms. Rowe-Finkbeiner to Question for the Record 
  Submitted by Senator Klobuchar.................................    84

 
              MAKING IT MORE AFFORDABLE TO RAISE A FAMILY

                              ----------                              


                      TUESDAY, SEPTEMBER 10, 2019

                    United States Congress,
                          Joint Economic Committee,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:30 p.m., in 
Room 216, Hart Senate Office Building, the Honorable Mike Lee, 
Chairman, presiding.
    Representatives present: Maloney, Heck, LaHood, Trone, 
Beyer, Beatty, and Schweikert.
    Senators present: Lee, Heinrich, Cassidy, Hassan, and 
Peters.
    Staff present: Melanie Ackerman, Robert Bellafiore, Dan 
Burns, Sol Espinoza, Harry Gural, Amalia Halikias, Colleen J. 
Healy, Beila Leboeuf, Vijay Menon, Michael Pearson, Hope 
Sheils, Kyle Treasure, Jim Whitney, Scott Winship, and Randy 
Woods.

 OPENING STATEMENT OF HON. MIKE LEE, CHAIRMAN, A U.S. SENATOR 
                           FROM UTAH

    Chairman Lee. Good afternoon, and thanks to all of you for 
being here and joining us today for this hearing of the Joint 
Economic Committee.
    The American economy is thriving. The current economic 
expansion is the longest in U.S. history. Our unemployment rate 
has remained below 4 percent over the last 18 months. In recent 
years we have seen consistently solid GDP growth, and growth in 
job creation.
    And yet, notwithstanding these successes, for many parents 
across this country raising a family has become harder and more 
expensive than ever before. The New York Times in fact recently 
reported that based on the surveyed adults between the ages of 
20 to 45 who were parents or who planned to be, they discovered 
some interesting trends:
    One in four had fewer children, or expected during their 
lifetimes they would have fewer children than they considered 
to be within the range of ideal. Economic concerns were 
foremost among the reasons that they either fell short or 
believed that in the future they would fall short of what they 
considered ideal.
    Over the past few years, the Joint Economic Committee's 
Social Capital Project has been documenting trends in what we 
refer to ``our associational life as Americans.'' That is, the 
web of social relationships through which we as Americans 
pursue various endeavors--our families, our communities, our 
friendships, our religious congregations, for example.
    A critical source of meaning and social capital is, of 
course, the family. In fact, it is the central set of 
headwaters for social connectiveness generally. That is why two 
of the project's main policy objectives are making it more 
affordable to raise a family, and increasing the number of 
children who are raised by happily married parents.
    The goals of today's hearing are to examine factors 
affecting family affordability and to explore policy approaches 
that might allow for more Americans to start and to raise the 
families that they desire.
    Increasingly, family affordability has become a unifying 
concern among lawmakers and policymakers and commentators of 
both the political Right and of the political Left and 
everything in between. We hear it even in discussions around 
topics that are as varied as the Child Tax Credit, declining 
fertility rates, increases in the cost of child care and of 
housing, paid family leave, and student debt burdens.
    Motivating all these discussions is a simple statement: It 
should not be this hard to raise a family.
    The problem is of course multi-faceted. It is complex. It 
is difficult to unravel and to understand completely. Economic 
challenges such as debt loads, and increases in the cost of 
living make family formation and expansion difficult for many 
Americans.
    Even many families that are economically stable have to 
deal with the challenges of balancing work and family. Parents 
want to afford the best neighborhoods and schools for their 
children, but that often leads to too little time to spend with 
them--less time, at least, than they would prefer.
    As more families have sent two earners into the workforce, 
employers have been slow to accommodate their desire for work/
life balance.
    Meanwhile, Americans who might prefer something closer to a 
single-breadwinner family face prices for housing and other 
expenses that are bid up by dual-earner households, and the 
growing ranks of single parents are hampered by their 
correspondingly high poverty rates.
    The answer to ``How did we get here?'' is complicated. Our 
first step must be to adequately diagnose the problems facing 
our families. What fuels the rising costs of health care? Of 
child care? Of education? And of housing? How many people are 
hindered in family formation and expansion by excessive student 
loan debt and inadequate income, or poor employment prospects?
    To what extent does declining fertility reflect changing 
preferences, economic barriers, or other factors? And does the 
rise of the dual-earner family signal increasing hardship or 
simply changing values?
    The next step must be to come up with some solutions. What 
is the best way to help more families afford time out of the 
work force to care for newborns? Are there ways to increase 
work/family flexibility that are minimally disruptive to 
employers, and less likely than others to discourage job 
creation?
    Of the government policies that unintentionally have 
contributed to increases in the cost of housing, of higher 
education, and health care, which of those can be reformed?
    How can we make the Tax Code fairer to parents who bear the 
costs of supporting future generations of Americans? How is it 
that we can make sure that we have the workforce and the 
taxpayer base necessary to fund not only the programs of today 
but the programs of 20, 30, 40 years from now?
    Our panelists today will discuss some of these topics, and 
more. I look forward to their testimonies and to a productive 
conversation aimed at helping parents and strengthening our 
families.
    I now recognize Vice Chair Maloney for her opening remarks.
    [The prepared statement of Chairman Lee appears in the 
Submissions for the Record on page 44.]

  OPENING STATEMENT OF HON. CAROLYN B. MALONEY, VICE CHAIR, A 
               U.S. REPRESENTATIVE FROM NEW YORK

    Vice Chair Maloney. Thank you so much to our panelists and 
Chairman Lee for calling this hearing. Nothing is more 
important than our families. And thank you for shining a 
spotlight on the challenges facing American families.
    We can agree there is a problem. Today, millions of 
American families are working longer and harder not to get 
ahead but just to stay in place. And over the past four 
decades, wages have been stuck or have barely increased. 
Meanwhile, the cost of child care, education, housing, and 
other necessities for families has grown.
    Most families rely on two incomes just to make ends meet, 
because that is what it takes to support an American family 
today. Nearly 40 percent of American adults report that they or 
their families have trouble paying for at least one basic need, 
like food, health care, housing, or utilities. The picture is 
no brighter when you look at specific costs. Take child care. 
The average cost of center-based infant care is more than one-
quarter of median household income for single working parents.
    That means that those who need child care the most cannot 
afford it. Or look at college education, which is almost a 
necessity in today's economy--I would say it is a necessity--
but since the 1980s, the average cost of a full-time 
undergraduate degree has more than tripled for public and 
private institutions.
    Today's typical graduate leaves college with $30,000 in 
debt. Or look at housing. Home prices are higher than ever, and 
often out of reach. And over one-third of renters spend more 
than 30 percent of their overall income on rent.
    How are families responding to stagnant wages and growing 
costs? By taking on debt. Consumer debt, excluding mortgages, 
is now $4 trillion, the highest level ever, adjusting after 
inflation.
    Folks are also putting off home ownership, which can 
deprive them of a key source of wealth accumulation. Everyone 
in this room agrees that it is more expensive than ever to 
raise a family, but we may disagree about the causes, and we 
may disagree about the solutions.
    I welcome the robust discussion that this Committee 
provides. The entrance of women in the workforce is not a 
problem. We may hear that Americans got married less frequently 
or later in life as women took on careers, and that has hurt 
fertility rates, but women have become key drivers of our 
economic success.
    Women's earnings boost the economy by trillions of dollars, 
and are critical to American families. Women's share of 
household earnings increased from 36 percent in 1993 to 45 
percent in 2016. Women could do even more if we made it easier 
for them to enter and stay in the workplace and had more 
flexibility, as the Chairman mentioned, at the workplace.
    There are two key, overwhelmingly popular ways to do that: 
Offer affordable child care and paid leave for the birth of a 
child, and for other reasons such as illness.
    Let's take a lesson from other OECD countries that provide 
these services and have significantly higher female labor force 
participation. And while we are at it, let us make sure that 
women are paid fairly so they have strong incentives to work.
    On average, a woman working full-time year-round earns just 
82 percent of her male counterpart for the same. For Black and 
Hispanic women, it is far worse. For far too many, the American 
Dream is slipping away, or is completely out of reach.
    Some would say that the solution is for the Federal 
Government to do nothing. I disagree. It has a key role to play 
in helping to restore that dream.
    What can it do? What can Congress do? Let us start by 
lifting the minimum wage. The House has passed legislation to 
lift the wage to $15 by 2025 and give 33 million Americans a 
raise. It is time for the Senate to follow suit.
    We should expand programs and initiatives that we know 
work, like the Earned Income Tax Credit, and the Child Tax 
Credit. The EITC fees substantially increase employment among 
single mothers and reduce poverty levels for their families.
    We should make the Child Tax Credit fully refundable to 
allow the poorest families to receive the full benefit. The 
Working Families Tax Relief Act, which expands both the EITC 
and CTC, would benefit 49 million children, including 2.7 
million from my home State of New York.
    And we should strengthen the Supplemental Nutrition 
Assistance Program (SNAP). SNAP not only provides a healthy 
foundation for America's current and future workforce, it is 
also an investment in our economy. Every dollar of SNAP 
generates more than one-and-a-half dollars in increased GDP.
    And finally, we should join the rest of the world and 
promote paid leave for the birth of a child. There are only two 
countries in the world that do not provide paid leave for the 
birth of a child: America and Papua New Guinea. And my bill, 
which was included in the National Defense Authorization Act 
that passed the House this summer, is a good start. It would 
provide 12 weeks of paid leave to Federal employees, a model 
for the rest of the country to follow, hopefully, after the 
birth or adoption of a child, or to care for a family member 
who has serious illness, or for illness yourself.
    Raising a family is hard and rewarding work. We need to do 
more to provide workers with tools to balance their work and 
family responsibilities.
    I appreciate the Chairman's statement on flex time, how 
that would be very helpful for families. Today's hearing and 
our witnesses' testimony will shed light on the actions we can 
take to make raising a family more affordable. It is incredibly 
important for the future of America, for the future of American 
families, and for the American Dream.
    And I yield back.
    [The prepared statement of Vice Chair Maloney appears in 
the Submissions for the Record on page 44.]
    Chairman Lee. Thank you, Vice Chair Maloney. I would now 
like to introduce our distinguished panel of witnesses. Before 
I do that, I want to just address a couple of housekeeping 
matters.
    This is a Joint Committee of both Members of the House of 
Representatives and of the Senate. As fate would have it, both 
the Senate and the House of Representatives have decided to 
call votes right in the middle of this hearing. And so you may 
see Members of the House and of the Senate leaving and coming 
back. That has nothing to do with anything other than the 
responsibility to continue to vote while our colleagues are 
voting. Members of this Committee, particularly those who are 
here, are very interested in this hearing. We will be here for 
every bit of time that we possibly can. I did not want anyone 
to be alarmed when they see Members filtering in and out.
    Okay, I would like to introduce our witnesses now. First we 
have Mr. Lyman Stone who is an Adjunct Fellow at the American 
Enterprise Institute, and Research Fellow at the Institute for 
Family Studies. Mr. Stone has written on migration population 
dynamics and regional economics. His work has been covered in 
The New York Times, The Washington Post, The Wall Street 
Journal, and numerous local outlets. Welcome, Mr. Stone.
    Next we have Mr. Ryan Bourne, who is the R. Scharf Chair 
for the Public Understanding of Economics at the Cato 
Institute. Prior to his role at Cato, Mr. Bourne was head of 
public policy at the Institute of Economic Affairs and head of 
Economic Research at the Center for Policy Studies in the U.K. 
Mr. Bourne has written on a number of economic issues such as 
fiscal policy inequality, minimum wages, and rent control. And 
he has appeared on BBC News, CNN, and Sky News. He also writes 
weekly columns for the Daily Telegraph and the London paper 
City AM. Thank you for being with us, Mr. Bourne.
    Next we have Dr. Jane Waldfogel, who is the Compton 
Foundation Centennial Professor for the Prevention of 
Children's and Youth Problems at Columbia University School of 
Social Work, and the Co-Director of the Columbia Population 
Research Center. Dr. Waldfogel has written extensively on the 
impact of public policy, on the well-being of children and 
families. Her work has focused on work-family policies, 
inequality in early childhood care and education, poverty, 
social mobility, and the Black-White achievement gap. She is 
the author of eight books, and has published numerous articles 
in peer-reviewed academic journals. Welcome, Dr. Waldfogel.
    And we have Ms. Kristin Rowe-Finkbeiner, who is the CEO/
Executive Director and Co-Founder of an organization called 
MomsRising. Ms. Rowe-Finkbeiner has been involved in public 
policy and grassroots engagement for over two decades, and has 
received numerous awards for her work. She is also an award-
winning author of books and articles, a frequent public 
speaker, media contributor, and host of the Radio Program 
Breaking Through with Kristin Rowe-Finkbeiner, powered by 
MomsRising. Thank you, Ms. Rowe-Finkbeiner.
    We thank all of you for joining us today. We look forward 
to hearing your testimony and we will now hear from you in the 
order in which you were introduced.
    Go ahead, Mr. Stone.

    STATEMENT OF MR. LYMAN STONE, ADJUNCT FELLOW, AMERICAN 
  ENTERPRISE INSTITUTE, RESEARCH FELLOW, INSTITUTE FOR FAMILY 
                      STUDIES, WILMORE, KY

    Mr. Stone. [Off microphone].
    Chairman Lee. Just hit the button until it turns red.
    Mr. Stone. Thank you. It is an honor to be here. Thank you 
for inviting me, Mr. Chairman, and Ms. Vice Chairman. It is an 
honor to be here today to testify on topics that are important 
to American families.
    I am affiliated with the American Enterprise Institute, the 
Institute for Family Studies; however, for my testimony today 
the views offered are solely my own. Most of my written 
testimony discusses fairly concrete questions of family 
affordability. And the upshot is that, contrary to popular 
narratives, child rearing in America is not really that much 
more expensive than in the past. Some elements of raising a 
family have gotten more expensive, but the evidence suggests 
that the problem facing families is not simply a budget crunch.
    According to a wide variety of surveys, the average 
American woman says she wants to have around 2.3 to 2.5 
children. This value has been approximately stable for 30 
years. And yet, if current birth rates hold, the average young 
American woman today will only end up having about 1.7 
children. That means that for every 10 women in America, there 
will be about 6 missing children.
    This is a new problem. From 1990 to 2007 the fertility gap 
was consistently just one-third as large. So what is going on? 
Instead of affordability, we should be discussing 
achievability. What is holding people back from having the 
family they reliably say they want in surveys? The answer is 
basically marriage.
    Increasingly postponed marriage can account for at least 
half of the increase in the fertility gap over the last decade, 
and virtually 100 percent of the increase since 2000. But 
incentivizing marriage is a tricky question in a diverse 
society.
    Americans are justifiably uncomfortable with being lectured 
about getting hitched by anyone, especially the Federal 
Government. But luckily there are some good policy options 
available.
    First of all, it must be said the Federal Government 
already has a marriage policy. And that policy is this: Working 
class people should not get married, but middle class and 
wealthy people should.
    This is the policy stance of the Tax Code, of our welfare 
programs, of almost everything the government does. The Tax 
Code gives you a handy marriage bonus if you have a CEO in the 
family, as their spouse is unlikely to earn an equivalent 
amount and our tax brackets are of greatest benefit to families 
with the most lop-sided spousal incomes.
    But if you get the EITC, getting married could reduce your 
benefit by thousands of dollars. For two working class people 
with similar incomes, there is a very real tax on marriage. In 
my written testimony, I show how the marriage penalty can 
amount to 15 or even 25 percent of a family's income.
    It is no mystery why working class Americans are getting 
married less. To be clear, the problem here is not government 
benefits per se, but their eligibility rules that discourage 
working class people from marrying. And the result is 
neighborhoods with scattered families, inconsistent fathers, 
overworked mothers, and diminished opportunity for children. 
And, additionally, fewer kids overall.
    So there is a very real way to make family life more 
achievable: Fix the massive government bias against marriage, 
and especially working class marriage.
    The second response to the marriage-first explanation for 
decreased family achievement is to reconsider our 
justifications for policies like the Child Tax Credit. The 
justification for the Child Tax Credit is not that parents are 
inherently cash-strapped, but rather that parenting is 
inherently valuable to society. In other words, we should have 
a parenting wage, because parenting is important work, and 
workers deserve to be paid.
    How we provide such a wage may vary, but we as a society 
should treat parents more generously than we presently do, and 
in a way that explicitly communicates to parents that we see 
parenting as worthy labor.
    When societies provide a parenting wage, the fertility gap 
shrinks. Now if there's not also a change in marriage norms and 
behavior, fertility rates won't rise by a lot. So the best 
strategy is a one-two punch. For family achievability to 
improve in America, it is vital that we (1) end penalties for 
working class marriage, while (2) increasing our social 
commitment to the work of parenting by providing a parenting 
wage. And whatever happens to fertility rates?
    The children who are born are born into a society of 
greater opportunity, healthier families which engages in a 
valuable public catechesis. Parenting matters.
    Thank you.
    [The prepared statement of Mr. Stone appears in the 
Submissions for the Record on page 47.]

  STATEMENT OF MR. RYAN BOURNE, R. EVAN SCHARF CHAIR FOR THE 
PUBLIC UNDERSTANDING OF ECONOMICS, Cato INSTITUTE, WASHINGTON, 
                               DC

    Mr. Bourne. Mr. Chairman, Members of the Committee, thank 
you for inviting me to testify today.
    Ensuring that a family can be raised affordably in America 
should be an uncontroversial public policy objective. Yet 
government policies at the Federal, State, and local levels 
today raise prices of basic goods and services to the 
disproportionate financial detriment of poor households and 
families with children.
    Households across the income spectrum spend large amounts 
on goods and services, but at their most basic should be 
considered necessities--items such as food, shelter, transport, 
clothing, utilities, and often child care. The average 
household in the poorest 20 percent by income allocates 57 
percent of its spending toward shelter, food, transport, and 
clothing alone.
    The average married family with young children allocates 53 
percent. Any meaningful analysis of family affordability must 
therefore consider the determinants of prices in these and 
other important product markets.
    In recent years, housing and child care affordability have 
become particularly pertinent political issues, given their 
high toll on family budgets. High housing and child care prices 
are often deemed market failures, necessitating corrective 
government intervention, price controls, or subsidies.
    But in both those markets, existing government regulations 
actively constrain supply, in turn raising prices. Extensive 
academic work has shown how overly restrictive local land use 
planning and zoning laws constrain new housing building, 
particularly in major cities.
    As demand for housing rises, an unresponsive supply of 
homes drives up the market price of housing services, forcing 
down-sizing, longer commutes, or higher rents and mortgage 
payments on poorer families.
    Lesser known is the State-level child care staffing 
regulations, notably restrictive staff-to-child ratios, and 
qualification requirements for workers which reduce the supply 
of child care centers in poorer areas, driving up prices and 
reducing formal care options for families.
    Again and again one finds the same pattern of government 
policies increasing prices. The Federal sugar programs, milk 
marketing orders, and ethanol mandates raise the price of 
families' groceries. Federal fuel standard regulations and 
State-level automobile dealership laws inflate the cost of 
driving. Protectionist tariffs raise retail clothing and 
footwear prices, and State occupational licensing laws create 
barriers to entry for workers, raising the prices of services 
from hair braiding to dentistry.
    My research has sought to aggregate the price effects of 
all of those policies stated. Using very cautious assumptions, 
I find that combined they raise prices faced by typical poor 
families by anywhere between $830 and $3,500 per year directly. 
That is between 7 and 30 percent of average after-tax income 
for households in the bottom quintile. Nor is that list 
comprehensive of the regulatory areas where government action 
raises prices. And it also does not consider the potentially 
huge indirect costs.
    We know, for example, that elevated housing, child care, 
and transport costs make it more physically and financially 
difficult for families to access jobs with higher wages.
    Undoing the worst of these price-inflating regressive 
regulations could therefore benefit poor families considerably. 
For example, estimates suggest that relaxing the average 
mandated staff-to-child ratio by just one child across all age 
groups could reduce child care prices by ten percent or more.
    Addressing government policies that drive high prices at 
source would also dampen the demands we see for risky rent 
control measures, affordable housing mandates, higher minimum 
wages, government subsidized child care, and new tax credits, 
or expanded allowances.
    My main message today is therefore simple: Before proposing 
new or expanded Federal programs, we should acknowledge that 
important pro-market reform levers already exist to improve 
family affordability, particularly at the State and local 
levels of government.
    These regulatory changes, especially in housing and child 
care, would not require yet more Federal borrowing, nor do they 
come with the risks associated with wage and price controls. 
Such an agenda may not be the full or final answer to the 
challenge you are considering, but again before reaching for 
new programs or regulations we should at least attempt to undo 
the harm caused by existing interventions.
    [The prepared statement of Mr. Bourne appears in the 
Submissions for the Record on page 65.]
    Chairman Lee. I need to go vote. I am going to pass the 
gavel over.
    Senator Heinrich [presiding]. Okay, so having come in late, 
okay, Dr. Waldfogel, please continue your testimony. And, Ms. 
Rowe-Finkbeiner, you're next? Okay, go right ahead.

STATEMENT OF DR. JANE WALDFOGEL, COMPTON FOUNDATION CENTENNIAL 
PROFESSOR FOR THE PREVENTION OF CHILDREN'S AND YOUTH PROBLEMS, 
    COLUMBIA UNIVERSITY SCHOOL OF SOCIAL WORK, NEW YORK, NY

    Dr. Waldfogel. Thank you. And thank you for inviting me to 
speak with you today. I have spent the past 25 years studying 
policies to support families and promote child well being, 
especially for the eleven-and-a-half million children in 
poverty, and the 27 million just above the poverty line.
    Much of my recent work uses the Census Bureau's new 
Supplemental Poverty Measure which allows us for the first time 
to gauge the anti-poverty effects of the full range of policies 
that Congress has enacted. That work makes it clear that two 
sets of policies are critically important: Refundable tax 
credit--EITC, and the Child Tax Credit--move 4.5 million 
children out of poverty. SNAP and other food and nutrition 
programs move 2.4 million children out of poverty.
    We also have good evidence that these policies reduce 
family stress and improve child health and development. But 
income poverty is not the only challenge that families face.
    Since 2012, with the support of the Robin Hood Foundation, 
our group at Columbia has been surveying New York City 
residents. We find that poverty is just the tip of the iceberg. 
While 1.6 million New Yorkers are poor, 4.4 million face 
poverty or material hardship or serious health challenges. So 
it is not just families below the poverty line who struggle to 
put food on the table, pay their bills, or cope with ill 
health.
    So what can we do to better support American families? We 
need to start by recognizing that the majority no longer have a 
stay-at-home caregiver. But our public policies have not kept 
pace with this reality. The Family and Medical Leave Act still 
provides only unpaid leave to only 60 percent of the workforce. 
Federal child care subsidies reach only 15 percent of low-
income families who need them.
    Employer policies address some of the gap, but mostly for 
more advantaged employees. While 40 percent have access to some 
paid family leave, those who are low income, part-time, or 
Hispanic, are much less likely to be covered. Only a tiny 
share, about 10 percent, receive any help from employers to pay 
for child care. But we know from a large body of research that 
these policies matter.
    When employees have access to paid family leave, they are 
much more likely to be employed. They have higher earnings. 
Mothers are less likely to be depressed. They breastfeed for 
longer. Fathers are more likely to be engaged in caring for 
children. Infant mortality and hospitalizations fall.
    Opinion surveys consistently show that Americans favor paid 
family and medical leave. These policies are also endorsed by 
employers. My colleagues and I have been serving employers in 
states with these laws, including small employers who are often 
missing from such surveys.
    In three states with paid-leave laws, Rhode Island, New 
Jersey, and New York, we found that two-thirds of employers 
were supportive of them. The evidence on child care is also 
extensive and clear. High-quality child care improves 
children's health, their cognitive development, their social 
development--especially for disadvantaged children. Yet too few 
Americans can afford it, especially in early childhood.
    When more subsidies are available, parents are more likely 
to be employed, reducing poverty and promoting family 
stability. Our estimates suggest that universal child care 
could reduce poverty by a third among families paying for child 
care.
    But we also need to look at what government can do to help 
families where a parent is not working, or not able to work 
enough hours. Public programs like SNAP and private programs 
like Food Pantries play a crucial role, but families also need 
cash to buy their children clothing and school supplies, pay 
rent and utilities.
    For this reason, virtually all of our peer countries have 
some form of universal child allowance or child benefit, paid 
monthly, or more frequently, to all families with children.
    Our Child Tax Credit is the closest policy we have to this, 
but unfortunately it leaves out the lowest income for whom it 
would have the biggest impact. Indeed, 23 million American 
children, 1 in 3, live in families who earn too little to 
receive the full Child Tax Credit of $2,000 per child that was 
authorized under the recent Tax Cuts and Jobs Act. This 
includes over half of Black and Hispanic children, and close to 
half of young children and rural children.
    So in summary, while there is ample evidence about the 
critical role of safety-net policies like the EITC, the Child 
Tax Credit, and SNAP, as well as the efforts of groups like 
Robin Hood, it is also clear that we need to do more. It is 
high time we joined our peers in providing paid family and 
medical leave, quality affordable child care, and a universal 
child allowance.
    [The prepared statement of Dr. Waldfogel appears in the 
Submissions for the Record on page 70.]
    Senator Heinrich. Go ahead, Ms. Rowe-Finkbeiner.

    STATEMENT OF MS. KRISTIN ROWE-FINKBEINER, CEO/EXECUTIVE 
       DIRECTOR AND CO-FOUNDER, MOMSRISING, KIRKLAND, WA

    Ms. Rowe-Finkbeiner. Thank you. Chairman Lee, Vice 
Chairwoman Maloney, and Members of the Joint Economic 
Committee.
    I am Kristin Rowe-Finkbeiner, Executive Director of 
MomsRising, an organization with over a million members, 
including members in every State, working to increase family 
economic security.
    We are on the front lines of this crisis in America. 
Experts agree, it is getting more and more expensive to raise a 
family, and that has dire consequences. Our country, our 
workforce, and our economy have changed, but our policies are 
woefully out of date, and families are suffering as a result. 
And, good news, this crisis is solvable. And the policies 
MomsRising supports will boost families and our economy alike.
    The work we do lifts dads, grandparents, people with all 
types of families, and of course moms. The situation is urgent. 
At MomsRising we hear from people experiencing this crisis each 
day. Stories like this one:
    Jamie and her husband juggled three part-time jobs between 
the two of them, and even then could not afford child care. 
Jamie could only work when her husband was home with their 
toddler. And until they started getting SNAP, their four-year-
old and Jamie herself often had to go without healthy food.
    Nobody, let alone anyone holding multiple jobs, should 
struggle to put food on the table. But too many families face 
stark choices like Jamie's. A full one-in-six children in our 
country now live in food insecure households.
    You see, Jamie is not alone. One-in-three households are 
now paying more than 30 percent of their income for housing, 
and more than half are renters. College tuition has tripled 
since the 1980s, and student debt now exceeds a trillion 
dollars.
    Child care now costs more than public college in most 
states, and Black and Latinx families often end up having to 
spend more of their income on child care than anyone else. 
Meredith, from Florida, and her husband planned for years but 
still ended up with student loans, health care, child care, and 
housing costs that made it hard to stay afloat. Their student 
loans cost as much as a car payment. They paid $1,000 per month 
for child care. They live with her parents to try to save 
money.
    The terrible truth is that as costs and net productivity 
have been rising, wages have been largely stuck for decades. 
This means wealth inequality is increasing. The racial wealth 
gap is persisting. And most people raising children in America 
are facing a financial crunch.
    On top of this, women are being pushed even further behind 
by wage, hiring, and advancement discrimination. Women of all 
races on average are paid just 80 cents on a man's dollar, and 
moms of all races on average experience increased wage 
discrimination, earning an average of just 71 cents to a dad's 
dollar, with moms of color paid even less due to structural 
racism.
    This is happening despite studies showing a direct 
correlation between high levels of women in corporate 
leadership and higher profits.
    Families urgently need women's wages, as does our economy. 
Women became half of the full-time labor force in the last 
decade, and three-quarters of moms are now in the labor force, 
more than half of whom are the primary breadwinners.
    Further, in our consumer-fueled economy, women and moms 
make nearly three-quarters of purchasing decisions. So when 
women are not paid fairly and do not have funds to spend, our 
entire economy suffers.
    It is long past time to move our policies into the 21st 
century to match our modern labor force so families and our 
economy can thrive. We need to address these challenges from 
multiple angles: better, fairer wages; updates to our outdated 
policies; and we need to make basic necessities more 
affordable. And, good news, there is growing momentum for 
policy change that solves many of these issues.
    For instance, dozens of states and municipalities are 
passing paid family medical leave, earned sick days, and pay 
equity laws. But to really move the needle, we need change at 
the Federal level. Because when this many people are having the 
same problems at the same time, we do not have an epidemic of 
personal failings; we have a national structural issue that we 
can and must solve together.
    Specifically, we need to move quickly to pass the FAMILY 
Act so people can afford access to paid family medical leave. 
The Child Care for Working Families Act. The Working Families 
Tax Relief Act. The Paycheck Fairness Act. The MOMS Act. And 
the Maternal CARE Act, to address maternal mortality and the 
racial disparities that drive it. The Healthy Families Act, so 
people can earn paid sick days. The Pregnant Workers Fairness 
Act, and the National Domestic Workers Bill of Rights.
    We also need to raise the Federal minimum wage and, 
importantly, have it cover all workers; ensure everyone has 
access to health care coverage, including reproductive health 
care. Make college and housing affordable. End mass 
incarceration. And invest in children and families, including 
with SNAP, WIC, the EITC, CTC, TANF, Head Start, and Medicaid, 
all of which inject funds into our economy.
    The list is long, but important. These policies work for 
families and deliver significant returns for our economy.
    For instance, for every dollar invested in child care, 
there is a return on investment of up to $9. You cannot find 
returns like that anyplace else. When we update our outdated 
policies, we all win, each and every one of us. We can and we 
must make it more affordable to raise a family in America, and 
I know together we absolutely will make that happen. Thank you.
    [The prepared statement of Ms. Rowe-Finkbeiner appears in 
the Submissions for the Record on page 76.]
    Senator Heinrich. I want to thank you all for your 
testimony today. We have votes taking place both in the House 
and Senate. I am going to try to get through a few of my 
questions, and then either Chairman Lee will be back to take 
over the gavel, or we will take a real short recess, depending 
on how long that takes.
    I want to start with you, Dr. Waldfogel. I was curious. Are 
you familiar with the two-generation approach to reducing 
intergenerational poverty?
    Dr. Waldfogel. Yes.
    Senator Heinrich. What are your thoughts on its role in 
potentially taking those Federal policies that already exist, 
taking aside the need for additional policies, but better 
coordinating those to support the development of families and 
emerging from that cycle of poverty?
    Dr. Waldfogel. I think--well, as you probably know, it is a 
model that is attracting a lot of interest. There is a very 
successful program underway in Tulsa, Oklahoma, directed by one 
of my colleagues, Jeanne Brooks-Gunn and her colleague Lindsay 
Chase-Lansdale. I mean it's a win/win. So they're taking proven 
early childhood education programs which really help engage 
parents, and they are matching those and tying them to 
employment and training programs for the parents. And not just 
random, you know, generic employment and training, but in the 
health care sector or, you know, sectors where there is really 
a demand.
    We know from research that when parents are involved in 
education and training, their children do better in school, and 
they do better in preschool. And, likewise, obviously parents 
are going to do better in employment, education, and training, 
if their children are in stable child care.
    I think we do not do enough of that. We do not do enough of 
thinking across programs. And it is a really promising model.
    Senator Heinrich. Oh, I appreciate your comments on that. I 
know that in New Mexico we have seen groups like United Way and 
others that have really tried to pull these pieces together and 
act as a coordinator to support the family as a whole that has 
had some very positive outcomes. And we have seen that in both 
liberal and conservative states, and very different politically 
different governments to have real success with this approach. 
And it is certainly something I have introduced legislation on 
and continue to hope to push.
    One of the other challenges that we have in my State, and I 
think this is becoming an issue all across the country, is that 
in New Mexico more than 10 percent of children are actually 
being raised by grandparents. And historically extended 
families have been an incredibly important part of our culture 
and represent a significant asset to all of our communities.
    But what should we be looking at within the Federal 
Government, and states, to make sure that as we are supporting 
families we are not just thinking about mothers and fathers, 
especially in those cases where another family member is 
actually the direct child care provider to those kids?
    Dr. Waldfogel. It is a really important question. I mean 
the statistics that I was reciting about only 60 percent of 
workers having access to the FMLA, only 40 percent of workers 
having some employer-paid family leave, only 15 percent have 
access to Federal child care subsidies even though they are 
low-income ineligible. That pertains to parents who are 
entitled to these programs. Grandparents are often boxed out 
entirely. So there is a lottery to get these things in the 
first place, but the grandparents are not even in the lottery 
because they are categorically ruled out.
    So it is just heartbreaking as you hear these grandparents 
who have chosen to take on, or had to take on these 
grandchildren, and yet are not able to get access to the 
programs. So, yes, we really need to clean it up.
    Under the FMLA and the various State paid-family leave 
laws, there is a lot of variation in who counts as ``family,'' 
and there is a lot of debate about who counts as family. But 
for sure we ought to be including grandparents.
    Senator Heinrich. You think we should be tying those 
benefits to the child, so long as they have a legitimate 
caregiver.
    Dr. Waldfogel. Absolutely. Absolutely. And, you know, the 
same thing with EITC, with the Child Tax Credit.
    Senator Heinrich. Exactly right. Many of these people are 
literally well into their retirement years and have fixed 
incomes, and yet have all of the incredible burdens of trying 
to not only raise a child but then after that also help them 
through their education.
    Dr. Waldfogel. Yes.
    Senator Heinrich. Ms. Rowe-Finkbeiner, I wanted to ask you 
if you could expand some on how paid family leave impacts the 
presence of fathers and other caregivers in the life of a 
child, and what impacts then come from that?
    Ms. Rowe-Finkbeiner. Access to paid family medical leave is 
a win/win/win/win for families, businesses, and our economy. It 
is one of those true policies that just makes you want to clap 
and give it a standing ovation. Because we see that when 
families have access to paid family leave, and that actually if 
dads take the paid family leave as well, then we see those wage 
gaps between women and men, and between moms and dads, go down.
    And when we have pay parity, specifically if women had pay 
parity, then 50 percent of children would be brought out of 
poverty. Our GDP would be increased by 3 percent. And we would 
add more than $500 billion into our economy.
    So making sure that dads also have time with children 
actually helps moms rise. And so it is very important. When we 
look at some of the other countries, and we did note that most 
other countries have some form of paid family leave, except the 
United States of America, we see that many have found that 
having dads have access to paid family leave is beneficial for 
the whole economy because again when wage gaps narrow then 
women have more money to spend--and since women are making the 
majority of our consumer purchasing decisions in an economy 
where 72 percent of our GDP is based on consumer purchasing 
decisions, we all do better when women do better.
    But if we have this wage gap with moms, and it is 
significant, then we all do worse overall. So some of the other 
countries who have had paid family medical leave in place for 
longer, actually often offer a bonus package. If the dad takes 
leave, then the family overall would get an additional amount 
of paid family medical leave because they found that it boosts 
the economy so much.
    So other things about this win/win of this policy, and 
again I love this policy, is that we see that businesses are 
actually helped out with retention, productivity, and they have 
lower re-training costs.
    We also see that taxpayers are helped out. In some states 
like California where they have had paid family medical leave 
for longer than others, we can see that there is a 40 percent 
lower need for SNAP and TANF because people have that bridge 
moment of having those funds come in as child care costs more 
than college, and infant child care costs are extraordinarily 
high. So having that access to paid family leave at that 
crucial time when a new baby arrives is very important.
    But not to forget what you also brought up, which is the 
sandwich generation. We need paid family medical leave, and we 
need it for all workers. And we need grandparents to be able to 
take it, as well as parents and other family members.
    Senator Heinrich. So in comparing in places that have 
instituted paid family leave, medical leave, and those who have 
not, there have been consistent data trends showing an actual 
increase in economic productivity?
    Ms. Rowe-Finkbeiner. Yes. And actually, Dr. Waldfogel did 
the original research, which I found many years ago when I 
first found out about the mom wage gap, which is huge--moms are 
making 71 cents to a dad's dollar, and moms of color, due to 
structural racism, are experiencing increased wage hits, with 
Latinx moms making as low as 46 cents to every dollar paid to 
white non-Hispanic fathers.
    Senator Heinrich. With effectively the same resume, right?
    Ms. Rowe-Finkbeiner. With the same resume. And we can talk 
about those studies, because I love those studies of two 
resumes where the only difference is that one is a mom and the 
other is a non-mom. This was a study done by Dr. Shelley 
Correll, and she found that you are 80 percent less likely to 
be hired if you are a mom and you are offered $11,000 lower 
starting salary, whereas dads get a wage boost.
    So getting rid of this wage hit when we have so many moms 
being the primary breadwinner is so important to our families 
and our economy.
    Senator Heinrich. And does that wage gap persist even after 
mothers return to work?
    Ms. Rowe-Finkbeiner. Yes. The wage gap persists forever. 
And so there are policies like the Paycheck Fairness Act, which 
we also need to pass, and what that does, one of the important 
things that that does, is you cannot use prior salary history 
to create current salary levels, so the compounded wage hits 
that you have experienced over time do not determine your 
future salary history.
    But one of the things that Dr. Waldfogel found--and I do 
want to bring this to her, because she is brilliant at this, as 
many other things, is that there is no single silver bullet 
solution. We need paid family medical leave. We need 
affordable, accessible child care. And we need sick days. And 
we need access to affordable health care.
    So families are crunched. We have a modern workforce, and 
our public policies are stuck in a time that maybe never 
existed. And so we need to bring up our workplace protections, 
raise our floor for workplace protections, and then we will see 
those wage gaps narrow. And then we all win.
    Senator Heinrich. You might say there is no silver bullet, 
but there may be silver buckshot.
    Ms. Rowe-Finkbeiner. Exactly. Exactly. And we can do it. In 
the past in the United States of America we have passed 
packages for many things that have many different solutions 
together. We can pass packages and independently pass these 
laws to make the changes that we need. It is long overdue.
    Senator Heinrich. I want to thank you all for your 
testimony. We are going to take a really quick recess here for 
about 10 minutes while the Chairman returns, so I can go vote 
as well. Thank you.
    [Whereupon, at 3:17 p.m., a brief recess is taken.]
    [The session resumes at 3:19 p.m., this same day.]
    Chairman Lee [presiding]. We are now going to reconvene. 
Thank you for your patience, as both the Senate and the House 
are in the middle of votes, and I am grateful to my colleagues 
from both Houses and both sides of the aisle in sharing the 
gavel as we pivot back and forth to cast votes.
    We will now begin five-minute rounds of questions, or in my 
case it may be longer than that, depending on how long it takes 
my colleagues to get back, which is kind of the upside of this 
sort of thing happening. It can result in a time period 
windfall for those of us privileged enough to be here.
    Mr. Stone, let's start with you. At the end of your 
testimony you say that our laws should communicate to the 
citizens that we as a society, as a country, quote, ``see 
parenting as worthy, dignified, and important work,'' closed 
quote.
    In your opinion, would our laws do a better job of 
communicating that message if we allowed parents to draw 
forward Social Security benefits immediately following the 
birth of a child so that mothers and fathers alike could access 
their own savings at such a pivotal moment?
    Mr. Stone. Absolutely. I share the view expressed by 
several people on this panel that having our lack of any 
solution for leave time is a serious issue. And having the 
option to do it in an actuarially sound way that is not 
inhibiting a mother's odds of being hired, for example, because 
when you foist the bill onto a company, the observed effect is 
diminished hiring of mothers, which is not the outcome that any 
of us want.
    If you pay for it out of public coffers, then you have 
difficulty with passing the bill, frankly, due to essentially 
where is the money going to come from? So doing it in a way 
that is long run budget neutral is quite reasonable, I think, 
and is definitely a great improvement over what we have now in 
terms of communicating to parents and to potential parents that 
society is with them on this. That you are not doing this work 
alone.
    Chairman Lee. Thank you. That is somewhat of a conclusion 
that I have reached. I have done a lot of work with Senator 
Joni Ernst from Iowa, and with Ivanka Trump at the White House, 
in trying to move that idea forward. The idea here is that this 
is money that the parents themselves already are entitled to. 
The question is what does the government do with that money 
between the time that it is earned and the time that they 
happen to retire.
    It is my belief, and that of the individuals I have 
mentioned, that parents ought to have the option of deciding to 
tap into some of that at the time they have a child.
    In your testimony you speak about the marriage penalties 
for low-income families in our Tax Code, and in means-tested 
welfare programs funded by the Federal Government. You conclude 
that in effect the Federal Government has put its thumb on the 
scales against working-class marriage.
    What are some of the most important policy fixes that you 
can think of that would help remove the anti-marriage bias in 
our Tax Code in our Federal welfare system?
    Mr. Stone. So in the example families that I provide in my 
written testimony, most of the penalty that they experience 
comes from the Earned Income Tax Credit, as well as to some 
extent from SNAP and from housing vouchers, or housing benefits 
generally.
    The Earned Income Tax Credit is actually procedurally a 
simple fix, right? Just double the eligibility thresholds if 
you get married. The problem is that this costs somewhere 
between $100 and $250 billion per year, which is--yeah, those 
are large numbers, right?
    Chairman Lee. You are not going to fund that out of those 
cushions----
    Mr. Stone. Nope, you are not. So to do this, there is not 
just the simple fix one thing, right? You would have to step in 
and say, well, okay, we cannot afford the current level of 
generosity for single parents if we extend it in the same way 
for married parents. So you would need to do a wider, a wider 
fix.
    Now a simpler thing would be to simply, instead of having 
the Earned Income Tax Credit be sort of a backdoor family 
support program, just replace it with a simpler wage subsidy. 
And then also route more money through either the Child Tax 
Credit or some other child-specific focused benefit.
    It is not clear why we would say because you have children 
the government will be even more determined to support your 
work outside the home. We of course want to support people with 
children, but I do not think our desire to support children is 
necessarily contingent on them, in the case of the EITC, being 
unmarried and working outside the home.
    There is no clear rationale for this structure. So EITC is 
a big one, but you see similar problems in every means-tested 
program. So you will have a similar issue with--really, you 
cannot just change one or two thresholds. You have to, 
statutorily in most cases, rewrite the whole program.
    Chairman Lee. Thank you. The Tax Cuts and Jobs Act that 
Congress passed in 2017 includes a doubling of the Child Tax 
Credit, and an expansion of its refundability to cover the 
payroll tax liability and counteract the parent tax penalty.
    In your written testimony, you wrote that a model family, 
Liam and Emma, are trapped out-of-wedlock by the marriage 
penalties in our Tax Code. So this couple you describe, Liam 
and Emma, are effectively trapped out of marriage as a result 
of that. You note that the only tax provision that did not 
penalize them is in fact the Child Tax Credit.
    So how could this family have fared without the Child Tax 
Credit expansion? And why is it important for the rest of our 
Tax Code to treat Liam and Emma with similar fairness?
    Mr. Stone. So in this case, what happened was that when, in 
this case Emma, is the one who I have as the custodial parent 
before marriage, and she in claiming two child----
    Chairman Lee. I mispronounced that name? I thought that 
was----
    Mr. Stone. It was Liam and Emma. I just picked the most 
common male and female birth names of 2018 and assigned them. 
But so she is the custodial parent for these two children, but 
her income, which is a modest income, I think it is like 
$16,000 is what I put in, but it is not enough for her to 
actually get the full refund--the full nonrefundable portion of 
the Child Tax Credit.
    Now once they get married, once Liam and Emma marry, their 
combined income is enough. And also, because they get married 
and their EITC is smaller, they can sort of score more 
refundable on the other side because those two offset to some 
extent. You cannot--depending on your income, you cannot always 
get the refundability of both--or the nonrefundable section is 
offset.
    So in this case, actually the Child Tax Credit expanded in 
generosity when they got married because of how the 
nonrefundable portion interacts with the refundability of the 
Earned Income Tax Credit. So it is sort of some thorny math.
    But this family, they lost money on the EITC, was their big 
loss, right? That Emma was getting $5,000 before. But when they 
get married, I believe they drop to none, or virtually no EITC 
benefit. And at the same time, they lose some means-tested 
benefits on the other side, which is to say that the Tax Code 
is saying even though you two perhaps love each other, even 
though you two have jobs, they are not making large amounts of 
money but a couple making $36, $37, $38,000, there is no reason 
they should not be able to have the American Dream.
    Maybe they would like to be raising these children together 
and would like to be married, but the Tax Code says, sorry. If 
you get married, you are going to lose $10,000.
    Chairman Lee. We should not be punishing them for that.
    Mr. Stone. Right. We are punishing responsible decisions 
that I think everyone in the room thinks these people, they 
want this. It is not the State's job to get between them in 
raising their children together.
    Chairman Lee. Right. Thank you.
    Senator Cassidy.
    Senator Cassidy. Chairman Lee, thank you for putting this 
on. This past spring, Senator Sinema and I announced a bi-
partisan solution--thank you for nodding your head ``yes.'' You 
are familiar with it--to help working families. And I would say 
it is currently the only common ground paid leave plan in the 
Senate.
    I am happy to report additional Republican and Democrat 
Senators are now supporting and working with us on legislative 
text we hope to introduce this fall.
    To give background, for many dual-income families, the 
first year following the birth or adoption is the most 
expensive. In subsequent years, less so. Just to kind of give 
context for our bill, the Tax Cut and Jobs Act that was just 
being discussed increased the Child Tax Credit from $1,000 to 
$2,000. So under our proposal, the family who has the newborn 
child gets $5,000. And they pull forward that benefit from 
subsequent years. So instead of $2,000 in year two of life, 
they would get $1,500. And on down until it is paid back.
    We like it. It does not raise taxes. Payroll taxes 
inherently are regressive. And so we avoid that. And it has no 
mandates upon the employer or the employee, and it does not 
increase the Federal deficit--de minimis, if it does at all. In 
fact, I think we heard from--one of you is from AEI. One thing 
that we learned when we did a symposium there is it may 
actually be beneficial to the government fisk, at least one 
theory which seems plausible. Because when the mother remains 
attached to the workplace, instead of going on public 
assistance, which has implications for the child and the mother 
long term, she remains attached and the accumulation of 
seniority and training allows her wage base to grow from that 
point, as opposed to be brought back and then begin to grow.
    So we think it has downstream benefits for mother and 
child. And by the way, it also extends to parents, to a father, 
but obviously it is the mother who breastfeeds, for example, so 
we anticipate that women will use it more often, which is why I 
use the feminine.
    So, Dr. Waldfogel, if I pronounced it correctly, you are 
nodding your head affirmatively, so I would just ask your 
opinion on that and any suggestions you would have to maker it 
better.
    Dr. Waldfogel. I have to say I am just so heartened to hear 
a discussion of two different proposals for paid family leave, 
so I just think it is fabulous that this is on the agenda in a 
really serious way and that we are having the conversation we 
are having about how to fund it. Because that really is the 
issue now.
    So this is a sea change from where we have been on paid 
family and medical leave. Where it used to be what is this 
thing, and should we do it? It is so heartening that we are now 
in a place where we are all in agreement that new parents ought 
to have some period of paid leave. And we are trying to figure 
out how to pay for it. So I just think this is incredibly 
heartening.
    So we have heard about a proposal where people could draw 
down from their Social Security, or people could draw forward 
their Child Tax Credit. I mean I have to say I have concerns 
about both those proposals, because as much as I would like to 
support new parents, and I think I have written about that more 
than anybody else over the last 25 years, so I absolutely get 
the importance of paid family and medical leave, but I really 
worry about what happens in the out-years when those benefits 
have been drawn down.
    Families with 2- and 3-year-olds also need the Child Tax 
Credit, as we have been discussing today. It is a huge anti-
poverty program, and I would hate to be robbing families later 
in childhood.
    Likewise, we used to have a big problem with elderly 
poverty in this country. We still have not completely tackled 
it. Social Security is the biggest anti-poverty program we 
have. And so I worry about families drawing down their Social 
Security because they want to do the best for their children--
--
    Senator Cassidy. Well just because--he had his turn, and I 
am going to keep on mine, so----
    Dr. Waldfogel. I have been studying, there are now eight 
states that have passed these payroll-funded paid family and 
medical leave laws. They are working really well. It is pennies 
per week to fund them. We have been talking to employers, 
including small employers. Every State we have talked to 
employers, two-thirds of them are supportive or very supportive 
of these laws. Another 10 or 15 percent, or 20 percent, are 
neutral. That means that just a tiny share of employers are 
opposed.
    The public is passing these things. I mean, legislators 
are----
    Senator Cassidy. Let me pause you for a second. I have 
limited time, so let me pause. I will also say, though, that if 
you are going to do it through a payroll tax, that will be 
regressive. And it is easy to speak of that which is de minimis 
for someone who is more affluent, but for a working family that 
so-called de minimis amount is actually significant.
    I will also say, and I think research shows, the more 
financial burden you put on an employer to employ somebody, the 
more likely they will figure out how to become more productive 
and lay folks off. So I think that there is a little bit of a 
false narrative that there is no cost on raising payroll taxes 
for a more generous benefit.
    But whereas we just raised the Child Tax Credit from $1,000 
to $2,000, and now we are going to concentrate a portion at the 
family's option on the year of the child's birth. But they will 
still receive more than they have been receiving, seems to be 
something which, yes, they receive less at their option, and 
it's more than they've been receiving of late.
    Mr. Stone, you've spoken I think of how pro-natal policies 
do not necessarily increase with more natal, if you will, 
increased fertility, suggesting, as I gather, that a financial 
decision of is a child too expensive, they choose not to have 
another child. But if you have, whatever form it takes, a child 
tax credit, would that be a pro-natal policy?
    Mr. Stone. So the research on pro-natal policymaking is 
that when countries spend money trying to get slightly higher 
fertility rate, that they do get a little bit of a bump, but it 
does cost a lot of money to get that increase.
    However, the most cost-effective means of bringing about 
some increase in the desired birth rate, the number of births 
women have and that they intend to have, is through front-
loaded benefits. That essentially giving people $10,000 up 
front does sort of get you--has a larger influence on child-
bearing decisions than $1,000 a year for 10 years.
    So this is more likely to have an impact on child-bearing 
decisions. Now there is a question: If you are paying that up 
front by taking it from later down the road, I am actually also 
sympathetic to the concern raised before that that family may 
need that money down the road. So you may front-load their 
decision here, and then they really need the money later.
    Senator Cassidy. Earlier you spoke nicely, or one of you 
spoke nicely of the interaction, but we do know that typically 
people have their children when they are at the kind of lower 
point of their earning potential----
    Mr. Stone. Well because income tends to rise over their age 
cycle.
    Senator Cassidy. Right. Particularly, again, as I spoke 
earlier, if you are able to maintain your attachment to the 
workforce with your training, et cetera. And so I think the, if 
you will, the kind of interaction that we anticipate is, yes, 
you are pulling forward if you wish, but because you maintain 
that attachment your salary continues to rise. And there is a 
little bit of a backfill that occurs from that.
    Also, acknowledging that first year of life is the more 
expensive year of life. I will take one more, since the 
Chairman just took a powder--and we also would point out, by 
the way, that we think CBO will not score ours as being very 
expensive because the money is already out there.
    And so what they may do in Sweden would be expensive for 
us. It will be the occasional child who dies before age 10, at 
which point the money is forgiven, but it will not be something 
more than that.
    I will thank you all for your time, and yield back to the 
Chairman.
    Chairman Lee. We are going to turn now to Mr. Heck. I am 
going to go cast the final vote and I will be right back.
    Mr. Heck.
    Representative Heck. Thank you, Mr. Chairman. My apologies 
on behalf of the House Members who have been over voting on 
legislation. So I am helicoptering in here without the benefit 
of context of what you all presented. I did have an opportunity 
to quickly peruse your testimony.
    I thank you all very much for being here.
    Mr. Stone, I guess I would like to start with you. I am 
certain that you have probably already talked about this, but 
unfortunately, again, I was not here. I am fascinated by your 
research finding a relationship between fertility rates and 
home ownership.
    By tolerating impediments to home ownership and decreased 
home ownership as we have in recent years, do we de facto have 
an implicit policy of lowering our fertility rate? Is that what 
you are suggesting, sir?
    Mr. Stone. So I don't know that it is specifically about 
home ownership. I think it is more about housing costs. So 
there are many ways to manage housing costs. It could be by 
buying an affordable home, or it could be by renting in a 
neighborhood that is very affordable.
    My concern is that housing costs are the one place where 
the amount that families spend on children is in fact being 
outpaced by price, where there is real, solid evidence of 
considerable financial stress on families in the housing 
sector. And that is driven--there is a lot of research on 
this--it is essentially driven by especially local policy. 
Choices about land use. Choices about where people can build, 
the codes that they build under, these sorts of things.
    My concern--I did not focus on that in my spoken testimony 
because this is largely a State and local choice. The extent to 
which anyone in Washington can fix this is, with all due 
respect to the building that we are in, somewhat limited.
    So it is a serious problem. There is an enormous amount of 
research suggesting that land use regulations and positive 
shocks to the price of housing, especially in the rental 
market, but in the home-owned market as well, have a negative 
impact on people's ability to achieve their family desires. 
This is a real concern. It is policy driven. But it is local 
policy. It is 50,000 municipalities that you need to convince 
to stop zoning against families.
    Representative Heck. So the correlation, the inverse 
correlation, is between price, irrespective of whether there is 
an equity position or not, and fertility?
    Mr. Stone. Yes.
    Representative Heck. So I have had the privilege the last 
two-and-a-half years to chair the New Democrat Coalition 
Housing Task Force, and we have come away with a couple of 
research-based findings that I think are relevant to this 
conversation.
    The first of which is that in the last 15 years the single 
largest increase in household budget has been for housing, more 
than health care, more than higher education. It is masked by 
the fact that those of us who have been in a place for a long 
period--a good portion of that 15 years, or been a long 15 
years, have not experienced this. But of all major household 
expenditures, the cost of rent or, conversely, the cost to pay 
your mortgage, has gone up faster than anything else that they 
are confronting, number one.
    And number two, that this problem is materially contributed 
to by a lack of supply of housing stock, which of course 
compels people to stay renting, which drives up occupancy 
rates, which then drives up rents, which cause more people to 
be rent-burdened, causes more people to require public subsidy. 
And in fact causes more people to be homeless.
    But I do not think either of those observations captures 
the insidious effect on the home ownership side of the deferred 
home acquisition by millennials. And we have measured this. It 
is pretty clear that the 28-year-old is more likely to be 
living upstairs at mom and dad's house than ever before.
    And why I never miss an opportunity to point this out is: 
In an era when defined benefit pension plans are falling 
through the basement, people's retirement security has been 
diminished. And the number one--the number one--asset that the 
average American invest in contributing to their retirement 
security is their home.
    Care to respond to my diatribe?
    Mr. Stone. Yeah. So there is a lot there. So the number one 
asset that many families are invested in is their home. The 
funny thing about owning a home, see, if you own a share of a 
company, then maybe you get dividends, or maybe you just get a 
report regularly and you're going to sell it later. The funny 
thing about owning a home is that your dividends come in the 
form of not getting rained on. And then you actually have to 
put a lot of extra money in it.
    It is this company that you own a part of, but you have to 
buy a new roof for the company every so often. And then you 
have to buy a new hot water company--or you have to buy a new 
hot water heater for that company. And you have to keep buying 
all this stuff for what is allegedly an investment.
    Now the problem is that when you view the home as an 
investment vehicle rather than essentially a form of durable 
consumption which depreciates, it creates an incentive to lock 
other people out. Essentially it says, well, my home is an 
investment, so I am going to make sure that my school district 
remains the type of people that people who will buy my home 
want their kids to go to school with. My home is an investment, 
so I am going to make sure that not too many other homes get 
built so that if somebody wants to live here they have to buy 
my home.
    So I understand that many Americans have bought into the 
story that the roof over their head is also their retirement, 
but I would suggest that, first of all, this has not always 
historically been the case. Typically your security in 
retirement was that you had children who would take care of 
you.
    And secondly, that this investment, this idea that the home 
needs to appreciate forever, it creates a toxic politic of 
exclusion at the neighborhood level. That ultimately the only 
path forward is for a very large number of neighborhoods in 
America to realize that they are going to increase in quantity 
of houses, not in price of houses.
    So home ownership may be very important for the benefits it 
provides to a family in terms of security, but I think 
Americans expecting that real estate, particularly personally 
held real estate, will be their retirement security are going 
to be in for a nasty shock.
    Representative Heck. Are you suggesting that they are 
mutually exclusive?
    Mr. Stone. There are times and places where real estate 
will appreciate and it will not have a negative impact on 
anyone else and it is not a result of exclusion, but there is 
an abundant amount of research at this point that suggests that 
most of the really hot real estate markets in America are that 
way not just because people decided that neighborhood was 
amazing, but because a new supply is being kept off the market 
generally by local regulatory choices.
    Representative Heck. But in a market where demand 
significantly exceeds supply----
    Mr. Stone. Create new supply.
    Representative Heck. It would be hard for me to exaggerate 
how strongly I agree with you, Mr. Stone. It is a supply issue, 
principally. It's not a demand issue. We are over 7 million 
housing units short in this country, and it creates all sorts 
of problems to families, many of which have been set forth 
here.
    Mr. LaHood.
    Representative LaHood. Well I want to thank the panelists 
for being here today, for your testimony, and having this 
conversation, and thank the Committee for having this hearing 
today.
    Maybe a question to all of the witnesses here. Arguably we 
live in one of the most prosperous times in our modern history 
in terms of economically and where we are at, looking at all 
the measurements. And yet many people claim that having 
children is too expensive. Can any of you talk a little bit 
about what is going on there, and maybe some of the reasons for 
that? Or if there is some validity to that?
    Yes, Mr. Bourne.
    Mr. Bourne. Well I think we have to split this issue into 
thinking about how people exist with the costs that they face 
today, and changed expectations over time.
    I agree with much of what Mr. Stone said earlier, in that 
if you look at the broad trends of costs of everyday basic 
goods and necessities over time, and bundle up that basket of 
goods, actually the affordability of raising a family on fixed 
expectations about what you want to get, or what you want to 
provide for your children, in most areas and for most families 
has not gone up.
    But over time, people's expectations rise about what they 
want to deliver for their children. You want to invest in 
after-school clubs and activities. You want to provide them 
with the best quality child care available for you. So the 
amount that is actually spent by many families on children has 
risen.
    That is not to say that policy does not play a role in 
raising prices from what prices could be in a more market-
friendly economy. And much of my research has been attempting 
to show that in key markets that occupy large segments of 
families' budgets, particularly child care and housing costs, 
there are big regulatory barriers which restrict supply of new 
goods such that when demand rises for child care, or demand 
rises for housing, there is not an adequate supply response.
    That manifests itself, as Mr. Stone said, in the housing 
market mainly through local zoning and land use planning laws 
which are particularly pernicious in many growing metropolitan 
areas. But in child care it also manifests itself through 
staffing regulations and occupational licensing, which many 
parents in upper income quartiles desire that type of improved 
quality from child care, more interaction between staff and 
children, and better qualified staff. But when that imposes a 
policy across the State level, that has the effect of raising 
child care prices and forcing many poorer families out of the 
formal child care sector and into the informal child care 
sector where we have less idea of what quality is.
    So I guess to summarize that point, I agree with Mr. Stone 
that over the long term if you wanted exactly the same 
expectations for your kids as 30 years ago, things have 
probably got more affordable. Our expectations change, and that 
means that over time people are spending more money on their 
families. And there are certain policies, particularly at the 
State and local level, which raise prices in those sectors.
    Representative LaHood. And is there a suggested policy 
change to help remedy that?
    Mr. Bourne. Well the main point that I made in my 
testimony, the two big-ticket items, are housing and child care 
for many families with young children. And most of the positive 
regulatory changes that could be made would primarily have to 
occur at the State and local level.
    Now Federal Government policy can push in the right 
direction. I may not agree with all of the current Federal 
subsidy programs and their existence, but to the extent that we 
are going to have them, greater conditionality, making sure 
that we are not rewarding bad policy by distributing subsidies 
to areas that have very restricted supply sides in child care 
and housing I think is something that Congressmen and women 
should be looking at.
    Representative LaHood. Thank you.
    Mr. Stone, do you have any comment on that?
    Mr. Stone. I agree.
    Representative LaHood. Okay. Doctor, I know you only have 
30 seconds here, but do you want to comment?
    Dr. Waldfogel. Yeah, just I would, you know, from the 
historical perspective I think we have to just remember the sea 
change that we have seen in American families, from the stay-
at-home caregiver, single breadwinner model, to the dual 
breadwinner model, or the single-parent model. And so now most 
children are growing up with all of their parents in the labor 
force. And we just have not come to terms with that in terms of 
what that means, in terms of the need for paid leave, and the 
need for support for child care. Child care, even if it were 
less regulated, is expensive and we really have not come to 
terms with that.
    Representative LaHood. Thank you.
    Chairman Lee. Mr. Trone.
    Representative Trone. Thank you, Mr. Chairman.
    Dr. Waldfogel, in 2016 Maryland ranked fifth in the country 
in terms of most expensive child care. It costs an average of 
$14,000. In closer to D.C., it can cost $37,000.
    The Maryland General Assembly is working to expand pre-K, 
but it is still not universal and will not be in the 
foreseeable future.
    Could you speak to the benefits for families' experience 
from having universal pre-K, and also the positive impact on 
even the higher income families?
    Dr. Waldfogel. We now have a lot of research about 
universal pre-K and the benefits that it offers for all 
children. So the benefits are largest for the low-income 
children, children with the least-educated parents, because it 
helps them catch up, but it is beneficial for all kids. And it 
also is a very important form of child care for that year 
before school.
    But as you are indicating, universal pre-K will only cover 
the year before children start school, or in some states they 
are extending it down to a second year, and it still leaves 
infant and toddler years--which are the most expensive--
uncovered.
    The Federal Government has a child care subsidy program for 
low-income families, but it is only funded at a level of 
support that will cover subsidies for 15 percent of the low-
income families who are eligible. So basically it is a lottery. 
If you are a low-income family, there is a lottery. And if you 
are lucky, you hold the winning ticket, you get a child care 
subsidy. But if not, you are out of luck. And that is just 
unconscionable.
    Representative Trone. The number I have heard, as far as 
return on investments, is 4 to 1. Do you think that is 
reasonable?
    Dr. Waldfogel. It is at least 4 to 1. With child care, it 
is all about the quality. So the best quality programs, it is 
as high as 8 or 9 to 1. The lower-quality programs, it is less 
than that.
    So that is why we need to be careful about, you know, 
proposals to cut the quality, and cut the regulations, because 
there are two sides to that. There is the reduced cost, but 
then there is also the reduced benefits, or even the risks of 
putting children in substandard child care.
    Representative Trone. Right. Ms. Rowe-Finkbeiner, when we 
talk about the lack of affordable child care, I want to talk 
about the populations that are more effective than others, and 
also you do not mind speaking to--I am a co-sponsor of the 
Child Care for Working Families Act, which will create some 
high-quality child care options all year around. What are some 
of the proposals we should push forward that are those most 
needed?
    Ms. Rowe-Finkbeiner. Thank you. Well first of all, thank 
you for being a co-sponsor of the Child Care for Working 
Families Act. It is an Act that the members of MomsRising, over 
a million of them, strongly support, as well.
    As you have heard today, we hear from our members about 
three key areas of crisis in child care. There is 
affordability, which we are hearing a lot about right now. 
There is accessibility, which 50 percent of parents are living 
right now in a child care desert, so no matter how much money 
they had they could not find child care. And then there is also 
excellence.
    So we really need, as Dr. Waldfogel said, high-quality 
early learning programs to make sure that every child has the 
opportunity to thrive. And that is where we see our strongest 
return on investment.
    Importantly, we need to make investments in child care and 
early learning starting from zero to age five, until they get 
into kindergarten. So what we are seeing right here is 
incredible gaps in coverage.
    We need to start with access to paid family medical leave. 
Then we need to move into subsidized child care that is real 
subsidized child care, that also has a career and wage ladder 
for child care workers who are among the lowest paid workers in 
our Nation. And in fact the Child Care for Working Families Act 
includes components that relate to all of those.
    And then we need to have universal pre-K. So we need to 
have a whole system that includes the education of our 
children. Because here is one thing that is important: Parents 
need safe, enriching places for their children to be so that 
they can work as parents have been increasingly in the labor 
force. Children need safe, enriching places to be so they can 
thrive in the future and be our future leaders. And child care 
workers need fair pay.
    Just one point that people were talking about a moment ago 
was about we have had increased productivity in the United 
States of America: While productivity has gone up 70 percent in 
the past 30 years, actual wages have remained quite stagnant in 
the last couple of decades.
    Representative Trone. Where do you see the kids, four years 
or in pre-K, where do you see the twos and threes? What 
combination of public-private? What does that look like?
    Ms. Rowe-Finkbeiner. Oh, that is an excellent question. 
Right now we have a patchwork approach. We do not have a smooth 
line through child care. And what we need to do is we need to 
make sure policies like the Child Care for Working Families Act 
passed. We need to look at restructuring our Tax Code. And we 
need to advance policies that allow parents to be in the labor 
force and make fair wages, no matter where they work.
    Chairman Lee. Mr. Beyer.
    Representative Beyer. Thank you, Mr. Chairman. And thank 
all of you very much for coming. I am sorry we have been in and 
out with these vote things we have to do.
    I want to push back first on Mr. Bourne on the over-
regulation of child health care. I know it is expensive, but I 
am from Virginia, and I promise you every regulation we have 
there was the result of some tragedy.
    I have been part of this for 25 years. Whether it is the 
quality of the people that we are hiring that were not given 
criminal background checks, or the quality of the facility, or 
every time some child dies we end up trying to find a way to 
put the regulations in place to make it safe for all of our 
kids.
    I also--you know, a subset of this is pushing back against 
women in the workforce, which has caused all these problems, 
and yet one of the things this Committee pushes so hard for is 
the growth in GDP. And I think the post-World War II economic 
miracle has only been possible because of the women in the 
workforce.
    In fact, this Committee in the last couple of years has 
pushed back a bunch on the fact that women are, as a relatively 
smaller percentage in the workforce than they were 10 years 
ago, 20 years ago, 30 years ago, which is one of the things 
that slowed down our economic growth.
    So, to Dr. Waldfogel, one of the great points of contention 
is the net effect of the Tax Cuts and Jobs Act. Do you see that 
it paid nearly enough attention to our lower income folks, the 
ones that are not getting married because they cannot afford 
to?
    Dr. Waldfogel. I mean we were talking earlier about the 
expansion of the Child Tax Credit that was contained in that 
bill, and that certainly was very important for low-income 
families. So I think that was a huge plus in that bill. But are 
you speaking of other specific provisions?
    Representative Beyer. And thank you for pointing out again 
and again that, and the Earned Income Tax Credit. One of the 
things we are trying to push through the House right now is the 
significant increase in the Earned Income Tax Credit, 
especially for childless individuals.
    Dr. Waldfogel. Yes, it is very important. Childless 
individuals are young people who are the parents of tomorrow, 
that are about to become parents. It turns out that young 
adults are the poorest age group now in America. Who knew? I 
would have always thought young children are the poorest age 
group, but it is young adults 18 to 24 who are now our poorest 
age group. And that is the kind of group that could benefit 
from an extension of Childless EITC. And of course noncustodial 
fathers are another group. And we have been talking quite a bit 
today about the importance of father involvement, and how we 
want to be sure that they are involved.
    So, yeah, we want to be even-handed in our policies and be 
supporting both moms and dads, and also supporting young people 
who are on their pathway to starting families.
    Representative Beyer. Ms. Rowe-Finkbeiner, Mr. Stone talked 
and wrote very well about the marriage penalty that so many of 
our Federal programs hurt you, or move in the wrong direction 
when you get married.
    From a MomsRising perspective, have you guys thought much 
about how you would overcome the various marriage penalty 
processes in our programs, beginning with the Tax Code?
    Ms. Rowe-Finkbeiner. One thing that we hear from our 
members again and again is that people should be able to 
determine who is their family, and how they are raising their 
children.
    We heard earlier today about grandparents who are involved 
also in families, and about the sandwich generation. And so the 
important thing to do is look at the reality of families today 
and make sure that we are supporting all families equitably and 
equally. That means in the Tax Code. That means in our public 
policies. And that means updating our outdated public policies 
to match our modern labor force and not ignore the facts that 
women are in the labor force to stay; and that companies that 
employ us actually have higher returns coming in. (So say 
studies like a 20-year study at Pepperdine University of what 
happens when you have more women in leadership.)
    And so we want to make sure that everybody has a chance to 
thrive, and we are in it for the long haul to make sure that 
happens.
    Representative Beyer. Very good. And, Mr. Stone, to toss 
that same question back to you on the marriage penalties, have 
you put together your comprehensive legislative piece for 
Senator Lee and for us to fix that?
    Mr. Stone. Pieces of it are actually in the works, but 
there is an interesting case where we just heard a very large 
marriage penalty advanced, very well-intentioned. We know the 
EITC discriminates against childless people, right? It does. It 
does not give them as equal of a benefit.
    But in the example tax filers that I provided in my written 
testimony, if both of those individual people were getting the 
full EITC that they would be eligible for, if a childless 
partner was as well, the marriage penalty would be even larger. 
It would be another $5,000 that would be lost when they got 
married.
    So if we even things out for childless people without 
fixing the basic anti-marriage position that is written into 
the EITC, we have made the problem even worse. And this is this 
issue where we make policy for people as they are today, but 
human lives are not static. They develop. The person who is 
single today is married tomorrow. The childless person today 
has children tomorrow. People's life situation changes.
    And when we do not think about that, we end up creating 
barriers to the life that they themselves want. So I want 
childless people to be treated equally, which is why I 
mentioned it would be better if we just did it all through a 
flat wage subsidy that did not refer to family status at all.
    But if we are going to have this done when you file your 
taxes, I do not want it to be a situation where both the 
childless and the custodial parent get a benefit as long as 
they stay separate. That is not a recipe for supporting 
Americans of any family status.
    Representative Beyer. Thank you very much. It sounds like 
you and Andrew Yang have been talking.
    Senator, I yield back.
    Mr. Stone. He has interesting ideas.
    Chairman Lee. Senator Hassan.
    Senator Hassan. Thank you, Mr. Chairman. And thank you for 
holding this hearing. Thank you to all of our witnesses for 
being here.
    I had a question to Dr. Waldfogel to follow up. I 
understand there has been considerable discussion already about 
paid family leave, but I wanted to follow up on one aspect.
    I, too, will just add my voice to the chorus that families 
should not have to make the impossible choice between earning a 
paycheck and spending time with a loved one who is in need, or 
taking care of their own personal health care crisis. And it 
has been great to see eight states and Washington, D.C., enact 
paid family and medical leave to try to address this issue.
    And as I think has been discussed, we all know these 
programs provide partial wage replacement to workers who need 
to care for a newborn or a newly adopted child, provide care 
for a family member in need, or address their own health care 
crisis.
    I know there has been discussion here today about the 
benefits of paid family leave to the family members, but could 
you address a little bit the benefits for employers? What have 
we learned about how that really, what the ripple effect is in 
the workplace?
    Dr. Waldfogel. Thank you for the question. It is a really 
important one. We tend to stress the benefits for employees, 
and we do not talk enough about employers.
    Employers are in a tough position. They are looking for 
employees in a tight labor market, and so what really is 
valuable for them is having talent and retaining it. And what 
is costly for them is losing that talent.
    So when we talk with employers--and we have been surveying 
employers in states that have these laws--what they say is, 
even the small employers, is we give people leave anyway. We 
have to give them leave. Somebody is ill herself, her husband 
has cancer, her mother falls and breaks her hip, she has a new 
baby, we have to give the employee time off work. With these 
laws, we are able to see that they get paid, and we do not have 
to pay them ourselves off of our payroll. So they are getting 
paid through these public social insurance funds.
    And what we have also heard from employers is that in the 
vast majority of the times, about 85 percent of the time, they 
are covering the work by assigning it to other employees, or 
waiting for the person to come back. So it is very rare to hire 
a replacement worker. Only about 15 percent of the time. And 
only about 15 percent of employers say I had trouble covering 
the work while the person was out.
    So it is not surprising that we are hearing that two-thirds 
of our employers that we are speaking to--and this includes 
small employers--are supportive of these laws. And I have to 
say, when we started the survey I was really nervous what we 
were going to find, and it is maybe 10, 15 percent are opposed. 
And I suppose 10 or 15 percent of employers would oppose pretty 
much any law, so the fact that we are finding about 85 percent 
or 90 who are either supportive or neutral I think is pretty 
impressive.
    Senator Hassan. Well thank you for that. And I think it is 
pretty impressive, too. It is also similar to what I have begun 
hearing. New Hampshire is a very small business State, and it 
is what I have been hearing as well.
    The other thing I wanted to touch on with both you, Doctor, 
and Ms. Rowe-Finkbeiner, is the issue of businesses needing 
more skilled workers. Because, again, that is probably the 
number one thing I hear from businesses across New Hampshire.
    What we also hear is that too often individuals who are 
under-employed, or who have fallen out of the labor market 
entirely, are not able to get the training they need for the 
jobs that are open, but also that they face barriers such as 
transportation and child care. So either to get that training, 
they're having trouble finding child care, or transportation to 
it.
    So I have introduced something called--and it is a 
bipartisan bill--called The Gateway To Careers Act, which would 
strengthen career pathway opportunities and help individuals 
navigate barriers that keep too many people from participating 
or staying in the workforce.
    Through your work and advocacy, do you think we should be 
doing more to help families access the services they may 
already be eligible for, and strengthen career training 
programs to be responsive to issues that individuals face 
outside the workplace?
    Dr. Waldfogel. I mean I will just briefly say the work that 
I have done on how families spend their EITC suggests to me 
that families are really facing very high transportation and 
child care costs. So I think we have always thought that the 
EITC would be used for durable goods, or be used for furniture 
for the family, or maybe getting into a better apartment, 
addressing the housing situation. Unfortunately, families seem 
to be using it to pay back bills, or to be paying for work 
expenses, primarily transportation and child care. So, yes, 
anything you can do on that front I think would be fabulous.
    Senator Hassan. Thank you. And Ms. Rowe-Finkbeiner.
    Ms. Rowe-Finkbeiner. I agree. Thank you for putting forward 
that bill. We really see three things that need to happen.
    We need better, fairer wages. We need to update our 
outdated policies. And those policies need to be comprehensive.
    So when we are talking about things like paid family 
medical leave, we need it to mirror the FMLA, which is unpaid, 
in terms of not only covering new parents but also covering 
people's own significant serious illness and the significant 
serious illness of a close family member. In fact, that is the 
majority of the time that the unpaid FMLA is used.
    So we want to make sure that coverage is happening in paid 
family medical leave too. And as we update these outdated 
policies, we do not want to rob one program to pay another 
program. Families are already stretched. One thing that has not 
come up in this hearing so far is wealth inequality. And I 
mentioned a little bit earlier that we have had 70 percent 
increase in productivity, but really over the last 30 years 
wages have remained stagnant.
    That is putting us in a situation that an MIT economist has 
said is leading us toward a third world economic model, which 
is going to implode the middle class.
    So we need to make sure that we have comprehensive 
policies. And we also--to your point and to your bill--need to 
make basic necessities, including transportation, more 
affordable for families.
    We do not have a single one-solution for what is happening 
in the United States of America right now, but we know that 
America is in crisis. We know that families want to do what is 
best for their children--all families--and I am so thankful 
that you here today are looking at the solutions from multiple 
angles as well.
    Senator Hassan. Thank you. And thank you, Mr. Chairman, for 
letting us go over.
    Chairman Lee. Happy to do it. We are always happy to 
accommodate those of our Members who show up, especially during 
a busy day like this one when we have votes. So I am grateful 
to have had the participation, bipartisan participation, from 
both ends of the Capitol.
    We are going to do a second round, for any who are 
interested in it, and we still start that now.
    Mr. Bourne, I want to start this round with you. In your 
testimony you explain that some child care regulations, some 
regulations in place that affect the child care industry, tend 
to reduce the supply of child care centers, especially in poor 
areas, driving up prices and reducing the rate of formal care 
options for families.
    For example, a new law in Washington, D.C., will, when it 
becomes fully implemented over the next few years, start to 
require child care providers to earn degrees. In some cases, a 
two-year post-secondary degree, in some cases a four-year 
college degree. In other cases, it might be a certification. 
This of course will inevitably have an impact on supply, which 
ends up having an impact on price. And expensive market-based 
child care appears to be a pretty widely recognized financial 
burden for working families.
    As I alluded to earlier, in a New York Times survey 64 
percent of those respondents who said they expected to have 
fewer children said that they expected to have fewer children 
than they considered ideal, at least in part because they 
believed that child care was too expensive.
    To what extent do you think child care regulations are 
responsible for higher child care costs?
    Mr. Bourne. It's difficult to disentangle the demand and 
supply factors here. So there are good reasons to think that 
child care, even in a market economy, might become more 
expensive over time as people get richer.
    Formal child care is very labor intensive. It is difficult 
to automate in the same way that you can automate in the 
manufacturing sector. And for the big structural reasons that 
Dr. Waldfogel has talked about, there has been a big increase 
in demand for formal child care over time. And of course people 
tend to value their kids pretty highly, so they want a safe, 
loving environment for them. And for many, particularly upper 
income families, they want very, very high quality child care.
    If you look across states, areas with the highest cost of 
child care also tend to be some of the richest states, which 
kind of feeds into this idea that prices are strongly income 
elastic.
    Yet, there is a lot of economic evidence, as I suggested, 
that regulations of child care workers--in particular, the 
number of staff required per number of children, and also 
occupational licensing requirements as you alluded to in terms 
of qualification requirements--do raise costs pretty 
substantially.
    There has been some academic work that suggests if you 
relaxed across all age groups that staff-to-child ratio by just 
one child, it would reduce child care prices by about 10 
percent. But actually these regulations are particularly 
regressive. The best study on this has been done by two 
economists, Joseph Hotz and Mao Xian. And what they did, they 
looked at comprehensive data and ran this econometrically, and 
what they found was staff-to-child ratio regulation in 
particular had no effect in improving quality. What it did do, 
by driving up the cost of care, was in poorer areas it led to 
closure of formal centers. And that lack of availability of 
formal centers led to much greater use of home day care.
    So there is a massive tradeoff here, which is measures that 
people say improve quality may well improve interaction time in 
the formal centers that still exist within a State, but if that 
means that many poorer families are unable to access formal 
child care we really have no idea what happens in terms of the 
quality of the informal care that those people are offered.
    So I would say there is a big tradeoff. Lots of upper 
income parents want and desire these sorts of regulations 
anyway, but what these regulations do is strip away the choice 
for lower income families to select a different price 
regulation, price quality bundle. And that can have severely 
regressive effects in terms of access for those people to the 
labor market.
    Chairman Lee. Other than child care reforms, what are your 
other favorite policy reforms that you think could 
significantly lower the cost of living for low-income families?
    Mr. Bourne. Well the biggest expenditure is evidently 
housing costs. And I have outlined I think a key driver of 
housing costs in many major cities, particularly where economic 
opportunities are greatest, tend to be associated with overly 
restrictive zoning and land use planning laws.
    I do not think that we can really get to the nub of this 
affordability issue without tackling that problem. Now 
evidently that is primarily a State and local issue, but that 
said, the Federal Government through schemes such as the 
Community Development Block Grants does dish out Federal 
subsidies to states and localities. And to the extent that 
those come without conditions about the supply environment, 
they can subsidize bad policy. So I know HUD has been looking 
at this, trying to work out a way of making sure that states 
and localities have plans to liberalize their planning laws. I 
think that is a positive step forward.
    And I also think with this rise of rent control as a 
potential solution being advocated, I would like to see Federal 
policy come with conditions that preclude those sorts of 
policies which would damage supply further.
    Chairman Lee. Alright. After a while, I guess one does have 
to be careful about how far to intrude. I mean, you create one 
set of problems through the Federal Government, there is a 
response locally, and then we try to treat that remedy with yet 
another Federal remedy.
    My time for this round has expired. Mr. Heck, you are up to 
bat next.
    Representative Heck. Thank you, Mr. Chairman.
    Ms. Rowe-Finkbeiner, thank you very much for getting to the 
nubbins. Better wages, especially in light of the context of 30 
years of stagnant wages. Because it seems to be underlying. It 
is foundational to all of these issues that we are dealing 
with.
    For purposes of discussion, I am thinking about kind of 
three different buckets in which the Federal Government could 
take action to affect people's standard of living. And I am 
going to ask you each what is the thing that you think that we 
ought to do--the thing, if it were but one thing.
    But first, as a predicate, let me describe this. We can 
either through the appropriation or the tax expenditure side 
impact those things that are really pinching people--
skyrocketing costs associated with higher ed, housing, health 
care, child care, or just cash in the pocket, through lower 
taxes or EITC and the like. Bucket one.
    Bucket two, we can adopt those policies which lead to 
higher wages for at least some. Increase the minimum wage. At 
the Federal level, it has not been increased in 10 years, 
nowhere near the purchasing power then. More robust collective 
bargaining laws to favor the rights of workers. That is bucket 
two.
    Bucket three is the broader issue of just overall wages. In 
the spirit of disclosure, this is my favorite, I believe that 
the Federal Reserve has pursued a policy which has suppressed 
wage growth. In fact, in the last 10 years I believe there have 
only been two, count them, two months in which our labor supply 
increased by less than the replacement number in that month. 
Two months, in ten years.
    So we really have not had an approach to the cost of money, 
which truly gets us to full employment. Indeed, they keep 
changing their definition of what ``full employment'' is. They 
keep lowering it. And as a consequence, we have had very slow 
wage growth.
    So I am also reminded that what one of the chairs of the 
Federal Reserve once said, that is my favorite observation in 
this regard, which is: Recoveries don't usually die of natural 
causes, they are murdered by the Fed.
    So we have these three buckets. And I am interested in 
knowing from each of you, quickly, beginning with you, Kristin, 
if I may. By the way, as an organization with a million members 
headquartered in my home State, let me just say we are all so 
proud of the work you do. Thank you.
    But if we were to do one thing--I want to go right down the 
line--one thing to make a difference, what would it be? Ms. 
Rowe-Finkbeiner.
    Ms. Rowe-Finkbeiner. That is a tough question.
    Representative Heck. I know. We get asked tough questions. 
We have to answer tough questions all the time. I am sharing 
the pain.
    [Laughter.]
    Ms. Rowe-Finkbeiner. Thank you for sharing the pain. I 
would actually do all three. And that is because I know that we 
can do more than one thing at a time. I believe we can do it.
    What I know is that what we should not do is cut quality 
because we think that will cut costs. Because, I just want to 
make sure that we look at the fact that the return on 
investment on all of these programs goes up when we have 
increased quality. We were talking about this a moment ago 
relating to early learning and child care and in that 
discussion we should always be looking at the ROI going up as 
you have increased quality.
    So we really need to get into making sure that we are not 
cutting quality, we are not cutting care, and that we are 
moving forward wages.
    So if I had to pick one, you know, I am all three. I am 
going to see how Dr. Waldfogel handles this one.
    Dr. Waldfogel. So of course I am going to say all three, as 
well, because we should have full employment. We should have 
higher minimum wages and more stronger bargaining rights. And 
we should have a stronger--but I am going to pick one thing.
    Representative Heck. Not if you could choose one. How about 
which one do you think would make the biggest difference?
    Dr. Waldfogel. Well, I am actually going to come back to 
the universal child allowance, because I am going to say with 
these forces sweeping our economy, children should not be 
suffering because of this. So we have not even talked about the 
instabilities in the economy and the unstable jobs, people 
whose work hours change from week to week, which means their 
earnings change from week to week. How do you pay for housing? 
How do you pay for child care when your earnings are changing 
from week to week?
    So what are you doing as a parent? What you are doing as a 
parent is you are worrying about money all the time. So what 
impact is that having on your family life, and on your 
children?
    So I think children ought to be protected from these kinds 
of forces that are swirling around in our economy while we try 
to sort this all out. And so I think the Child Tax Credit is a 
fabulous program in moving towards that goal, and I just think 
anything you can do to expand it to make it reach more families 
and become more universal, I think that is what we ought to be 
doing when we are thinking about helping families with kids and 
helping people making it more affordable to raise a family.
    Representative Heck. Thank you.
    Mr. Bourne----
    Dr. Waldfogel. But I'm glad you are tackling the big 
challenges.
    Mr. Bourne. Well I am going to be more controversial and 
reject the premise of your question, which I think there is 
actually a fourth approach, which is to look at why are the 
costs of certain necessity goods and services so expensive at 
the first place and try and expand the supply side in those 
areas to make goods inherently cheaper so negating the demand 
for more in the way of Federal borrowing, subsidies, and price 
and wage controls.
    And I think a lot of the programs that we have mentioned no 
doubt could alleviate poverty. But given the fiscal conditions 
that you guys find yourselves in, given the limits of what you 
can achieve through a tight labor market, and given the risks 
associated with wage and price controls, I think the principle 
of first do no harm, examine what policies on the books that 
currently raise the cost of living for families and poor 
families in particular, I think that is a much better and 
fruitful approach.
    Representative Heck. Fair enough. Thank you, Mr. Bourne.
    Mr. Stone. So I am going to take the question in the spirit 
it was given and propose one legislative fix. However, in the 
spirit of Congress it will be a legislative fix with some 
riders attached.
    So we should take the EITC. We should repeal it. We should 
replace it with a wage subsidy that does not discriminate based 
on family structure. The EITC currently has a baked-in benefit 
for children. We do not want to lose that. So we should roll 
that into the Tax Credit, which we should then expand.
    And because we have to have a pay-for, we should pay for it 
with nominal GDP targeting at the Fed, which will increase 
economic growth. There you go.
    Representative Heck. Thank you. Thank you for your 
indulgence, Mr. Chairman.
    Chairman Lee. Any time. Any time. I wanted to follow up on 
a couple of additional questions.
    Mr. Stone, in your testimony you submitted to the Committee 
you state that the declining marriage rate accounts for at 
least half of the increase in the fertility gap over the last 
decade. And for basically all of the increase since 2000. Is 
that right?
    Mr. Stone. That is correct.
    Chairman Lee. Can you explain to us why it is you believe 
marriage rates are declining? And what, if anything, can be 
done--I would hesitate to find the right words here--I do not 
necessarily want to live in a country where we have got a 
brooding omnipresence of a nanny state that is going to 
incentivize people to get married, tell them when it is time to 
get married. But I also do not want to live in a country where 
the government is disincentivizing people, or the government is 
artificially creating an environment in which people do not 
want to get married.
    Any thoughts on what we might be doing there?
    Mr. Stone. So this idea of the fertility gap, it is rising. 
And it is not because people are wanting more and more kids. 
The amount of kids they want is about stable. And fertility is 
falling. But when we look at how fertility is falling--and by 
``fertility,'' I just mean birth rates--in fact for a women who 
gets married at a given age, her odds of having children and 
how many she ends up having are pretty similar to what they 
were 30 years ago.
    So this is almost entirely actually just about marriage 
choices. And of course marriage is being postponed. And for 
working class people, it is happening less frequently at all. 
People with a higher degree still get married at about the same 
rate they always did.
    This has been presented in the past as a class problem; 
that this is, oh, there is some cultural shift happening in 
these different groups of people. Maybe. Maybe. But it could 
also be that people without a college degree are far more 
likely to be exposed to extensive marriage penalties. Their 
incomes tend to be in the range impacted by that. Which then 
brings us to this worry about this nanny state, or maybe more 
like a grandma state lecturing you about getting married----
    Chairman Lee. A ``grandma state.'' That is the new term to 
come out.
    Mr. Stone. There you go. So nobody wants this, right? 
Nobody is saying I wish, I wish that the IRS would give me some 
advice about whether to marry my girlfriend, right? Nobody 
wants this.
    Luckily, this is not what we need. If the problem is the 
marriage penalty--and I think it is--then what we really need 
is we need, probably the first step is the most popular thing 
in Congress, to create a commission of some kind to study where 
are there marriage penalties? Can we identify exactly where 
these things occur? And once we have identified them, can we 
come up with some agreeable way to probably in an essentially 
spending-neutral fashion, essentially rewrite the eligibility 
and benefit rules so that we are still spending the same amount 
of money on essentially the same income range of people, but we 
are doing it in a way that does not discourage family 
formation.
    This is not lecturing anybody getting married. It is not 
pressuring anyone to do anything they do not want to do. It is 
just saying we made a mistake in how we wrote some of these 
programs in the past. They were not designed for a modern world 
where men and women are probably both working. And so when the 
eligibility threshold does not double, you have a serious 
problem.
    After we have done that kind of a study, I think we really 
need a rule. That is, whenever we score a bill, we really need 
that scoring process to include does this, as a little check 
box, does this create a marriage penalty? Yea, nay. And if it 
does, it would be nice to know.
    It is not a hard thing to calculate. So just having a bit 
of forward guidance on this as we go forward, when we have a 
new bill that affects individuals' benefits or taxes, it should 
be scored: Does it create a marriage penalty?
    Chairman Lee. When you explain it that way, it becomes 
easier to understand how that could happen. Because it may be 
that in nominal terms the size of the penalty might seem 
smaller with regard to some of those would-be couples than it 
is elsewhere in the economy.
    But in relative terms when you think about what that does 
to the marginal bottom line of families right in this sweet 
spot where it really makes a difference, that can have a big 
impact on behavior.
    Dr. Waldfogel, I wanted to follow up on something. You co-
authored a 2016 study in which you show that the motherhood 
wage gap has declined, and that even in some cases it has been 
replaced with something of a wage premium for some groups of 
moms. Am I stating that correctly?
    In light of that, can you sort of discuss that finding and 
then tell us, is it fair to conclude that the affordability 
crisis is necessarily driven by a motherhood wage gap? Or does 
that indicate there could be other factors at play here?
    Dr. Waldfogel. Yeah, I have been working on the motherhood 
wage gap for a long time. It was part of my Ph.D. at the 
Kennedy School more than 25 years ago----
    Chairman Lee. When you were 12.
    Dr. Waldfogel. Yeah, when I was 12, thank you very much.
    Chairman Lee. A child prodigy.
    Dr. Waldfogel. Thank you. I appreciate that. And what I 
learned in doing that work was women who did not have the 
opportunity to take a paid job-protected maternity leave often 
then were faced with an impossible choice. They would have a 
child. They faced an impossible choice. They did not have 
enough time off to stay home as long as they needed to with 
their baby. And so they would leave their job and they would 
come back a few years later, and they would start at the bottom 
of the labor market.
    And it took 10 or 15 years to get back on a par with the 
women who had not had children and were in similar jobs with 
similar training. So that is that motherhood wage penalty, and 
it lasts for a long time.
    Well fortunately we live in a world now where, although we 
still do not have paid family leave and child care in all 
employer settings, we have it in a lot more than we used to 
back in those days when I was doing that research.
    So it does not surprise me that the motherhood wage penalty 
has narrowed over time. We still have a problem in terms of 
women's earnings, but not as bad as it used to be.
    Of course, you know, at the same time other things have 
happened in the labor market and in the education system. Women 
now are getting more education than men. So if there is 
actually a group that we are worried about in the labor market, 
you know, as you know, it is the less educated men who really 
are taking a hit.
    So, yes, things have changed over time.
    Chairman Lee. That is helpful. Yes, you had something you 
wanted to add?
    Ms. Rowe-Finkbeiner. Yes, I just wanted to follow up on 
what Dr. Waldfogel said. And that is, the mom wage gap is not 
gone. So when we are talking about the wage gap being lower, 
the 2018 numbers that were built on U.S. Census data are that 
moms are making 71 cents to a dad's $1. Women overall are 
making 80 cents to a man's $1, women of all races, for full-
time year-around work.
    So the motherhood penalty, the motherhood gap, is still 
very significant and very, very strong. And so when we are 
looking at what is happening with solutions in our country, we 
need to address the fact that it is not just married or 
unmarried, or type of family that you are living in that is 
impacting the affordability of raising a family in America. It 
is also wage discrimination. And that wage discrimination is 
compounded by structural racism. So moms of color are actually 
experiencing the most wage discrimination. And single moms 
actually experience compounded wage discrimination too.
    According to 2018 data, single moms are earning 55 cents to 
every dollar earned by fathers. So when we are looking at 
solutions, we need to absolutely look at pay parity solutions--
things like the Paycheck Fairness Act.
    We need to look at how to raise the economic security of 
all families. We need to look at the fact that according to 
Johns Hopkins University 57 percent of births last year to the 
millennial population were to unmarried women. And we need to 
acknowledge that 82 percent of women in America do have 
children by the time they are 44 years old.
    So these solutions, if we just focus on narrow solutions, 
are not going to work for the majority of families. We need to 
make sure that the solutions that we create, we create for all 
of working America, not just some. And that we do not replicate 
the structural inequities of the past.
    Chairman Lee. Did you have your hand up? Were you wanting 
to respond to that? Go ahead.
    Mr. Stone. I think it is worth emphasizing this motherhood 
pay penalty is not gone. It is very real. There is extensive 
research on this with really rigorous data from Sweden, 
Denmark, Germany, Austria, the U.K., the U.S., and it shows 
that in all of these countries there is an enormous motherhood 
penalty. In fact, it has almost no correlation with public 
benefits for child-bearing or motherhood. It is almost entirely 
driven by local social norms, which suggest discrimination may 
very well be part of it, but also suggests that our policies 
that we want to advance for families, we should justify them in 
terms of what we believe is right for families, is good for 
families. We should not convince ourselves that by giving paid 
leave we are going to eliminate--which I think we should give 
paid leave--but we should not convince ourselves that we are 
going to eliminate a pay gap that exists even in countries that 
have programs far more generous than anything that we are 
talking about.
    These differentials are much harder to correct than what we 
convince ourselves of in political discussions. So they may be 
worth doing. They may be worth doing because they are good for 
kids. They may be worth doing because they are a good 
communication about what we value in parents. They do not 
actually address the pay gap. That is a problem that actually 
almost no country has found a solution to.
    So we should keep in mind what is possible to achieve and 
make sure that we do not make promises that are going to end up 
being lies to people that we are trying to help.
    Chairman Lee. Dr. Waldfogel.
    Dr. Waldfogel. I just wanted to come back to the marriage 
question, because I think it is a really important one. I just 
wanted to say that my colleague, Kathy Edin, who is at 
Princeton now, has done really the best research about why it 
is that low-income families are postponing marriage. And she 
tells a very compelling story about families, young men and 
women, feeling like they need to attain certain footholds 
before they can get married. They have to, you know, have 
completed their education. They have to have a decent job. They 
cannot get married until they actually are stable on their 
feet.
    And so I have been thinking about the conversation we have 
been having this afternoon about high housing costs, and young 
people living upstairs in the bedroom of their family's house, 
and difficulties in the labor market, and these uncertain work 
schedules.
    So, you know, I am all in favor of getting rid of marriage 
penalties in public policies. We should not have marriage 
penalties, for sure. But we should think about the other things 
that are holding young people back from marriage. And they 
really need--and, you know, student debt we have been talking 
about.
    So it is no wonder that young people are delaying getting 
married, given that they do not have a stable place to live, 
they are in debt from school, and they do not have a stable 
job. And in some ways we would not want them to be rushing into 
marriage in those circumstances.
    So it is one of those three-bucket things that is pretty 
complex to improve prospects for young adults. But boy, I think 
it is the most pressing challenge we face today, to improve 
prospects for young adults, because they are the parents of the 
future.
    Chairman Lee. Indeed. Mr. Bourne, we are going to let you 
speak, and then Mr. Heck is up.
    Mr. Bourne. I guess this is probably the one area here I 
demur from Mr. Stone, actually. I am skeptical of the idea that 
tax policy affects this type of behavior to a significant 
degree, or also that changing tax policy would lead to any 
significant change in fertility rates.
    I say that for two main reasons. I think first because if 
you look across countries that have very different tax and 
benefits systems, there has been a similar kind of secular 
decline in fertility rates, which suggests there is something 
bigger going on about people's expectations and preferences as 
we get richer.
    But secondly, the mean age of first marriage for women is 
already much lower in the U.S. than in countries such as France 
and Sweden. But those countries have higher fertility rates.
    So this is one area where I just kind of question how much 
of an effect tax and benefit policy really has on this issue.
    Chairman Lee. That is an interesting point.
    Mr. Heck.
    Representative Heck. One last question, Mr. Stone. Our 
fertility rate is, last I checked, just under 1.8, nowhere near 
replacement. That obviously does not take into account 
immigration and therefore the overall population growth. But 
there is no question that we have been for awhile below 
replacement.
    And when I think about the kinds of programs we have like 
Social Security, which depend on the number of active workers 
in the workforce supporting the program that supports those who 
are retired, it begs the question about what are some of the 
long-term consequences of having a fertility rate which is 
below replacement--again, depending on immigration policy. And 
I suspect that there are some potentially serious implications.
    Would you care to just briefly enumerate some of them, 
please?
    Mr. Stone. So it would be easier to enumerate them if any 
of our long-term planning agencies like CBO, OMB, the Social 
Security Trustees, if any of these agencies bothered to do a 
simulation that simulated a fertility rate below 1.8. The 
lowest scenario that Social Security Trustees even consider as 
possible in a most recent update on the actuarial soundness of 
the Fund is 1.8--or 1.72 right now, and falling.
    So we are beyond the worst-case scenario of what any of 
your long-term planners have prepared for. You see the same 
thing in Census forecasts. They over-estimated the first year 
of their forecast--they over-estimated population growth by 
350,000 people in one year. That was a big miss.
    So the first step is just we should probably force our 
forecasting agencies to make sure that at least their first 
year of numbers is correct, let alone try to get a little more 
accurate on the out-years.
    Now given that we are not prepared for the demographic 
shift that is coming in terms of very low population growth, 
there will be significant consequences. We talked about housing 
wealth earlier.
    There was an article in The Wall Street Journal a few weeks 
ago about lots of older Americans who have bought sizeable 
houses in nice exurban neighborhoods, and they were planning to 
sell them for their retirement, and no one is buying them right 
now.
    Well, there would be demand----
    Representative Heck. Mr. Stone, let me just interrupt and 
interject something that is really important. A lot of those 
people want to down-size, and there is not a sufficient housing 
supply stock that they can get into, even if they could sell 
their home.
    Mr. Stone. Right. So you have a problem on both sides, 
that, one, they cannot sell the home because there just is not 
that much of a market there to buy it. That generation is 
smaller and also not as well-to-do. And second of all, the 
house they want to move into does not exist.
    Now but the truth is that we think about Social Security as 
an inter-generational transfer. The entire economy is an inter-
generational transfer. You own stock in a company that makes 
hot dogs? Well, guess what? There needs to be the kid who is 
going to eat the hot dog for you to sell it, for it to have any 
value when you sell it.
    Now we get a little bit of a free pass because our stock 
market is also, through a variety of channels, open to foreign 
investments. We get this nice thing where we buy goods from a 
foreign country. They take that money and they invest it into 
our securities, which is a nice handout for Americans as they 
grow older. But on some level there does need to be a next 
generation to consume those things to protect the value of the 
asset.
    So the long-term consequence of low fertility is permanent 
secular stagnation. That is, it is a permanent slowdown in 
economic demand. We heard a lot, which I appreciated, about 
wage stagnation, and how productivity has been growing but 
wages have not.
    Well, it has been better than it has been in Japan, which 
one reason for that is because there has been no population 
growth. There has been no growth in demand in the market size. 
There is no plausible story where investing in Japan is wise, 
because there is not growth. What is the growth market here?
    So at the end of the day what you get is you get less 
entrepreneurship, less innovation. You get less economic growth 
generally. You get less sustainable public finances. What we 
call in economic demography ``aging with dignity'' is very 
difficult. Very few countries achieve it.
    In the United States especially with increasingly unhealthy 
aging through deaths of despair and things like that, is not 
well set up to handle this. We are facing a very serious issue 
down the road.
    So when we think about low birth rate, replacement rate is 
not what motivates me. I care about people's individual desires 
and lives. I am not trying to get anybody to 2.1. If you want 
3, I would love you to have 3. If you want one, have one. But 
on some level, you do need a society that continues to have 
some growth in the market.
    Now that can be through immigration. It can be. However, 
fertility rates are falling in our traditional immigrant-
sending countries. They are below replacement in most of the 
world. Beyond that, more countries like Japan are aging and 
saying, hey, we need immigrants.
    So there is more competition for those workers, as well. 
Net migration rates in the U.S. have been falling for three 
decades. They are going to keep falling, regardless of what 
happens with policy. So we cannot count that immigration is 
just always going to lift our fiscal boat. It won't, not 
always.
    Representative Heck. Thank you, sir. Thank you, Mr. 
Chairman.
    Chairman Lee. I want to thank each of you for being here 
today. The testimony you have provided has been outstanding and 
very thoughtful.
    I thank all of the Members for coming and participating in 
the hearing, as well. We think we have had an outstanding 
exchange.
    We are going to adjourn here in a moment. As we do, I will 
note for Members that we will keep the record open for a period 
of three days, should there be a need to supplement the record 
in writing.
    And, we stand adjourned. Thank you.
    [Whereupon, at 4:42 p.m., Tuesday, September 10, 2019, the 
hearing in the above-entitled proceeding was adjourned.]

                       SUBMISSIONS FOR THE RECORD

Prepared Statement of Hon. Mike Lee, Chairman, Joint Economic Committee
    Good afternoon, and thank you for joining us for this hearing of 
the Joint Economic Committee.
    The American economy is thriving. The current economic expansion is 
the longest in U.S. history. Our unemployment rate has remained below 4 
percent for the past 18 months. In recent years, we've seen 
consistently solid GDP growth and job creation.
    Yet, for many parents across this country, raising a family is 
harder and more expensive than ever. The New York Times recently 
surveyed adults 20 to 45 who were parents or planned to be. One in four 
had fewer children--or expected to have fewer children--than they 
considered ideal. Economic concerns were foremost among the reasons 
that they fell short or believed they would.
    Over the past few years, the Joint Economic Committee's Social 
Capital Project has been documenting trends in our ``associational 
life,'' that is, the web of social relationships through which we 
pursue joint endeavors--our families, communities, workplaces, and 
religious congregations. A critical source of meaning and social 
capital is, of course, the family. That's why two of the Project's main 
policy objectives are: making it more affordable to raise a family, and 
increasing the number of children raised by happily married parents.
    The goals of today's hearing are to examine factors affecting 
family affordability and to explore policy approaches that would allow 
more Americans to start and raise the families they desire.
    Increasingly, ``family affordability'' has become a unifying 
concern among lawmakers and commentators on both the political left and 
right. We hear it in discussions around topics as varied as child tax 
credits, declining fertility rates, increases in the cost of child care 
and housing, paid family leave, and student debt burdens. Motivating 
all of these discussions is a simple sentiment: It shouldn't be this 
hard to raise a family.
    The problem is multifaceted. Economic challenges such as debt loads 
and increases in the cost of living make family formation and expansion 
difficult for many Americans. Even many families that are economically 
stable must deal with the challenges of balancing work and family. 
Parents want to afford the best neighborhoods and schools for their 
children, but that often leaves too little time to spend with them. As 
more families have sent two earners into the workforce, employers have 
been slow to accommodate their desire for balance.
    Meanwhile, Americans who might prefer something closer to a 
traditional single-breadwinner family face prices for housing and other 
expenses that are bid up by dual-earner households. And the growing 
ranks of single parents are hampered by their high poverty rates.
    The answer to ``How did we get here?'' is complicated. Our first 
step must be to adequately diagnose the problems facing our families. 
What fuels the rising costs of healthcare, child care, education, and 
housing? How many people are hindered in family formation by excessive 
student loan debt, inadequate income, or poor job prospects? To what 
extent does declining fertility reflect changing preferences, economic 
barriers, or other factors? Does the rise of the dual-earner family 
signal increasing hardship or simply changing values?
    The next step must be to come up with solutions. What is the best 
way to help more families afford time out of the workforce to care for 
newborns? Are there ways to increase work-family flexibility that are 
minimally disruptive to employers? Are there government policies that 
unintentionally have contributed to increases in the cost of housing, 
higher education, and health care--which can be reformed? How can we 
make the tax code fairer to parents who bear the costs of supporting 
future generations of Americans?
    Our panelists today will discuss some of these topics--and more. I 
look forward to their testimonies and to a productive conversation 
aimed at helping parents and strengthening our families.
    I now recognize Vice Chair Maloney for opening remarks.
                               __________
   Prepared Statement of Hon. Carolyn B. Maloney, Vice Chair, Joint 
                           Economic Committee
    Chairman Lee, thank you for shining a spotlight on the challenges 
facing American families.
    We agree there is a problem.
    Today, millions of American families are working longer and 
harder--not to get ahead--but just to stay in place.
    Over the past four decades, wages have been stuck or have barely 
increased.
    Meanwhile the costs of child care, education, housing and other 
necessities have grown.
    Most families rely on two incomes just to make ends meet.
    Nearly 40 percent of American adults report that they or their 
families have trouble paying for at least one basic need like food, 
health care, housing or utilities.
    The picture is no brighter when you look at specific costs.
    Take child care.
    The average cost of center-based infant care is more than one-
quarter of median household income for single working parents. That 
means those who need child care the most can't afford it.
    Or look at college education--which is almost a necessity in 
today's economy.
    Since the 1980s, the average cost of a full-time undergraduate 
degree has more than tripled for public and private institutions.
    Today's typical graduate leaves college with $30,000 in debt.
    Or look at housing.
    Home prices are higher than ever and often out of reach. And over 
one-third of renters spend more than 30 percent of their income on 
rent.
    How are families responding to stagnant wages and growing costs?
    By taking on debt.
    Consumer debt, excluding mortgages, is now $4 trillion--its highest 
level ever after adjusting for inflation.
    Folks are also putting off home ownership, which can deprive them 
of a key source of wealth accumulation.
    Everyone in this room agrees that it's more expensive than ever to 
raise a family.
    But we may disagree about the causes. And we may disagree about the 
solutions.
    I welcome the robust discussion that this committee provides.
    The entrance of women in the workforce is not the problem. We may 
hear that Americans got married less frequently or later in life as 
women took on careers, and that this hurt fertility rates.
    But women have become key drivers of our economic success.
    Women's earnings boost the economy by trillions of dollars and are 
critical to American families.
    Women's share of household earnings increased from 36 percent in 
1993 to 45 percent in 2016.
    Women could do even more if we made it easier for them to enter and 
stay in the workforce.
    There are two key, overwhelmingly popular ways to do that: offer 
affordable child care and paid leave from work.
    Let's take a lesson from other OECD countries that provide these 
services and have significantly higher female labor force 
participation.
    And while we're at it, let's make sure that women are paid fairly 
so they have strong incentives to work.
    On average, a woman working full time year-round earns just 82 
percent of her male counterpart.
    For Black and Hispanic women it's far worse.
    For too many, the American Dream is slipping away or out of reach.
    Some would say that the solution is for the Federal Government to 
do nothing.
    I disagree. It has a key role to play in helping to restore that 
dream.
    What can it do? What can Congress do?
    Let's start by lifting the minimum wage.
    The House has passed legislation to lift the minimum wage to $15 by 
2025 and give 33 million Americans a raise. It's time for the Senate to 
follow suit.
    We should expand programs and initiatives that we know work--like 
the Earned Income Tax Credit and Child Tax Credit.
    The EITC substantially increases employment among single mothers 
and reduces poverty levels for their families.
    We should make the Child Tax Credit fully refundable to allow the 
poorest families to receive the full benefit.
    The Working Families Tax Relief Act, which expands both the EITC 
and CTC, would benefit 49 million children, including 2.7 million in 
New York State.
    And we should strengthen the Supplemental Nutritional Assistance 
Program. SNAP not only provides a healthy foundation for America's 
current and future workforce, it's also an investment in our economy.
    Every dollar of SNAP generates more than one and a half dollars in 
increased GDP.
    And, finally, we should join the rest of the industrialized world 
and provide paid leave to workers.
    My bill, which was included in the National Defense Authorization 
Act that passed the House this summer, is a good start.
    It would provide 12 weeks of paid leave to Federal employees after 
the birth or adoption of a child or to care for a family member who has 
a serious illness.
    Raising a family is hard and rewarding work.
    We need to do more to provide workers with tools to balance their 
work and family responsibilities.
    Today's hearing and our witnesses' testimony will shed light on the 
actions we can take to make raising a family more affordable.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Question for the Record for Dr. Waldfogel Submitted by Senator 
                               Klobuchar
    There is a national shortage of affordable, quality child care, 
especially in rural communities. While many families struggle to find 
access to available child care, states are continuing to experience a 
noticeable decline in the number of child care providers, leading to 
the expansion of ``child care deserts.'' My Child Care Workforce and 
Facilities Act would provide competitive grants to states to train 
child care workers and build or renovate child care facilities in areas 
with child care shortages.

      In your testimony, you note that existing Federal child 
care policies are ineffective and consist primarily of subsidies that 
reach only about 15 percent of eligible low-income families. Can you 
tell us more about how new Federal policies, including policies that 
seek to increase the supply of affordable, quality child care, can help 
fill this gap?

    Thank you for this question and for your leadership on this 
important issue. The tensions between child care affordability, 
quality, and access create difficulties for providers as well as 
consumers. Quality child care is expensive--and the reality is that 
low- and middle-income families cannot afford it without some kind of 
subsidy. But subsidies are very limited and in the absence of 
subsidies, many families have no choice but to use informal care or no 
care. The high cost of quality care also creates pressures for 
providers--so we should not be surprised to see many of them closing or 
cutting back. Yet families need quality, affordable, and accessible 
child care if parents are to work and if children are to be ready for 
school. So initiatives like yours to provide competitive grants to 
states to train child care workers and build or renovate child care 
facilities in areas with shortages are very much needed.
                               __________
                               
 Question for the Record for Ms. Rowe-Finkbeiner Submitted by Senator 
                               Klobuchar
    Over the past few decades, the cost of raising children has gone up 
much faster than most Americans' wages. If we are going to build a 
stronger middle class, we need to make sure that Americans can work 
their way into it, which is why I support increasing the Federal 
minimum wage to $15 an hour.

      Based on your research into this issue, how would you 
expect an increase in the minimum wage to impact childhood development 
outcomes?

    Study after study show that an increase in the minimum wage would 
significantly improve child development outcomes. The harm poverty 
causes to children is particularly damaging--and long lasting. Children 
in families in poverty are at a greater risk for lower IQ, poor 
academic achievement, developmental delays, and socioemotional and 
behavioral problems.\1\ This is underscored by a recent review of 
studies on the link between family income and child outcomes, which 
found overwhelming evidence that higher household income results in 
positive child development, including higher educational attainment.\2\
---------------------------------------------------------------------------
    \1\ https://www.apa.org/monitor/2016/04/living-wage and https://
firstfocus.org/blog/increasing-the-minimum-wage-is-good-for-child-well-
being.
    \2\ sticerd.lse.ac.uk/dps/case/cp/casepaper203.pdf.
---------------------------------------------------------------------------
    Why are children helped so much by an increase in the minimum wage? 
Two-thirds of all minimum wage earners are \3\ women; and women--
particularly women of color and moms--not only face wage, hiring, and 
advancement discrimination but are also at the epicenter of a huge 
crisis in our Nation related to wealth inequality and our rapidly 
shifting work structures, all of which significantly and negatively 
affects children since more than 80 percent of women in our Nation 
become moms.
---------------------------------------------------------------------------
    \3\ National Women's Law Center, Minimum Wage, http://www.nwlc.org/
our-issues/poverty-%2526-income-support/minimum-wage http://
www.nwlc.org/our-issues/poverty-%2526-income-support/minimum-wage.
---------------------------------------------------------------------------
    As a frame of reference, only 10 percent of all women in the labor 
force earn $75,000 or more annually, which means 90 percent of all 
working women earn less. In fact, 31 percent of women are in the next 
lower wage bracket, earning between $30,000 and $74,999 annually, and 
the majority of working women (59 percent) earn less than $30,000 
annually.\4\
---------------------------------------------------------------------------
    \4\ ``Selected Characteristics of People 15 Years and Over, by 
Total Money Income, Work Experience, Race, Hispanic Origin, and Sex,'' 
U.S. Census Bureau, compiled by Sarah Jane Glynn, updated August 9, 
2017, https://www.census.gov/data/tables/time-series/demo/income-
poverty/cps-pinc/pinc-01.html.
---------------------------------------------------------------------------
    An impossibly low minimum wage is contributing to the appalling 
fact that one in every 30 children is homeless in the United States 
right now.\5\
---------------------------------------------------------------------------
    \5\ https://www.air.org/center/national-center-family-
homelessness#targetText=
A%20staggering%202.5%20million%20children,children%20in%20the%20United%2
0States.
---------------------------------------------------------------------------
    Too many women and families are struggling to get by and raise 
children in a changing economy where wealth inequality is expanding and 
the fastest growing job sectors are in low-wage industries, so raising 
the minimum wage is urgent for children, women, and families.\6\ These 
job sectors include retail, food service, and direct-care industries 
(which employ domestic workers and the people taking care of homes, 
children, and elders). It should be noted that domestic workers face 
incomplete coverage in the Fair Labor Standards Act and too often lack 
benefits and fair pay, which also urgently needs attention.
---------------------------------------------------------------------------
    \6\ ``The 10 Fastest Growing Jobs,'' U.S. Department of Labor Blog, 
March 15, 2015, https://blog.dol.gov/2015/03/15/the-10-fastest-growing-
jobs. ``Occupations with the Most Job Growth,'' Bureau of Labor 
Statistics, United States Department of Labor, updated October 24, 
2017, https://www.bls.gov/emp/ep_table_104.htm.
---------------------------------------------------------------------------
    In addition to the rapid expansion of low-paying jobs, the ``gig 
economy''--the short-term contract work replacing full-time positions--
as well as disruption across industries, automation, and a shift from 
holding one or two jobs in our lives to many all demonstrate how work 
has changed for most Americans.
    Because of these shifts, and as the Federal minimum wage has 
remained stagnant, fewer and fewer women, moms, and families have 
access to economic protections that also cover children like job-based 
retirement income, health care, and other traditional employer-linked 
benefits that help stabilize economic security and open avenues for 
children to thrive. The need for universal protections and benefits 
that stay with the worker instead of being tied to a specific 
workplace, which everyone--at every wage level--can access, is also 
becoming increasingly urgent. This urgency is partly because jobs 
within the growing ``gig economy'' are largely missing these crucial 
protections. It's also because today, the lower the wage someone earns 
at their job, the less likely that person is to have access to 
necessary workplace protections like earned sick days, paid family/
medical leave, adequate health care coverage, and affordable childcare. 
These protections are a given in most other industrialized countries.
    We are in a perfect storm. Shifting work structures, stagnant 
minimum wages, and a damaging lack of workplace benefits and 
protections are happening at the very same time families need women's 
incomes to fuel their budgets and as female-dominated, low-wage jobs 
are among the fastest-growing employment sectors in our economy.\7\
---------------------------------------------------------------------------
    \7\ ``The 10 Fastest Growing Jobs,'' U.S. Department of Labor Blog, 
March 15, 2015, https://blog.dol.gov/2015/03/15/the-10-fastest-growing-
jobs. ``Occupations with the Most Job Growth,'' Bureau of Labor 
Statistics, United States Department of Labor, updated October 24, 
2017, https://www.bls.gov/emp/ep_table_104.htm.
---------------------------------------------------------------------------
    Increasing the minimum wage for everyone, and having one fair wage 
that includes tipped workers, is absolutely necessary to combat poverty 
in children and families, as well as to increase the health and success 
of children:

      Studies find that as the minimum wage is increased, birth 
weight is also increased, primarily because of increased gestational 
length and fetal growth rates.\8\
---------------------------------------------------------------------------
    \8\ https://www.nber.org/papers/w22373 https://www.nytimes.com/
interactive/2019/02/21/magazine/minimum-wage-saving-lives.html.
---------------------------------------------------------------------------
      Studies show that economic hardship increases parents' 
stress and reduces their quality time with children.\9\
---------------------------------------------------------------------------
    \9\ https://www.nytimes.com/interactive/2019/02/21/magazine/
minimum-wage-saving-lives.html https://www.ncbi.nlm.nih.gov/pmc/
articles/PMC5966045/.
---------------------------------------------------------------------------
      All aspects of child development have been shown to have 
better outcomes when parents make living wages and can provide children 
with quality health care and child care, access to education, and 
support for their basic needs.\10\
---------------------------------------------------------------------------
    \10\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5966045/.

    Further, increasing the minimum wage would not only have clear 
benefits for millions of children and low-wage workers, it would also 
strengthen our overall economy, especially since our economy and 
workforce are shifting quickly.
    As another frame of reference, in 2019 the Federal minimum wage is 
still stuck, as it has been since 2009, at the deplorably low rate of 
$7.25 per hour,\11\ or $15,080 per year for a person who works full-
time year-round with no breaks. And the Federal minimum wage for tipped 
workers is just $2.13 per hour. Nearly half of all current minimum wage 
workers have had some college experience or an associates degree. One 
in ten minimum wage workers has a bachelor's degree or higher. Only 20 
percent of minimum wage workers are teens.\12\ The scale of the income 
inequality crisis overall is illustrated by the fact that 50 percent of 
all working people in our Nation make $17.81 per hour or less,\13\ 
which means that a large number of people are holding low-wage jobs.
---------------------------------------------------------------------------
    \11\ ``Minimum Wage,'' U.S. Department of Labor, 2017, https://
www.dol.gov/general/topic/wages/minimumwage.
    \12\ ``Characteristics of Minimum Wage Workers, 2016,'' BLS 
Reports, Bureau of Labor Statistics, U.S. Department of Labor, updated 
April 2017, https://www.bls.gov/opub/reports/minimum-wage/2016/
home.htm.
    \13\ ``May 2016 National Occupational Employment and Wage Estimates 
United States,'' Bureau of Labor Statistics, U.S. Department of Labor, 
updated March 31, 2017, https://www.bls.gov/oes/current/oes_nat.htm#00-
0000.
---------------------------------------------------------------------------
    Think about those low numbers. Remember that women are currently 42 
percent of all primary breadwinners for families and that three-
quarters of moms are in the labor force contributing to the family 
income.\14\ Particularly with women making up nearly two-thirds (64 
percent) of minimum wage workers,\15\ raising the minimum wage would be 
a good start on the road to addressing the income inequality and 
poverty that women face, to break through the barriers holding children 
back, and to boosting our economy.
---------------------------------------------------------------------------
    \14\ Wendy Wang, Kim Parker, and Paul Taylor, ``Breadwinner Moms: 
Mothers Are the Sole or Primary Provider in Four-in-Ten Households with 
Children; Public Conflicted about the Growing Trend,'' Pew Research 
Center, May 29, 2013, http://www.pewsocialtrends.org/2013/05/29/
breadwinner-moms. Sarah Jane Glynn, ``Breadwinning Mothers Are 
Increasingly the U.S. Norm,'' Center for American Progress, December 
19, 2016, https://www.americanprogress.org/issues/women/reports/2016/
12/19/295203/breadwinning-mothers-are-increasingly-the-u-s-norm.
    \15\ ``Characteristics of Minimum Wage Workers, 2016,'' BLS 
Reports, Bureau of Labor Statistics, U.S. Department of Labor, April 
2017, https://www.bls.gov/opub/reports/minimum-wage/2016/home.htm.
---------------------------------------------------------------------------
    But hold onto your hats, because the data gets even more troubling: 
The Federal minimum wage for tipped workers is just $2.13 per hour, and 
over half of tipped workers are women, disproportionately women of 
color, and over a quarter are moms. Tipped workers haven't seen a raise 
in the Federal wage since 1991.\16\
---------------------------------------------------------------------------
    \16\ ``On 25th Anniversary of Last Tipped Minimum Wage Increase, 
Prominent National Advocacy and Research Groups Call for Nation to 
Adopt One Fair Wage for All Workers,'' ROC United, March 31, 2016, 
http://rocunited.org/25th-anniversary-2-13.
---------------------------------------------------------------------------
    To be clear, as raising the minimum wage lifts children, it also 
boosts the economy, not the other way around. For instance, studies 
show that gradually raising the minimum wage to $15 by 2024 would 
directly lift the wages of 22.5 million workers and affect another 19 
million workers who would benefit from a spillover effect. All in all, 
raising the minimum to $15 in 2024 would directly or indirectly lift 
wages for 41.5 million workers, or 25 percent of the projected labor 
force in 2024,\17\ which is a significant boost to our consumer-fueled 
economy.\18\,\19\ Further, because low-paid workers have to spend much 
of their extra earnings fairly quickly on the necessities of day-to-day 
life, including on raising children, this injection of wages would 
increase consumer spending, which would help stimulate the economy and 
spur greater business activity and job growth.\20\ In fact, a study 
from UC Berkeley Labor Center found that the poverty-level wages paid 
by employers cost U.S. taxpayers $152.8 billion each year in public 
support for working families who otherwise would not be able to put 
food on the table.
---------------------------------------------------------------------------
    \17\ ``Labor Force Projections to 2024: The Labor Force is Growing, 
But Slowly,'' Monthly Labor Review, Bureau of Labor Statistics, U.S. 
Department of Labor, December 2015, https://www.bls.gov/opub/mlr/2015/
article/labor-force-projections-to-2024.htm.
    \18\ David Cooper, ``Raising the Minimum Wage to $15 By 2024 Would 
Lift Wages for 41 Million American Workers,'' Economic Policy 
Institute, April 26, 2017, http://www.epi.org/publication/15-by-2024-
would-lift-wages-for-41-million.
    \19\ Economic Policy Institute, ``It's Time to Raise the Wage,'' 
April 23, 2015, http://www.epi.org/publication/its-time-to-raise-the-
minimum-wage.
    \20\ David Cooper, ``Raising the Minimum Wage to $15 By 2024 Would 
Lift Wages for 41 Million American Workers,'' Economic Policy 
Institute, April 26, 2017, http://www.epi.org/publication/15-by-2024-
would-lift-wages-for-41-million.
---------------------------------------------------------------------------
    In addition, by raising workers' wages, fewer people will have to 
depend on programs like SNAP and fewer children would go hungry.\21\ 
This is critically important because 11 million children in the U.S. 
face hunger right now, impeding their ability to grow and thrive.\22\
---------------------------------------------------------------------------
    \21\ Ken Jacobs, Ian Perry, and Jenifer MacGillvary, ``The High 
Public Cost of Low Wages,'' UC Berkeley Center for Labor Research and 
Education, April 2015, http://laborcenter.berkeley.edu/pdf/2015/the-
high-public-cost-of-low-wages.pdf.
    \22\ https://www.feedingamerica.org/hunger-in-america/child-hunger-
facts.
---------------------------------------------------------------------------
    One study showed that raising the minimum wage would create 140,000 
new jobs (or more).\23\ The Federal Reserve Bank of Chicago says a 
raise in the minimum wage would help our economy by increasing 
household spending nationwide by roughly $48 billion. That's enough to 
move the needle on our gross domestic product.\24\ It's clear that 
raising the minimum wage boosts children, families and our economy. 
(It's no coincidence that Seattle, the city with the highest minimum 
wage in the country--approaching $15 per hour--also has the Nation's 
highest job growth. And that with Maine's voter-approved minimum wage 
increase in 2017, 10,000 Maine children were lifted out of 
poverty.\25\)
---------------------------------------------------------------------------
    \23\ David Cooper and Douglas Hall, ``Raising the Federal Minimum 
Wage to $10.10 Would Give Working Families, and the Overall Economy, a 
Much-Needed Boost,'' Economic Policy Institute, March 13, 2013, http://
www.epi.org/publication/bp357-federal-minimum-wage-increase.
    \24\ Cameron Davis, ``Study: A Minimum Wage Hike Would Stimulate 
the Economy,'' Think Progress, July 8, 2013, https://thinkprogress.org/
study-a-minimum-wage-hike-would-stimulate-the-economy-f02ca75732fc.
    \25\ https://www.mecep.org/wp-content/uploads/2018/09/Minimum-Wage-
Child-Poverty-092418.pdf.
---------------------------------------------------------------------------
    It's long past time to raise the minimum wage. Millions of children 
have parents who would benefit if the Federal minimum wage was 
raised\26\--and those children would benefit significantly too. The 
evidence is strong that child development outcomes would improve with a 
higher minimum wage. Now is clearly the time to act.
---------------------------------------------------------------------------
    \26\ https://www.epi.org/publication/raising-the-federal-minimum-
wage-to-15-by-2024-would-lift-pay-for-nearly-40-million-workers/.
---------------------------------------------------------------------------
    Thank you.
  

                                  [all]