[Senate Hearing 117-372]
[From the U.S. Government Publishing Office]
S. Hrg. 117-372
THE ROLE OF CHILDCARE IN AN EQUITABLE POSTPANDEMIC ECONOMY
=======================================================================
HEARING
before the
SUBCOMMITTEE ON
ECONOMIC POLICY
of the
COMMITTEE ON
BANKING,HOUSING,AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
ON
EXAMINING CHILDCARE AS A CRITICAL PART OF HOW OUR ECONOMIC RECOVERY
PLAYS OUT AND WHAT OUR ECONOMY WILL LOOK LIKE GOING FORWARD
__________
JUNE 23, 2021
__________
Printed for the use of the Committee on Banking, Housing, and Urban
Affairs
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available at: https: //www.govinfo.gov /
______
U.S. GOVERNMENT PUBLISHING OFFICE
48-667 PDF WASHINGTON : 2022
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
SHERROD BROWN, Ohio, Chairman
JACK REED, Rhode Island PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey RICHARD C. SHELBY, Alabama
JON TESTER, Montana MIKE CRAPO, Idaho
MARK R. WARNER, Virginia TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia JERRY MORAN, Kansas
RAPHAEL WARNOCK, Georgia KEVIN CRAMER, North Dakota
STEVE DAINES, Montana
Laura Swanson, Staff Director
Brad Grantz, Republican Staff Director
Cameron Ricker, Chief Clerk
Shelvin Simmons, IT Director
Charles J. Moffat, Hearing Clerk
______
Subcommittee on Economic Policy
ELIZABETH WARREN, Massachusetts, Chair
JOHN KENNEDY, Louisiana, Ranking Republican Member
JACK REED, Rhode Island TIM SCOTT, South Carolina
CHRIS VAN HOLLEN, Maryland THOM TILLIS, North Carolina
TINA SMITH, Minnesota KEVIN CRAMER, North Dakota
JON OSSOFF, Georgia STEVE DAINES, Montana
Gabrielle Elul, Subcommittee Staff Director
Natalia Riggin, Republican Subcommittee Staff Director
(ii)
C O N T E N T S
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THURSDAY, JUNE 23, 2021
Page
Opening statement of Chair Warren................................ 1
WITNESSES
Fatima Goss Graves, President and CEO, National Women's Law
Center......................................................... 3
Prepared statement........................................... 27
Betsey Stevenson, Professor of Public Policy and Economics,
Gerald R. Ford School of Public Policy......................... 4
Prepared statement........................................... 34
Bernadette Ngoh, Founder, Trusted Care Family Day Care Home...... 6
Prepared statement........................................... 37
Rachel Greszler, Research Fellow in Economics, Budget and
Entitlements, The Heritage Foundation.......................... 7
Prepared statement........................................... 40
Responses to written questions of:
Senator Kennedy.......................................... 62
Abby M. McCloskey, Founder and Principal, McCloskey Policy, LLC.. 9
Prepared statement........................................... 55
Responses to written questions of:
Senator Kennedy.......................................... 66
(iii)
THE ROLE OF CHILDCARE IN AN EQUITABLE POSTPANDEMIC ECONOMY
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THURSDAY, JUNE 23, 2021
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Subcommittee on Economic Policy,
Washington, DC.
The Committee met at 2:32 p.m., via Webex and in room SD-
538, Dirksen Senate Office Building, Hon. Elizabeth Warren,
Chair of the Subcommittee, presiding.
OPENING STATEMENT OF CHAIR ELIZABETH WARREN
Chair Warren. Good afternoon, everyone.
I want to welcome my colleagues and all of our witnesses to
this hearing of the Banking Committee's Economic Policy
Subcommittee.
I want to thank Senator Kennedy for working with me and my
staff to make this a successful hearing.
I believe that this may be the first hearing about
childcare in the history of the Banking Committee. But really,
this should not be surprising. We are here to talk about our
economy and economic recovery, and childcare is a critical part
of how our economic recovery plays out and what our economy
will look like going forward.
As we look ahead to our postpandemic economy, childcare is
essential for helping parents get back to work. A national
survey found that nearly 20 percent of working parents left the
workforce or reduced their hours solely due to a lack of
childcare. And 26 percent of women who became unemployed during
the pandemic attributed this to a lack of childcare.
In order for parents to return to work, they need safe,
reliable and affordable childcare. Without it, many parents
will find that they are struggling to interview for jobs, let
alone to hold down a job or advance their careers. A strong
economic recovery depends on solving this problem.
High-quality childcare and early learning is about parents'
jobs. But it is also about early learning for children. A
mountain of evidence shows that high-quality early learning
supports important brain development, helps children get ready
for school, and leads to higher earnings and better outcomes
throughout a child's life. For every dollar we invest in high-
quality early childhood programs study after study shows that
we get a return of somewhere between $4 and $9 back on down the
line.
New research has found that spending on programs that
support children's health and well-being reduce medical costs,
improve college attendance, and lead to higher earnings and
higher tax payments. In other words, these programs pay for
themselves by the time the children become adults. This is not
just a nice thing to do. It is a smart investment that will
yield returns for our country's future.
And finally, we need to address the fact that childcare
providers are seriously underpaid. Today, childcare workers
earn an average of just $12 an hour. Childcare providers are
some of our Nation's most important early teachers but our
Nation has undervalued the work they do for far too long.
Ninety-five percent of childcare providers are women and
they are disproportionately women of color. Ensuring that
childcare jobs are good jobs, with fair pay and benefits, and
that jobs that will support families while doing this essential
work, will permit childcare workers to stay in the field, to
buildup expertise, and to improve the care they offer to our
children.
For generations, we have told parents that when it comes to
finding quality, affordable childcare they are on their own.
That is bad for parents, bad for babies, and bad for childcare
workers. There is a reason that childcare was front and center
in President Biden's American Families Plan. This is critical
infrastructure that makes all other work possible.
I am very concerned about the bipartisan framework released
last week that did not include a word, not one word, about
childcare. An infrastructure plan that does not include
childcare does not address the challenges facing families in
Massachusetts or anywhere else around the country.
Now is not the time to abandon what President Biden has
proposed. Now is the time to expand it.
I am fighting for a $700 billion Federal investment to make
sure that every single family who needs it can find safe,
affordable childcare. That is good for parents, it is good for
children, it is good for providers, and it is good for our
whole economy.
So that is why we are here today, to understand the problem
and to figure out how to address the challenges facing families
and build a stronger economy that works for all of us.
Our first witness, Fatima Goss Graves, is the President and
CEO of the National Women's Law Center, where she has spent her
career fighting to advance opportunities for women and girls.
Next, we will hear from Dr. Betsey Stevenson, a Professor
of Public Policy and Economics at the University of Michigan.
Dr. Stevenson has served on the Council of Economic Advisors as
an advisor on social policy and labor market issues and as
Chief Economist at the Department of Labor.
We are lucky to be joined today by Bernadette Ngoh, a
founder of Trusted Care, a family childcare program in West
Haven, Connecticut. As a family childcare provider, Ms. Ngoh
operates her program 24 hours a day--think about that--and is
committed to quality, equity, accessability, and community
support.
After Ms. Ngoh, we will hear from Abby McCloskey, the
Founder and Principal of McCloskey Policy, LLC, a research and
consulting firm serving businesses and political leaders across
the country.
And finally, we are joined by Rachel Greszler, a Research
Fellow at The Heritage Foundation, whose work focuses on
retirement and labor policies as well as workplace and family
issues.
The pandemic has exposed the challenges that have faced
working families and childcare providers for decades. We have
an historic opportunity right now to make sure that every
family that needs it can find and afford childcare, and that
every childcare provider earns a living wage with good
benefits.
So I want to thank all of our witnesses for joining us
today. I look forward to hearing your testimony.
There is going to be a vote at three o'clock. I am going to
step out during that vote and Senator Smith is going to take
over the gavel and run the hearing while I vote.
And with that, I would like to start with Ms. Goss Graves
and recognize you for 5 minutes for your testimony, please.
STATEMENT OF FATIMA GOSS GRAVES, PRESIDENT AND CEO, NATIONAL
WOMEN'S LAW CENTER
Ms. Goss Graves. Well good afternoon, Chair Warren and
Ranking Member Kennedy and all of the distinguished members of
the Subcommittee.
My name is Fatima Goss Graves, and I am President and CEO
at the National Women's Law Center. For both Chair Warren and
Senator Smith, we are so grateful for your leadership on
childcare. And we are grateful to Congress for the American
Rescue Plan and the 2020 COVID relief packages which together
provided a $50 billion amount in relief funding that saved the
childcare sector from collapse. But we can make no mistake, the
investment in childcare cannot end there.
For the childcare and early learning sector, the pandemic
has really laid bare and really exacerbated deep inequities in
our childcare system that have long been baked-in, that
families are required to pay sums that are unaffordable, that
early educators are being paid poverty-level wages, and too
many communities across the country are faced with situations
where there are not enough childcare workers and there are
insufficient facilities to support the demand.
Since the start of the pandemic, the decline in mother's
labor force participation have been nearly double that of
fathers. Research shows that COVID has led mothers of young
children in particular to reduce their work hours by as many as
four to five times more than fathers.
And while these numbers are cause for alarm, what is
actually more surprising, I think, is we are not seeing an even
larger reduction in labor force participation yet. And that is
because throughout history mothers have found workarounds.
Workarounds by accepting jobs that pay lower wages. Workarounds
by putting off educational opportunities, opportunities to grow
in their careers and to provide for their family, foregoing
other necessities for their families and for themselves because
the cost of childcare eats up a third or more of their income,
all while working themselves to the bone to care for their
families.
And as parents are desperately seeking childcare in this
moment, we risk not only undermining employment, undermining
economic growth in this country, but also undermining
children's long-term development.
When we invest in children starting at birth it yields
long-term positive outcomes for their health, for their
education options, for their employment options. And from birth
to age three, we know that children's brains are making more
than 1 million neural connections per second. And that is
influenced greatly by caregivers.
So what we need is universal and reliable and affordable
high-quality childcare so that all parents, but also the mostly
women and women in color in particular who have been barely
hanging on in this pandemic can get and can keep jobs, and that
the workers, the mostly women workforce, the mostly women of
color workforce, can do the critical work of care that we all
value so much for pay that actually matches that work.
We are seeking and think we need a $700 billion investment
in directly spending to ensure that we can meet this moment.
Meet a moment that no family would pay more than 7 percent of
their income, so that childcare providers can be paid on parity
with kindergarten teachers, and that there can be more
childcare slots available for families in this country, and
that we can get 2.3 million good paying jobs nearly all of
which would be held likely by women.
And this investment will also enable parents, and
especially mothers, to participate in the labor force and have
greater financial security.
We have a new study out with Columbia University that shows
that increasing the number of women with young children working
full time, increasing this investment would increase the number
of women with young children working full time by 17 percent.
And for women without a college degree, it is 31 percent.
So I will just conclude with just a couple of final
thoughts, and that is pre-COVID our status quo was
unsustainable. We knew that. It was unsustainable. It left
families behind. It left women workers in a bind. We can do the
work that demonstrates that childcare is infrastructure in this
country.
Thank you so much for having me and I look forward to any
questions.
Senator Warren. Thank you very much, Ms. Goss Graves. That
is very helpful.
Dr. Stevenson is joining us by Webex. You are recognized
for 5 minutes.
[Pause.]
Chair Warren. There is that long pause. Dr. Stevenson, are
you there?
STATEMENT OF BETSEY STEVENSON, PROFESSOR OF PUBLIC POLICY AND
ECONOMICS, GERALD R. FORD SCHOOL OF PUBLIC POLICY, UNIVERSITY
OF MICHIGAN
Ms. Stevenson. I am. Thank you, very much.
Thank you for the invitation to speak today about
childcare. I an economist who has spent much of the past three
decades trying to better understand women's employment,
American families, and the porous boundaries between our
personal lives and our work lives. These porous boundaries were
completely shredded during the pandemic as tens of millions of
people began to work from home for the first time along with
their children who lost access to in-person school and
childcare.
My research has shown that policy choices shape the
constraints that people face and therefore their employment and
family decisions. The choices you make now about childcare will
shape the U.S. macroeconomy for decades to come by influencing
who returns to work, what types of jobs parents take, and what
kinds of promotion paths parents are able to access.
It is not just women, men's employment choices are also
shaped by access to childcare. In 2014, a survey found that 49
percent of parents said that at some point they had passed up a
job because it conflicted with family obligations.
In a recent survey that I have been running just over the
past month in conjunction with RIWI, we found that childcare
responsibilities during the COVID-19 crisis impacted the
employment of 59 percent of parents. Only 41 percent of parents
said childcare had not affected their job.
Many cut their work hours, turned down promotions, changed
jobs for more flexibility, paused training or education, or
quit jobs entirely. These impacts were reported by men and
women almost in equal number, a fact that reflects the shift
toward greater, although not complete, equality in the home.
Let me emphasize that the pandemic did highlight that women
continue to bear disproportionate responsibility for care
giving within families and the COVID crisis impacted women more
than men in many ways.
The first factor was the nature of the recession itself.
This was our very first ever service sector driven recession.
Between February 2020 and May 2020, women lost 13 million jobs
compared to 9 million jobs lost by men. However, over the last
several months of recovery the gap has been reversing as jobs
for women have been expanded faster than those by men. This is
important because it points to the role that women are playing
in the economy and how essential they are.
The second factor was, of course, the closing of schools
and childcare. More than two-thirds of children live in
households in which all parents work. The pandemic made salient
the many roles that schools play. K-12 education is typically
thought of as a source of education for children and an
investment in the next generation. It is. It is also a source
of childcare for many families who are able to work for pay
during the roughly 6 hours that their children are being taught
and cared for by professional educators provided for through
their tax dollars.
Childcare for younger children serves a very similar dual
purpose. Early childhood educators can improve outcomes for
children by engaging in developmentally appropriate curriculum-
based activities. They also provide crucial care for children
in households in which all parents work.
The third factor is related to changes in family life. And
I really want to highlight this because it is often overlooked.
Mothers of young children were more likely to be in the labor
force at the time of the pandemic than in any time in the past.
In 2019, mothers of children 6 years old and younger had the
highest labor force participation from any period in history.
These challenges that women faced highlight our failure to
adapt childcare, workplace flexibility, and workplace parental
leave policies as women have entered the workforce and gained
experience, training, and education that has made them an
essential part of the economy. Women are no longer the
secondary earners as economists used to refer to them, able to
step back from work whenever the household demanded it. Today,
more than 40 percent of mothers are the primary earner for
their family, earning at least half of total household income.
I want to highlight in my last few minutes just really the
important role that childcare plays. Childcare and education
has more in common to the banking system then you may suspect.
It is the backbone of our future economy because it invests in
and develops our human capital. While women have done this
labor for no or little pay, do not underestimate its value.
Human talent to these investments and its ultimately human
ingenuity that fuels our economic growth.
Early childhood education does three things: it provides
childcare that allows parents to work, thereby raising
household income. It develops skills in children that lead to
higher lifetime earnings. And it supports the equal investments
in children necessary for a competitive market economy to reach
its potential.
Thank you.
Chair Warren. Thank very much, Dr. Stevenson. I appreciate
your being here.
And now, Ms. Ngoh, you are recognized for 5 minutes for
your testimony.
STATEMENT OF BERNADETTE NGOH, FOUNDER, TRUSTED CARE FAMILY DAY
CARE HOME
Ms. Ngoh. Thank you for the opportunity to speak to you
today.
I am Bernadette Akum Ngoh. I own a childcare program in
Connecticut. My program runs 24 hours to take care of the
varied needs of workers, parents.
I was raised in Cameroon by a single mom who had little
education but wanted me to go to school, wanted me to learn.
And that helped me along the line to acquire education.
I did go to school, just like we are looking forward to our
kids to go to school. I earned a degree in law, I earned a
degree and postgraduate diploma in women's law. I earned a
degree in counseling and an MBA.
What does this tell me? That early childhood education is
very important today, tomorrow, and forever. If we have to
change our economy, we have to invest in early childhood
education.
Before 2010, I used to be an Adjunct Professor at the
University of Bridgeport here in Connecticut. I had the
opportunity to teach older kids. But when I had my own kids, I
had to switch lanes and decided to teach young kids. I saw
something that needs to be done.
If we do not invest, if we do not bank in our kids, then we
are creating a problem down the line. Entrusting our kids with
what they need for the future is like doing something we call
prevention is better than cure. Everything that the kids need
at this age is very helpful because it will take down the costs
of every other thing that when we grow older we will need.
So investing in early childhood, to me, is very, very
crucial.
I want to emphasize one thing, that early childhood
education, daycare in particular, helps everybody. The
multiplier effect of me keeping that child and the mom going
out there to work will have a longer lasting benefit to the
economy as a whole. It is very important for us to realize
that.
The impact of early childhood does not only end with the
kid that we are taking care of, the parents, but it also
affects the general economy. If I do not take care of the kids,
you will not be there working.
The Senators would not be doing their job. The doctors
would not be doing their job. So the effect of that has a
multiplier effect everywhere within our economy now and in the
future.
Before the pandemic hit, it was tough being a daycare
provider. The pandemic hit us so hard. Unfortunately, we were
quarantined twice. How did that affect our program? We had to
close down. How did that affect other workers? They were unable
to go out and work for several--for about 2 weeks, if not more,
because of what was going on.
I am submitting that daycare is very, very important. Our
country has a childcare problem that needs to be resolved. If
we do not pay attention to the crisis that childcare is facing,
that problem is going to multiply down the line. If we are
growing the next generations of presidents, CEOs, engineers,
and doctors, we need to give them what they need at this age
because this age is the time that we build the foundation.
If we fail to build the foundation properly, then what we
are leaving out there will be disastrous. It is easier to
repair the structure up there and it is very difficult and
costly to repair the foundation. Childcare, education, we build
the foundation. We build the brains of the kids that we care
for and we need to be reward as such.
We do not only build the brains of the kids that we take
care of, we do much more than that. We listen to their parents
when they share their challenges back at home, when they share
their challenges back at work. We have all of this going on
within our daycare program and the remunerations we get are far
less than what we put out there in terms of services, in terms
of the quality, and our skills.
So I am proposing that we pass this bill to be able to fund
childcare programs.
Thank you.
Senator Warren. Thank you, Ms. Ngoh. I very much appreciate
your being here.
Ms. Greszler, you are now recognized by Webex for 5
minutes.
STATEMENT OF RACHEL GRESZLER, RESEARCH FELLOW IN ECONOMICS,
BUDGET AND ENTITLEMENTS, THE HERITAGE FOUNDATION
Ms. Greszler. Good afternoon, and thank you for the
opportunity to be here today.
As a wife and a mom of six young kids ranging in age from 3
to 12, I have spent the last 13 years navigating the same thing
that millions of parents have done and facing the decisions to
determine what work and childcare is best for them.
If there is one thing that I have learned, it is that there
is no single work-family balance nor childcare setting that is
best for everyone. These decisions are not easy and I know I
continually question whether we are doing the right thing. Only
through the ability to carve my own pathway and achieve a
flexible balance have I become more comfortable and confident
in the choices that we have made.
Families need to be free to pursue what is best for them
and not what politicians, Government programs, or societal
norms tell them to do. I am actually optimistic that the
changes brought on by the pandemic could benefit families
through more flexible and accommodating work options.
Women have already overcome what were initially
disproportionate employment impacts and a recent study actually
found that childcare struggles is no longer weighing on
employment declines. That means that heavily subsidized
childcare and universal pre-K will not solve the current
employment problems. But they would push more parents into the
workforce. And that is one of their goals, to prevent parents
from having to give up income in order to stay home with kids.
Allegedly, Government programs are great for kids,
producing seven for one returns. But are politicians really
telling me that my children's future value to society will be
multitudes higher if other people pay for my children to attend
full-time Government directed childcare and if I or my husband
give up some income to stay home with them, or if we choose any
other combination of non-Government childcare?
It is wrong to discount the enormous value of parents
investing time in their children. And moreover, there is
actually zero evidence that large scale Government programs
could mimic the high returns of tiny boutique programs that
serve disadvantaged children a half century ago.
Present day programs like Head Start and Tennessee's
voluntary pre-K program have provided little or no lasting
gains and they have had some consequences. Moreover, only 18
percent of families prefer to have both parents working and
their kids attending paid childcare. And those families are
disproportionately wealthy and affluent.
Nudging families away from their preferences could
backfire, as Quebec $5 per day subsidized childcare program
showed. It did increase work among young moms and it shifted a
lot of kids from family care to Government care. But
researchers found striking evidence that children's health and
behaviors were worse off. They had higher crime rates as
teenagers, and families experienced more hostility and less
consistent parenting.
There is also the reality that Government childcare will
drive up costs and limit choices. Requirements like extremely
low child-to-teacher ratios and college degrees for childcare
providers are a big reason behind D.C. $43,000 price tag for
two kids attending childcare.
Small family and religious providers are usually less
expensive and more flexible but Government subsidies and
directives could actually crowd them out. Already, onerous
Government regulations contributed to a 52 percent decline in
the number of small family providers since 2005.
And while childcare is inherently expensive, there are ways
that policymakers can help families obtain the care they need
at a cost they can afford. My written testimony provides more
details but some helpful actions include letting families keep
more of their own money. Reducing regulations that do not
contribute to improved quality and safety. Giving parents more
choices with the public childcare programs that are out there.
Eliminating barriers to employer-provided childcare. Letting
workers choose to be independent workers. And enabling more
flexible childcare settings.
For example, Head Start costs as much as full-time
childcare but often only provides half as many hours. Families
should be able to take that money to a provider that works
better for them.
If I watch my friend's kids one afternoon per week, I
should not have to convert my home into a licensed childcare
facility. If a couple of moms want to form a co-op, they should
not have to become employees and employers of one another.
And daycare should not have to throw out expensive
materials when a simple duct tape fix would do the trick. But
apparently duct tape harbors germs so it is not allowed.
Caring for children is something that humans have done
since the dawn of time. And childcare is not unique to COVID-19
or even to 21st century America. But as more Americans desire
increasingly flexible work, easing childcare restrictions could
help more families meet their desires.
The solution to a more equitable economy is to empower
parents instead of politicians to make the choices that are
best for them.
Thank you.
Senator Smith [presiding]. Thank you very much, and we will
now hear from Ms. Abby McCloskey, who will be joining us via
Webex.
STATEMENT OF ABBY M. MCCLOSKEY, FOUNDER AND PRINCIPAL,
MCCLOSKEY POLICY LLC
Ms. McCloskey. Thank you, Senator.
Chair Warren, Ranking Member Kennedy, and members of the
Committee, thank you for the opportunity to testify today.
The nature of work and family has changed significantly in
recent decades. The majority of parents of young children are
now in the labor force, and mothers are the primary breadwinner
in 40 percent of families. This has created tensions around
work and care that both the Government and markets have failed
to adequately address.
Most recently, the COVID-19 pandemic revealed just how
intertwined care is with the economy, providing a unique
opportunity to rethink the childcare landscape. As policymakers
weigh new reforms, I would like to put forward five principles
to target our childcare investment.
Number one, the benefits of early childhood programs are
most pronounced for disadvantaged families. We should focus our
efforts here. Nobel Prize winning economist James Heckman has
found a 7 to 13 percent annual return on early childhood
development programs for disadvantaged children. Moreover, the
children of those who attended such programs also have
exhibited improved economic outcomes. This suggests that
targeted investment in early childhood care could improve
intergenerational upward mobility for at-risk communities.
In contrast, research on broader programs such as universal
childcare and universal pre-K is mixed, with some studies
showing positive effects and other showing fading or negative
ones. More research is needed before justifying universal
programs.
Number two, we should increase parents' choices for care
providers. Childcare needs and values vary widely. As such,
policymakers should seek to create more options for care,
rather than one-size-fits-all public programs. This could be
done through the existing Child and Dependent Care Tax Credit
which, in essence, is a school choice program for early
childhood care. Parents can use the credit to send their
children to center-based care, in-home care, a church program,
preschool, a language program, all of which could be full-time,
part-time, or something in between.
This would allow for proliferation of different kinds of
care providers in response to what parents want instead of in
response to what Washington wants. Making the credit refundable
would benefit low-income households for whom childcare is a
barrier to work and high-quality care options are most out of
reach.
Number three, we need to account for existing programs and
make sure that new spending is paid for. The Federal debt is at
historic levels and that is before any infrastructure package.
We must be judicious with our spending priorities and pay-fors.
We are not starting from scratch in the childcare space. New
programs should seek to rationalize existing landscape of
Government programs and subsidies to reduce waste and overlap.
Additionally, new programs should be accompanied by a
review of existing spending instead of relying wholly on higher
taxes. This spending review should be comprehensive and not
limited to existing childcare programs. This is because in the
next decade, Federal spending on adults over the age of 65 will
grow to more than half of all spending, while the share of
spending on children will shrink to 7 percent.
Number four, we should make it easier for parents to spend
time with infants. While much of the discussion on childcare
focuses on care outside the home, care inside the home from
parents if vitally important. Yet, the status quo makes it very
difficult for parents to spend this critical time with their
children even in the early weeks of life. One study has found
that one in four women return to work within 2 weeks of giving
birth.
A Federal paid parental leave policy would change this and
is associated with reduced rates of neonatal fatalities,
increased involvement from fathers, and higher wages and
reduced reliance on welfare for mothers. Unlike broader paid
leave packages, its cost is modest and contained. Boosting
wages for parents through economic growth and Earned Income Tax
Credit also would provide more flexibility to be at home if
that is what they chose to do.
Number five, we should seek to bring down the costs of
care. One contributor to high childcare costs is the decline in
the supply of providers and, in particular, in-home providers.
This is, in part, due to burdensome regulation. A care package
should include Federal incentives for States to review and
streamline their childcare regulations wherever possible. We
should seek to increase the number of care providers and
opportunities for their career advancement in a way that is
sustainable.
For example, multiple States have begun to implement
apprenticeship programs for early childhood educators,
providing them for opportunities for increased skills and
higher pay. These efforts have been supported by the Trump
White House, by the Center for American Program, and by the
Bipartisan Policy Center. We should seek to expand these
efforts.
Having worked with leaders across the political spectrum in
my career, I am convinced that there are targeted reforms that
would deliver significant benefits for American families and to
the economy.
Thank you for the opportunity to testify and I look forward
to our discussion.
Senator Smith. Thank you, very much.
I want to thank all of our panelists for your testimony and
I am going to now recognize myself for 5 minutes of questioning
while Senator Warren is voting.
So I start from the place that childcare is a family and an
economic imperative. And I think that today's hearing is so
important, and I thank my great colleague Chair Warren for
holding it. Because I do not think our economy will work, nor
will it return to normal, if we do not have safe, high-quality
childcare and early education options. And I think that we know
that high-quality early education closes opportunity gaps for
children. This is what we know.
This is, of course, as several of you have pointed out,
this is about equity for children and families.
I have learned from speaking with childcare providers and
early education providers across the gamut in Minnesota that
the whole business model for childcare and early learning in
our country is just not working. It is not working for
families, for businesses, for providers themselves who often
describe this work as a labor of love and certainly not the
place where they are making a lot of money. And it is not
working for the vast majority of the providers themselves who,
as has been pointed out, are most often women and women of
color.
So let me just ask a couple of questions on this topic. I
am going to start with Ms. Goss Graves, if I may. You
mentioned, in your testimony, that childcare is infrastructure.
And this, of course, the word infrastructure has been thrown
around a lot over the last couple of months here in Washington.
I have joined Chair Warren and several of my colleagues in
urging big investments in childcare because I agree that
childcare is the work that makes all other work possible.
But could you just say a little bit more, Ms. Goss Graves,
about what does it mean to you when you say that childcare is
infrastructure? And what do you say to those who say that
infrastructure is really just about roads and bridges and
broadband? Not that that is not important, too.
Ms. Goss Graves. I actually think when you think about
roads infrastructure, broadband, you understand why childcare
is infrastructure. Childcare is the care and the work that
makes all other work possible. It is something that connects
families with jobs. And it is the work that ensures that entire
sectors can actually work.
And one of the reasons it was so fragile going into the
pandemic and we watched it basically collapse is because we
have been treating it too much like an individual problem. But
if we actually invest over the long term like it is
infrastructure, like it is a public good foundational for our
economy and our families, then we have an opportunity for
something very difficult going forward.
Senator Smith. I think the infrastructure word sometimes
sounds kind of hard and impersonal but it gets, in my mind,
exactly at what you are talking about which is the fundamental
pieces that we need in place for families to work, for
businesses to work, for our economy to work.
And I will tell you, this is what I hear also from business
owners in Minnesota, especially in many rural parts of my
State, where there is such a shortage of childcare and
therefore a real challenge with fathers and mothers being able
to work. And to be clear, they work because they have to work,
because that is how they pay the bills.
Let me ask a question, if I could, of Professor Stevenson.
In February of 2021, the Minneapolis Fed reported that labor
force participation among moms of young children had dropped 11
percent due to the pandemic. And what the Fed found was that
early on moms and dads left the workforce to care for their
kids at home at roughly equal levels. But while nearly all dads
went back to work, too often moms were not able to.
So Dr. Stevenson, could I ask you what does it mean for our
economy and for our society in general when women are pushed
out of the labor force because of a lack of access to
childcare?
Ms. Stevenson. Yes, thank you for that question.
We know that a lot of women were pushed to make a choice
that is different than what they would have made because they
did not have any other options.
Women have been getting more education than men and have
closed experience gaps with men. What this means is that they
are fundamental to our economy. They are some of our most
experienced, talented workers. And when they stay home, we lose
that. They lose the opportunity to have their career continue
to develop.
One of my biggest concerns is that even as their children
grow, we will have a hard time reintegrating women back into
the labor force.
If you look since the last recession, the 2008 recession,
two-thirds of the job growth went to women. So women have been
driving--if you think back to that, what we called sort of the
miracle 10 years of growth where month-after-month employers
tired to hire more people, and we though ultimately they are
going to run out of people, right? That is why the Fed started
to pull back to early. But women responded to the call and they
entered the labor force at higher rates.
The Kansas City Fed also found that women led the
resurgence in prime age labor force that occurred between 2015
and 2019. So if you think about where we were in 2019, if we
had women stay back, if they had not led that growth, we would
not have had much of the growth we had between 2015 and 2019.
To put that in perspective, what a lot of people talk
about, was it the tax cuts? Was it regulation? What helped us
grow between 2010 and 2019? It was women.
Senator Smith. Thank you very much.
I am over my time but I am going to ask one more question
to give Senator Warnock a chance to get settled in before I
turn to him.
I would like to ask a question of Ms. Ngoh, if I may.
I really appreciate you sharing your experience. I so value
hearing from people are doing the work on the ground, as you
are. And I am so amazed how you can organize your effort for 24
hours a day. That is incredible.
I have introduced legislation called the Child Care Supply
Improvement Act, which is specifically designed to help smaller
childcare providers. I am very excited about this legislation
and I am glad to have the support of Senators Warren and Wyden
and Brown and Casey.
What the bill would do is to permanently increase annual
funding for the Child Care Entitlement to States to $10 billion
and also invest $5 billion per year to help improve childcare
supply and quality and affordability.
So Ms. Ngoh, could you just take a minute to tell us,
before I turn to Senator Warnock, when you were starting up
your organization, what obstacles did you face getting started?
And how can we help people like you, who are interested in
doing this work, how can we help you better get started?
Ms. Ngoh. When I was starting my business, I faced a lot of
obstacles, not limited to what I am going to say. No trainings,
I needed trainings to be more able to reach out to meet the
needs of the kids. I needed equipment. I needed help with
licensing. How can I get licensed? And how can I get support
for that to be done? I needed some type of grants to be able to
buy some of the basic tools and equipment and toys that I need
for my daycare.
I needed help with trying to make my premises helpful? For
example, if I had lead in the house, I was told they had to
come and check if you had lead in the house. And that is so
much money for that to be done.
You want to be sure that plumbing is good, lighting is
good. You want to be sure that everything that regulation
requires, you meet it. If you do not meet the standards stated
by licensing, then you cannot start your daycare program. What
we will need is funding to help us with that.
So those obstacles were there, but I see great improvement
with all these programs. Thank you.
Senator Smith. Thank you so much, I so appreciate it.
I am going to hand the gavel back to Senator Warren so I
can go vote, and I believe Senator Warnock might be next.
Chair Warren [presiding]. Thank you, very much.
Thank you, Senator Smith. I appreciate your taking over the
duties of the presiding officer.
Senator Warnock, you are recognized to ask your questions.
Senator Warnock. Thank you so much, Chair Warren, for
organizing this conversation about childcare and equitable
postpandemic economies.
Even both the coronavirus pandemic, the childcare industry
faced unique challenges. Childcare was not affordable for many
families. At the same time, childcare workers were underpaid.
In 2020, childcare work ranked among the bottom 2 percent
by salary before the pandemic, with educators with all of their
training making just over $12 an hour. In Georgia, workers in
unsubsidized centers earned an average of $10.14 an hour.
People who were taking care of our children and educating them.
These challenges disproportionately affect women,
particularly Black and Brown women, who make up the bulk of the
childcare workforce. During the pandemic, childcare providers
faced record low enrollment, forcing providers to reduce costs
by paying even lower wages or laying off the staff.
Ms. Graves, can you talk about the importance of paying
early educators, who are educating our children during that
critical time of brain development, a livable wage and the
impact that this will have on our ability to fill these
critical jobs with well-qualified people?
Ms. Goss Graves. So thank you, Senator Warnock, for that
question.
I think it is one of our Nation's travesties, the wages
that childcare workers are paid. And what it means is that we
are fixing the problem of childcare by basically making a
largely Black and Brown women workforce bear the brunt and the
cost of it.
The solution really is to pay them parity to what we
already pay elementary kindergarten teachers. So we already
know and have an understanding of what it looks like to pay
them fairly. And we are all hurting from it. It is not just the
workers and their families. We are all hurting from it because
it means that that workforce is less stable. And as there is a
surge of people trying to return to work and needing more
childcare, they are struggling to have enough workers who are
willing to work there for poverty wages when there may be an
opportunity to work for a few dollars an hour more somewhere
else.
Senator Warnock. Right.
And Ms. Ngoh, in your experience as an unsubsidized
childcare provider, what would Federal investments in childcare
do for your center? How would that improve the service you
offer to children? The kind of talent you are able to attract?
And the support you can provide for these families?
Ms. Ngoh. Thank you so much.
Childcare is very important in our community. What I am
looking at is what is childcare? And maybe, if we understand
the job we do, the job I do as a childcare provider, we will be
able to look at the remuneration and see and ask and solve the
question is that remuneration up to what we do, what we offer?
As a family childcare provider, I am building, I am
constructing the brains of kids just like infrastructure. We
build. So every single day, what are we doing? We are building
the brains of early kids, trying to make sure that by the time
they become of age they are ready.
What do we do? We support them as they grow. We support
their physical development. We support the creative
development, we support their cognitive development, we support
their social and emotional development.
We are building the foundation for the kids that will be
here tomorrow to run our Nation. We are building the foundation
for our Nation.
If we fail to build this foundation correctly, what are we
going to produce? We are going to produce leaders that are not
capable of doing the job tomorrow.
So like I indicated earlier, if we have funding, we will be
able to do our job properly. What are we going to do? We will
be able to provide them with quality education. We will be able
to help them understand the things that they need to do at this
age.
I watch kids that are between the ages of 6 weeks up to the
ages of 10. At this time, I have a child that is 18 months old.
This falls within the critical period of building the child's
brain. If I fail to do what I need to do, sometimes because of
lack of resources or because the parents cannot bring the kids
to my daycare consistently because this week they cannot afford
to pay their out-of-pocket family fees, what happens? That
child gets services that are not sustainable. It does help the
child. It does not help me. It does not help our economy.
If the Government subsidizes the family childcare program,
if they remunerate us for our skills, they remunerate us for
our time, they remunerate us for all of the things that we do,
we do not only watch the kids. We also listen to their parents,
what they struggle with.
If the Government can subsidize our programs, we will be
able to continuously provide quality education for these young
brains.
Thank you.
Senator Warnock. Thank you, Ms. Ngoh. I do not mean to
interrupt, but I am 1 minute old and I am going to beg the
Chair for 1 more minute.
You mentioned the economy, and I would like to ask Dr.
Stevenson, because I hail from the State of Georgia where the
average family pays 60 percent of their income to cover the
cost of childcare for two children. I have two children, two
small preschool children so I can think about the impact that
must have on families, 60 percent of their income to cover the
costs of two children.
Dr. Stevenson, if Congress invested what it should in high-
quality childcare, how could this actually benefit the broader
economy even for folks who do not have children? I think when
people hear subsidies, they think that this is some kind of
Government giveaway. But is there an argument to be made for
how this would actually strengthen the economy?
Ms. Stevenson. Thank you for that question.
Absolutely, because Government subsidies for childcare will
allow more families to afford high-quality early childhood
education, which is exactly what you just heard, about how it
builds brains and it makes children more productive as adults.
Research has taken a look at why so few kids get access to
high-quality childcare. There are a lot of different
arrangements out there. But what drives people's choices? It is
what they can afford.
There is research that has found that in childcare markets,
quality problems reflect not parents' desire but their ability
to afford it. Parents would spend more if they could. And in
fact, that is exactly what we see. High income parents are
spending more. They spend a lot on early childhood education,
on childcare and investing in their children. And that is
creating an inequality in adulthood that then is exacerbated
and grows and grows.
So what we need, if we want an economy that can compete on
a level playing field, that can get the most out of all our
unique individual's talents, we need to invest in all of our
children equally. And that is why subsidizing early childhood
education will accomplish that by making sure that more
children, the parents and the families of more children can
afford the high-quality investments that you have been hearing
about.
Senator Warnock. Thank you, so much. And than you, Madame
Chair.
Chair Warren. Thank you. Those were important questions.
Thank you, Senator Warnock.
Senator Reed.
Senator Reed. Thank you very much, Madame Chairman.
Ms. Graves, a follow on to the question with respect to
better pay is broader, it is collective bargaining rights. Not
just pay but the working hours, professional training, all
these things. Would that improve childcare in the country, in
your view?
Ms. Goss Graves. There is no question that the ability to
bargain, the ability to form a union and advocate collectively
could be transformative for care workers more broadly. One of
the really tough things about our long history of care work is
that they were shut out of many important parts of our labor
laws and protections.
And what you have seen in a few places is an opportunity
for care workers to come together. That happened over the last
year in California with great success, where they can bargain
collectively for wages. So that is a thing that would also
help.
But the truth of the matter is we keep coming back to the
math problem, that families really cannot afford to pay more
and workers should not have to take less or even maintain the
very low wages they are paid.
Senator Reed. Thank you.
Professor Stevenson, following on that comment by Ms.
Graves, there is a market failure here. When you have families
that cannot afford it, and yet the workers are significantly
underpaid, the market is not working. So what do we have to do,
in a couple of steps?
Ms. Stevenson. Yes, it is absolutely a market failure. And
it is very similar to the kinds of problems we have in K-12
education. If we were to ask parents to out-of-pocket pay for
100 percent of their children's education, what we would find
is some parents simply would not be able to afford it. And that
is--we decided long, long ago that we were going to ensure that
children got education in primary school, that all children got
access to education.
What we have learned since is actually those brain
developments start early on. And we need to be providing that
education earlier.
What an economist would say is what is the market failure?
Well, it would be great if people could borrow the money they
needed to make the investments and then pay it off over the
course of their lifetime as they earned more as adults. That is
exactly what taxes are. People should be getting invested in
through tax dollars as children. And when they go to work as
adults, they will pay it back in the taxes they pay out of
their higher earnings from those investments.
Senator Reed. Well, thank you.
By the way, thank you so much for your help on work share.
When we were developing that concept, your insights were
incredibly useful and again, thank you.
You may accept the encomium. I think that is the phrase.
Ms. Stevenson. [Nodding.]
Senator Reed. Let the record show nodding head.
Chair Warren. I got the nodding head.
Senator Reed. You got the nodding head. OK.
I just want to commend Ms. Ngoh for her great work. My time
is expiring, but thank you very much. Thank you, Madame
Chairman. Let me thank the panel, too, and I would yield back.
Chair Warren. Thank you, Senator Reed.
Senator Ossoff. Thank you so much, Madame Chair. Thank you
for convening this hearing. Thank you for your leadership on
this issue and for working families across the country.
And thank you for our panel, for joining us today and
sharing your expertise.
When I was running for the U.S. Senate and when I was
elected, it was very clear to me that Georgia families expected
change and they expected Congress to invest in them, in working
families in Georgia, in improving the quality of life,
investing in prosperity for working families in Georgia.
And as soon as we got here, I was so pleased to join
colleagues like the Chair and Senator Reverend Warnock to get
to work. And that is why I am proud to be able to announce to
the people of Georgia that because of the American Rescue Plan
Act, which we passed into law, working Georgians who as a
couple make $150,000 per year or less or as a single parent
make $112,500 a year or less, will soon start to see $300
deposited directly into their bank accounts each month for
every child they have under the age of 6 and $250 each month
for every child aged 6 to 17 years of age. This expansion of
the Child Tax Credit is so important.
And Ms. Graves, I would like to ask you, what will be the
impact of this expanded Child Tax Credit and these monthly
payments that families will see on the ability of families to
take care of their kids and also to get back into the
workforce?
Ms. Goss Graves. So, there are many parts of the American
Rescue Plan that brought me great joy, but the Child Tax Credit
and that investment in our lowest income families is one that
just made me really proud of this Congress and our country.
A big deal that 4 million families will be moved above the
poverty line. So when we think about children in this country,
that we did this in the midst of a pandemic, that responded
that with that level, of course it is really exciting.
And going forward, I think we will have learned a lesson
about what it means to ensure that no one falls off a cliff,
that our families can be secure, and that our children in
particular can grow up with that sort of safety.
Senator Ossoff. Thank you, Ms. Graves.
And with my remaining time, I would like to humbly invite
each of you, beginning with you, Ms. Greszler, to offer the one
recommendation for Congress that you think is most important
that perhaps we have not touched upon yet in this hearing
today.
Ms. Greszler. I think a lot of the solution going forward,
when we look at the economic reality of childcare, it is
expensive but we do not want workers to be paid less. This is
difficult. I would love for my kids' childcare providers to be
paid $50 per hour but then I cannot afford to pay them that any
more.
So it is a tough issue and there are limits to how much we
can make it affordable without just simply taking money from
other workers and forcing them to be the ones to pay for it.
But there are ways that we can reduce the costs that are out
there now.
And I see a big opportunity in being smaller providers,
whether it is in a church center or a friend down the street
that is at home with kids and decides to open up a childcare
center or watch a few people. I think there is both added
flexibility that could increase the number of providers, and
also reduced regulations that could bring down the costs.
We heard from Bernadette about it goes on and on and on,
but all of the things to your physical structure that have to
be done, the requirements about you can spray this antibiotic
when somebody is there and you cannot do this. You have to give
these drinks at these hours, down to the nitty-gritty.
There do not need to be that many regulations on providers,
because that just prevents them from coming into the market.
Senator Ossoff. Thank you, Ms. Greszler.
Ms. Graves.
Ms. Goss Graves. You know, our childcare system and our
current law, the block grant, it builds in a lot of choice for
families. Some families want family friend and neighbor care,
other families want center care. That is already baked in our
system.
What is not baked in is the level of investment to ensure
that there is the supply we need, the workforce availability,
and that families can actually afford childcare that it is high
quality.
And so what I guess the thing that I am hoping to leave you
all with is that we cannot miss this moment. We cannot miss
this window, with the visibility that we have had over the last
year of what it means to have such a fragile childcare system.
Senator Ossoff. Thank you, Ms. Graves.
Thank you, Madame Chair. I yield.
Chair Warren. Thank you, very much, Senator Warnock I am
sorry, Senator Ossoff.
Senator Ossoff. We look pretty similar.
Chair Warren. It is down at that end of the dais, so it is
good to see you.
I am going to ask some questions now. I get a chance to do
this.
Even before the pandemic, half of all Americans lived in
childcare deserts, areas where there simply are not enough
licensed childcare slots to meet family needs. We all know that
COVID made this worse, forcing thousands of childcare providers
to close their doors.
For families, this means excruciating decisions. Do I spend
an hour each day driving back and forth two towns over because
that is the only place where there is an open slot? Do I depend
on neighbors or relatives who have their own lives to worry
about? Some parents are juggling it all themselves, hoping that
the baby does not start crying while they are trying to do a
job interview or do their work from home.
Lack of affordable high-quality childcare affects every
aspect of our economy. And while it got a lot worse during the
pandemic, it has been holding our economy back for decades.
So Dr. Stevenson, I was hoping maybe we could go through
some of the data on this. What happened to women's workforce
participation say from the 1970s to the 1990s, through the
1990s?
Ms. Stevenson. So, between the 1970s and the late 1990s,
women's labor force participation grew quite rapidly, going
from 43 percent of women participating in 1970 to a peak of 60
percent in 1999.
Chair Warren. OK, so let us break this apart into pieces.
So we have this sharply upwards slope. Did that trend continue?
Ms. Stevenson. That trend did not continue. In fact, it
flattened out and we saw women's labor force participation
growth completely stall out, decline slightly, and then decline
a lot in the 2008 recession although, as I mentioned
previously, we saw a real resurgence in that participation rate
starting around 2015.
But it is also important to realize that male participation
fell much faster than female participation.
Chair Warren. So we have women's participation goes up
sharply in the 70s, the 80s, and the 90s. It flattens in about
2000. Is that what happened in our peer countries, like Canada?
Did they see that same pattern of rise and then flattening?
Ms. Stevenson. No. In fact, the U.S. really led the world
with the rapid rise in the 70s and 80s and the rest of the
world started catching up. And then, the rest of the world
added more sort of workplace supports for working families.
They added workplace flexibility, subsidized high-quality
childcare, paid parental leave. We saw female participation
continue to rise in other OECD countries.
And the result has been that the U.S. went from near the
top of OECD countries, in terms of female labor force
participation, to really around the bottom among 22 OECD, the
more developed countries.
Chair Warren. All right. So our peer countries kept growing
female labor force participation and creating more support for
them, more family friendly policies, more childcare support and
so on. The United States did not and we saw a flattening of
women's labor force participation. What did that flattening of
women's labor force participation mean for America's GDP?
Ms. Stevenson. Well, I think the best way to see that is
actually look and see what did it mean in the 1970s, 1980s, and
1990s. The U.S. prepandemic economy was roughly 15 percent
larger than it would have been if women were employed at the
same rate and worked the same number of hours that they did in
1970s. So then, think about we got 15 percent more GDP because
of the growth in the 70s, 80s, and 90s. And then it stopped.
So there are lots of estimates over how much bigger our GDP
would have been if in the 2000s and the 2010s women had
continued working. Do we--you know, if you go up toward, if you
think about us adding the kinds of policies that other OECD
countries would have added, some estimates suggest that female
labor force participation would have been about 6 percentage
points higher. And if you think about something like that, that
is certainly more economic growth than something like tax cuts
for corporations have ever generated.
Chair Warren. All right. And I understand that McKinsey put
out a report in which they put a dollar estimate on what would
have happened, how much bigger our economy would have been if
female labor force participation had continued. Are you
familiar with that report? Do you remember the dollar figure on
that?
Ms. Stevenson. Yes, I am. You know, McKinsey has taken a
look at, first of all, the entire globe and come up with really
an enormous estimate. But my understanding is their estimate
for the United States is $1.5 trillion increase in GDP if we
had had that kind of continued growth in female labor force
participation.
Chair Warren. And I take it, just let me ask in your expert
opinion, if we had universal childcare, do you think that would
have had an impact on women's labor force participation?
Ms. Stevenson. I absolutely do. A lot of women literally
pay to work. In other words, what they spend on childcare is
more than what they are bringing home after taxes. The reason
they pay to work is because they know if they lose their
foothold in the labor force, they are going to have an even
harder time getting it back. But many women look at the idea of
paying to work, being away from their children, and brining
home no financial benefits for their family as a result, and
think this is not a sacrifice I want to make.
Chair Warren. I really appreciate this. You know, without
childcare, millions of mothers just cannot work. And holding
these women out of the workforce harms them, it harms their
families, but it also harms our whole economy.
This is what it means to say that childcare is
infrastructure. It is part of the basic support we need so that
everyone gets an opportunity to work and our economy is
productive.
This is our moment to act. You raised this point earlier,
Ms. Goss Graves. The President has proposed a major expansion
of childcare and early childhood education. And when Congress
acts on infrastructure, childcare is not going to be left
behind.
So let me ask you, what size Federal investment do you
believe is needed to provide quality affordable childcare to
every family that needs it?
Ms. Goss Graves. So, we think we need an investment of $700
billion. At that level, we can ensure that families do not have
to pay more than 7 percent of their income for childcare. At
that level, we can ensure that childcare providers are actually
paid wages that are dignity wages, akin to kindergarten
teachers. And at that level, we can increase the supply so that
we do not have this challenge of the childcare deserts that are
especially a problem in rural areas, and that there will be
more supply in terms of facilities but actually more workforce
supply.
Chair Warren. Well, I could not agree more. Just yesterday,
I sent a letter to Congressional leadership with the support of
over 100 of my colleagues, calling for a $700 billion
investment in childcare.
So let me ask you, Ms. Goss Graves, some in Congress have
argued that we should focus just on roads and bridges and then
come back to a discussion about childcare later, if ever. What
would be the impact on women if we leave childcare behind in
our infrastructure package?
Ms. Goss Graves. I just think that we do not have that
choice. We cannot let women who have lost so many jobs in this
economy, who have held together their families in this economy
with work that is both invisible and barely made visible and
certainly underpaid in this period. People are counting on
Congress to deliver on childcare.
And that is a short-term solution but it is a long-term
solution, too. It goes to their long-term economic security,
their ability to retire with dignity.
Chair Warren. I really appreciate your testimony here. You
know, I support investing in our roads and bridges and
broadband internet. It is all important. But we have to invest
in the kind of infrastructure that women need, as well.
As a young mother, I had a terrible time finding quality
affordable childcare and twice I nearly quit school, I nearly
lost my job because I could not manage childcare. If we do not
get this time, my granddaughter is going to face the same kind
of problem I faced, and that is simply wrong. We cannot let
that happen. The infrastructure train is leaving the station
and we cannot leave childcare behind.
So let me, if I can, I am going to do a second round of
questions here.
I want to talk about another aspect of childcare that many
of you have raised today, and I appreciate your raising it. We
have two very different systems in our country for teaching our
little ones. For five and 6-year-olds, of course, and for older
kids, we have public schools. No matter where you live, no
matter how much money you make, no matter whether you have a
job, you can send your public schools to learn. And you can do
it for free.
Now why did public schools start at the age of five or six?
Well, mostly because back then nobody thought children could
learn anything earlier than that. And now, of course, we know
that is not true, that early childhood experiences affect
whether a child is ready for first grade. But they also affect
that child all the way throughout childhood and into adulthood.
For example, high-quality early childhood education is
linked to better health in adulthood and reduced odds of
substance abuse or arrest. Many experts point out that when we
spend a nickel on our smallest learners, we save dollars down
the line.
But for the littlest kids, parents are on their own. Do not
have an extra $10,000 or $15,000 a year to send your child to a
high-quality early childhood program? Then you get to juggle
between friends and relatives, or maybe just leave your job
because childcare costs more than you can earn.
Dr. Stevenson, let me ask you, do these two separate
systems make sense, given what the evidence says about the
benefits of high-quality early care and high-quality early
education for our children?
Ms. Stevenson. I believe if we were designing our education
system today from scratch, we would absolutely be emphasizing
early learning as a critical part of that education system. As
you said, we did not know back when we designed our education
system that so much learning happens in the first 5 years. We
now know that really does form the foundation upon which people
develop and grow.
But I really want to tie this back to in the last century,
our economic growth was completely driven by the fact that we
educated workers more than any other country in the world. We
are now not educating our citizens more than any other country
in the world. We are behind on early childhood education. We
are also behind on universities.
And this failure to invest in people, it is ultimately
going to hold our economy back.
Chair Warren. So, I think the evidence is clear here that
you are citing that high-quality care helps all of our children
learn and grow. That now, in addition to Head Start, we do have
a limited public program to help low-income parents get
affordable care to their kids, funded primarily through the
Child Care Development and Block Grant Program, CCDBG.
But our public childcare system works very, very
differently from our public school system. Ms. Goss Graves,
does every single parent quality for help getting childcare,
regardless of their income or work status under current law?
Ms. Goss Graves. Oh, I wish that were so. It is really only
the lowest income families that quality. And by a family
qualifying, what that means is there are many, many children
who would benefit from being in an early childhood program who
cannot because their parents are not eligible.
Chair Warren. OK, so not everyone qualifies.
Let me ask you about the people who do qualify. If you are
eligible for the program, can you just walk into a childcare
center and sign your child up?
Ms. Goss Graves. Unfortunately, it is also not that easy.
There is the work that you have to do to demonstrate that you
are eligible, which ends up serving as a barrier for a lot of
parents. On top of that, there are waiting lists. And
processing all of this can mean that parents and families, they
languish on wait lists for months.
Chair Warren. You know, we do not make parents prove that
they are working or that their income is low enough to be able
to send their child to first grade. We do not put those
children on waiting lists to get into second grade. We
understand that education is beneficial for all kinds, so we
invest in it as a country.
Early care and education should be the same. We need to
make it available for all of our babies, regardless of how much
money their parents earn or what kind of job they have. You
know, we cannot lose sight of why this matters.
Ms. Ngoh, tell me about the children in your program. How
do you see them grown and learn when they are with you?
Ms. Ngoh. I want to clarify something.
What I want to clarify is I was misunderstood. When I talk
about regulations, the question was what obstacles were there
when you wanted to start your program. And I listed some
obstacles that are there.
Having regulations in childcare is very, very important.
They are the basis of trust. Health and safety are very, very
vital in daycare.
So I should not be mistaken to say that regulations are not
required. They are required and all we need, we need to support
to help us regulate those regulations.
But parents who keep their kid with us, they need to trust
us and regulations build that trust because parents know that
their kids are in a safe place.
Thank you for that clarification.
Chair Warren. Thank you. Yes, go ahead.
Ms. Ngoh. Let me now answer your question. The kids I have
in my daycare, I have kids in my daycare now that range from
the ages of 18 months to 10 years. Those kids in my daycare
have different, different personalities. They have different
health issues. They are at different levels of development.
I have kids that are shy. I have kids that are happy. I
have kids that somehow struggle with their speech, we call them
speech delayed. We have kids that are just recovering from the
pandemic and they are in a trauma.
I have a kid--I will share two stories. One, I have a kid
that the mom was pregnant and lost the pregnancy. And when the
child was born, apparently the child lived for 1 day and died.
And that child came to daycare and all I watched the child do
was trying to pick toys and make them look sad. A child that
used to be a happy child, you see that child struggling with
feeling sadness.
I have the task, I have the job of recognizing what that
child is going through and helping that child to recover,
helping that child to deal with sadness.
Today, I have a parent in my daycare who is making a little
bit over $475 a week. She has three kids. The first child is
14, the second is 13, and the last one is 2 years old. That
parent does not drive. That parent has to push that child in a
stroller to my daycare every day and then go down straight to
the bus station to take a buss to go to work.
And sometimes you see that parent getting home tired. I am
obliged when, like yesterday, it was raining. That parent,
there was no way she is going to traipse 30 minutes under the
rain to come and pick up the child. She had to call me to find
out if I can help pick her up from the bus stop. I had to go
pick her up from the bus stop. I had to arrange for someone to
take her from my daycare to drop her and the baby. Otherwise,
they would be wet to their pants under the rain.
That parent is just one of the so many different cases we
go through on a day-to-day basis.
When you ask me, as a provider, as a parent, as a business
owner, what is the role of childcare, I am submitting that
childcare is a public service. Childcare is a public service.
Childcare should be prioritized. If we do not prioritize
childcare now, we are going to get down into what we call a big
disaster later on.
Like I earlier on indicated, the job we do is about
infrastructure, building the brains of these young kids. If we
fail to build these brains correctly, it is about teaching them
those small first--we call them magic words--thank you, no, I
am sorry. Helping them to build their personality. Helping them
to build character.
If we fail to do this, what is going to happen down the
line? These kids will be will be wayward one way or the other.
What will it need to fix the situation? If we fail at this
level, if we do not have the resources that we need to build
our young kids so that by the time they become of age they have
what it takes, character, they have the skills, they can manage
their emotions, they can integrate, they have the opportunities
to learn and strive and fly like every other child, down the
line, we are going to have more problems.
What I say is the play they do at daycare, play to me is a
factory. It is a factory where the kids learn different things.
And that is just what we are doing.
I would take one more minute to say something
Chair Warren. We are going to need to keep this short. We
are a little over here.
Ms. Ngoh. Just a last minute. The one thing that I want us
to know is that those kids that I am watching, if I do not
watch those kids, you and some of the Senators will not go to
work. If I do not sit here, if daycare providers, whether they
are family based, whether they are center-based, providers, if
they do not do this job, you will not be able to do your own
job. Other people will be affected by that.
If any morning I get up and say oh, I am feeling sick, I
cannot work today, five parents will not go to work. What is
the multiplier effect of those parents not going to work?
Chair Warren. So thank you. This is really important, and
the work you do is enormously valuable and important.
We now have decades of research showing how important these
early childhood experiences are and the children in your care
are very lucky to have you.
So we have talked about the impact of our underinvestment
in childcare on our economy. We have talked about the
importance of investing in high-quality early childhood
education on our children and long-term on our economy.
There is just one more issue I want to talk about before we
leave, and we have already alluded to it today but I want to go
back to this again.
Our Nation, for decades, has underinvested in childcare and
childcare workers are among those that have been hit hardest by
the pandemic. As of this April, the childcare industry had lost
more than 150,000 jobs. That is one in every seven jobs in the
sector. Women of color have been disproportionately hurt and
many providers are still struggling to get by.
As a society, we have not valued this work the way that we
should. In 2020, the average pay for a childcare workers was
only $12.24. That is the average. Think about how people can
make more money doing the checkout at McDonald's.
So here is the first question, and I can ask this one of
you, Ms. Ngoh. Do you think that $12 an hour accurately
reflects the value of the work you do for children and
families? I think there is going to be a one word answer here.
Ms. Ngoh. The answer is no. And I want to defend my no,
because when you pay me $1, what are you rewarding me for? You
are equating what services that are only equal to $12. If
doctors do take care of kids, they are paid so much. If
teachers, if grade three teachers do take care of kids, they
are paid so much. They are building brains.
I am handling the most delicate portion of that
developmental goal, our children. And you think that I only
deserve $12? When the same kids that I bring up to this level,
I have done the most difficult job. When I do that job, I pass
that child on to middle school, to pre-K school, they are paid
more.
Chair Warren. Yes.
Ms. Ngoh. Is that fair? I think the answer is no.
Chair Warren. So it is very important work. Let me just
ask, can you easily raise your fees so that the hourly wage
goes up?
Ms. Ngoh. How can we raise our fees easily when the parents
are struggling? I just narrated a story of this lady who makes
$475 a week with three kids. How do I raise my fees to such a
parent?
When the pandemic hit, most parents were unable to even pay
their out-of-pocket family fees. Now I had a decision to do
what? To cancel out-of-pocket fees, suspended collecting those
fees. I had too many things in my mind. If I send away these
kids, this parent that I can watch their kids for free, what
will happen when they get subsidies and later on need my
program and are able to pay?
So my first answer is no, it is not possible to just raise
fees.
Chair Warren. So you have given us the illustration of how
the childcare market is broken. The price of providing high-
quality care at fair wages is so high that many parents are
simply priced out of the market. Childcare providers cannot
offer more slots because they are worried the parents cannot
pay, which in turn creates more shortages.
So can I just ask you, Dr. Stevenson, this looks like a
market that is broken. I am going to ask you wrap up here.
What should we be thinking about to make this market work
better?
Ms. Stevenson. OK. The market is broken and it is broken
because parents cannot be paying for the investments that need
to happen when their children are young. These are things that
should be paid for over a lifetime.
And that is exactly what our policymakers, what our system
is set up to do, which is to have Congress fund these
investments in children, have our Government fund K-12, have
our Government fund early childhood education and childcare.
And then our children will grow up to be able to be more
productive, to earn more, to allow us to produce more. And that
will actually make it so that we can raise more in revenue,
more than enough to cover the cost of this.
So it is incredibly important that we provide that subsidy
and we take that burden off of parents, who desperately want to
see their children invested in.
Chair Warren. Well, thank you, Dr. Stevenson. And thank you
all who have been here today.
I think you are exactly right. We do not ask parents to pay
the full cost of first grade for their 6 or 7-year-old and we
should not ask parents to pay the full cost of educating and
caring for a 2-year-old either. And this is exactly why I am
fighting for a $700 billion investment in childcare.
After parents, childcare providers are some of children's
most important teachers. We need to transform our childcare
system to recognize the skill and the value of care workers.
Expanding quality care would mean that providers can offer fair
pay and benefits, and it would make it easier for families to
be able to find quality care.
We have this opportunity. This is our moment. We are
rebuilding America's infrastructure. And a core part of that is
making sure that we make the investment in our next generation,
in our children. We do that and that lets mothers go back to
work, and fathers go back to work now. That helps our economy
and it helps our youngest Americans.
We have to make sure that when we rebuild infrastructure in
this country that we create good middle-class jobs and that
childcare providers are not left behind.
So I want to thank all of our witnesses who are here today.
I appreciate your providing testimony.
For any Senators who wish to submit questions for the
record, those questions are due 1 week from today. That is
Wednesday, June 30th.
For our witnesses, you have 45 days to respond to any
questions.
And again, thank you all. I appreciate your being here. We
have a chance to do something important.
Thank you.
This hearing is adjourned.
[Whereupon, at 4:02 p.m., the hearing was adjourned.]
[Prepared statements and responses to written questions
supplied for the record follow:]
PREPARED STATEMENT OF FATIMA GOSS GRAVES
President and CEO, National Women's Law Center
June 23, 2021
Good afternoon Chair Warren, Ranking Member Kennedy, and other
distinguished Members of the Senate Banking, Housing, and Urban Affairs
Subcommittee on Economic Policy. My name is Fatima Goss Graves, and I
am the President and CEO of the National Women's Law Center (NWLC).
NWLC fights for gender justice--in the courts, in public policy, and in
our society--working across the issues that are central to the lives of
women and girls. We use the law in all its forms to change culture and
drive solutions to the gender inequity that shapes our society, and to
break down the barriers that harm all of us--especially women of color,
LGBTQ people, and women and families with low incomes.
I am grateful for the opportunity to testify before you today on
the childcare crisis our Nation currently faces, and the investment and
policies needed to rebuild this critical foundation of our society and
economy equitably.
America's Childcare Crisis
I want to begin by thanking lawmakers for their leadership on the
care economy and focusing on childcare in the context of relief,
recovery, job creation, and advancing racial and gender justice. We are
lucky to have Chair Warren championing this issue.
We are also eternally grateful to Congress for The American Rescue
Plan and the 2020 COVID-19 relief packages, which together provided
over $50 billion in relief funding for childcare and early learning and
helped save the childcare sector from collapse.
But make no mistake, the investment in childcare cannot end there.
The American Rescue Plan provided urgently needed relief, but it
was just that--relief. It was not designed or sufficiently funded to
address the long-term structural flaws in our economy that made the
pandemic so devastating, for women--especially women of color--and
their families.
For the childcare and early learning sector, the pandemic has laid
bare and exacerbated the deep inequities of a childcare system that
relies on families paying unaffordable sums, early educators being paid
poverty-level wages, and too many communities across the country
lacking sufficient workforce or facilities to meet childcare demands.
Since the start of the pandemic, one in eight childcare jobs has
disappeared, \1\ women have lost a net 4.2 million jobs,\2\ and 1.79
million women have left the workforce entirely,\3\ with childcare
obligations likely playing a significant role. Additionally, as the
country reopens, childcare programs are facing enormous and
unprecedented staffing shortages, which means fewer slots and longer
waiting lists. This blow to the childcare industry will affect
childcare providers, parents, and children long after the health crisis
has passed.
---------------------------------------------------------------------------
\1\ Claire Ewing-Nelson and Julie Vogtman, National Women's Law
Center, ``One in Eight Child Care Jobs Have Been Lost Since the Start
of the Pandemic'' (June 2010), https://nwlc.org/resources/sector-
report-child-careworkers/.
---------------------------------------------------------------------------
The United States has not had a comprehensive childcare and early
education system since a brief period during World War II. Since then,
American families have been largely left on their own to fend for
themselves, relying on the underpaid labor of Black, Latinx,
Indigenous, and immigrant women so that others can work, and the time
of older siblings to cover the care needs of families instead of
attending to their own education.
It does not have to be this way. The pre-COVID status quo was
unsustainable and left families and our entire economy more vulnerable
to the ravages of the pandemic. We can and must do better as we recover
and rebuild. We now have a unique window of opportunity in front of us
to deliver for women and their families. To build the childcare
infrastructure that shows women we have heard their cries for help and
that we value care work--both paid and unpaid--as the backbone of our
economy.
Even before COVID-19, America faced a quiet childcare crisis.
It was frankly far too easy to bring the childcare industry to its
knees. Before anyone had heard of the coronavirus:
Families were struggling to afford childcare costs--if they could
find childcare at all.
In more than half of States, care for an infant in a
childcare center costs more than in-State college tuition,\4\
and in one study, over 80 percent of two-child families spent
more on childcare than rent.\5\ Additionally, low-income
families spend an average of 35 percent of their income on
childcare which amounts to five times what is considered
affordable.\6\
Fewer than one in seven eligible children were served by
the Child Care and Development Block Grant (CCDBG) and related
Federal childcare programs.\7\
Families--particularly in rural areas--struggled with a
lack of care options. Research has found that over half of
Americans live in a childcare desert, or a neighborhood with an
insufficient supply of licensed childcare.\8\
Early educators were paid poverty-level wages for caring for and
educating our children.
Childcare is one of the lowest-paid professions in the
United States,\9\ despite how valuable the work is, rising
requirements for credentials and education and extensive
research pointing to the of the early years for young
children's healthy development.\10\
Wages for providers average less than $12 per hour,\11\
about half of programs do not offer health benefits, and recent
data show that over half of childcare providers were enrolled
in at least one public assistance or support program.\12\
These inequities disproportionately impact women and families of
color.
Virtually all childcare providers (over 90 percent) are
women, and disproportionately women of color and immigrant
women.\13\
Black and Latinx mothers are more likely to work in jobs
with low pay and few or no benefits, making care more difficult
to afford.\14\
In addition, Black, Indigenous, People of Color (BIPOC)
families are more likely to face more significant barriers to
accessing care,\15\ including high costs, lack of care options
that match their work schedules, language barriers, and lack of
culturally competent, trusted options, all leading to
inequitable participation in licensed childcare across racial
groups.
In short, the pre-COVID status quo was unsustainable and left
families and our entire economy more vulnerable to the ravages of the
pandemic. We can and must do better.
As we recover, we are entering a new struggle in childcare.
Childcare programs have been faced with unpredictable demand
throughout the pandemic. While most of the economy was closed during
the first phase of the pandemic, many providers struggled to keep their
doors open to serve frontline workers or to stay open amid declining
enrollment and increased operating costs.\16\ Two in five providers
report taking on debt for their programs using personal credit cards to
pay for increased costs and three in five work in programs that have
reduced expenses through layoffs, furloughs, or pay cuts.\17\ However,
as parents increasingly transition out of remote work, programs are
dealing with a surge of demand and are unable to find and retain their
childcare workforce. The potential impacts include a lack of stability
for children in care and immense burdens on parents, including job
loss.
As a Pennsylvania childcare program executive director pointedly
noted in a local paper, if you are a childcare worker making only $11
an hour, but the local grocery store is paying $14 an hour, that is
where workers are going to seek employment.\18\ Another director said
she sees fast-food restaurants incentivizing new workers through sign-
on bonuses when she cannot offer much over minimum wage let alone
benefits.\19\
Elliot Haspel, a childcare scholar, recently noted in the
Washington Post that it is not just childcare for young children that
is disappearing. He also cited a public school in Michigan that was
forced to end its program that provided before- and after-school care
for the upcoming school year due to staffing shortages.\20\ According
to analysis by the Center for Law and Social Policy (CLASP), only one
in four children who want to be in an after-school program are
currently enrolled.\21\ Black and Latinx families are even more
interested in participating in such programs,\22\ but these programs
are increasingly hard to find.
And a childcare shortage means fewer high-quality options for
children and greater barriers for parents--especially mothers--to
enter, stay in, and advance in the labor force.
Federal relief dollars for childcare cannot fully address the
workforce crisis.
While the relief money is in the process of helping to stabilize
programs in creative ways such as allowing temporary signing bonuses,
as well as expanding services to parents that work nontraditional
hours, children with disabilities, and those living in childcare
deserts, it is not a sufficient or sustained investment to raise wages
or provide benefits. The infusion of funds is short term with States
having to spend all relief stabilization grants by September 2023 and
their CCDBG supplemental by 2024. Building up high-quality childcare
supply is about more than investing in facilities--it means attracting
and retaining a highly qualified workforce to ensure sufficient slots
for enrollment. And doing that requires long-term investments in
building a system that values childcare workers.
Why Does This Matter?
We need reliable, affordable, high-quality care so that parents--
and mostly women--can get and keep jobs. Before the pandemic, in
February 2020, we celebrated women comprising over half the
workforce.\23\ Fast forward to today, and 1.79 million women have left
the workforce entirely since the start of the pandemic,\24\ in large
part due to caregiving responsibilities. Analysis by the National
Women's Law Center underscores that ``Before the pandemic, women's
labor force participation rate had not been this low since 1988.''\25\
Lack of access to affordable, high-quality childcare is an
important piece of the puzzle. Last month, the Federal Reserve in
Minnesota released a study showing that in the last quarter of 2020,
childcare was still a big barrier to parents' participation in the
workforce. Nearly a quarter of all parents were either working less or
not working at all because of disruption in care and schooling for
their children.\26\ The study also underlined the disproportionate
effect on mothers who are being prevented from full participation in
the workforce, and even more severe labor force impacts for Black,
Latinx, single mothers, and those with low incomes.\27\
A recent survey of families with children age birth to five found
that since the pandemic, more than one in three female caregivers had
to leave the workforce or reduce their work hours/responsibilities.\28\
Of the women who had to stop working, over 80 percent said it was due
to financial constraint.\29\ The shares of women who were more likely
to indicate these changes in workforce participation were higher for
Black and Latinx women.\30\
While these numbers are cause for alarm, in fact it is more
surprising that we are not seeing a larger reduction in labor force
participation. Throughout history, mothers have always found
workarounds--accepting a lower paying job because it offered more
flexibility, putting off educational opportunities, foregoing other
necessities because the cost of childcare ate up a third of their
income, working themselves to the bone to try and balance breadwinning
and caregiving. Additional childcare workarounds became commonplace for
parents during the pandemic, including but not limited to: piecing
available care together weekly or even daily depending on schedule and
who is available; working full-time while caregiving full-time; finding
creative caresharing responsibility arrangements (neighbors, friends,
grandparents, pods, alternating work schedules, etc.); working all
hours of the day and night to care for children during waking hours;
and, all at the expense of parents' free time and mental health.
But these sacrifices also bring a cost: in opportunities foregone,
stress intensified, a bottled-up primal scream that was finally
released during the pandemic as these issues can to a head. These
mothers know that without bold and urgent action, we are setting them--
and the families who depend on them--up for a lifetime of economic
insecurity and stress.
The first years of a child's life are critical to their long-term
development.
As parents desperately seek childcare slots, we risk not only
undermining parental employment and economic growth but also children's
long-term development.
The science is clear: developmental disparities take root well
before children are 5 years old, and families' economic instability and
stress--which have intensified during the pandemic--are associated with
adverse outcomes in terms of health and educational achievement.\31\
Luckily, the inverse is also true. When we invest in children
starting at birth, it yields long-term positive outcomes for health,
education, and employment.\32\ Since children under 5 years old are the
most diverse generation in American history, investing in high-quality,
affordable childcare and early learning also advances racial
equity.\33\
Investing in higher wages and benefits for childcare providers
leads to higher quality care for children since attracting and
retaining caring, consistent providers supports healthy child
development. Quality childcare programs have been associated with
positive health benefits, including higher immunization rates,
screening and identification rates; improved mental health; and reduced
smoking.\34\ In addition, childcare plays a vital role in supporting
parental employment, which matters for children because family economic
security positively impacts children's healthy development. Stabilizing
the childcare sector and rebuilding a more equitable system is a
crucial investment in our youngest children.
What Does an Equitable Childcare System Look Like?
Ensuring no family pays more than 7 percent of their income
on childcare. The U.S. Department of Health and Human Services
(HHS) recommends that childcare be considered affordable if
family out-of-pocket costs are equivalent to 7 percent or less
of total household income.\35\
Paying childcare providers like similarly qualified
elementary school teachers. From birth to age 3, children's
brains are making more than a million neural connections per
second, influenced greatly by their interactions with their
caregivers.\36\ Childcare workers should be fairly compensated
for the valuable and complex work of supporting this
development.
Building the supply of available childcare so every family
can find the childcare that meets their unique needs. A
family's zip code should not determine their available
childcare options.
There are current proposals in Congress that would help us achieve
the equitable childcare system I just described, covering children from
birth until they are age 13. We thank Chair Warren for her leadership
in introducing strong pieces of legislation, including the Universal
Child Care and Early Learning Act, which focuses on increasing
compensation for providers, limiting family copays to 7 percent of
family income, and building the supply of care. A complementary bill
was recently introduced by Senator Wyden with Chair Warren that invests
in rebuilding childcare infrastructure and provides additional
mandatory funding. We are also supportive of Senator Murray's Child
Care for Working Families Act which also has these principles. We
estimate the need at $700 billion over 10 years to build this system.
Such a bold and robust investment would create 2.3 million good-
paying jobs\37\--a combination of jobs with better compensation for
early educators and a necessary support for parents' workforce
participation.
The investment would also enable parents--especially mothers--to
participate in the labor force and have greater financial security.
NWLC has a new study out together with Columbia University's Center
on Poverty and Social Policy that shows that public investments to
guarantee high-quality, affordable childcare for all would increase the
number of women with young children working full-time by about 17
percent and by about 31 percent for women without any college
degree.\38\ Women with less than a college degree and lower incomes
would experience the most significant relative economic gains, mostly
from being able to enter the workforce.\39\ Additionally, Black and
Latinx women, who already face compounding labor market discrimination,
lower wages, and more difficulty finding childcare, would experience
larger percent increases in their incomes.\40\ A strong investment in
childcare is good for the economy as a whole.
Childcare programs cannot compete for workers like other sectors of
our economy and need.
Childcare programs can attract the workers they need so working
parents can find and rely on the care they need Federal support to
attract and retain the workforce. A recent study on teacher turnover in
early childhood using statewide data in Louisiana showed that even
prepandemic more than one third of teachers leave their program one
year to the next, and of those, the considerable majority are not
teaching in another program the following year.\41\ However, positions
in the K-12 system where teachers receive better wages and benefits,
have only a 16 percent turnover rate, and of those, half are merely
changing schools rather than leaving the profession entirely.\42\ We
must invest in raising providers' wages to build the supply of
childcare for working parents.
The investment will advance gender and racial equity:
The disproportionately Black, Latinx, Indigenous, Asian American
and Pacific Islander, and immigrant women who work in childcare and
early education deserve better jobs and working conditions.
Our Nation's children, nearly half of whom are children of color,
deserve investments in their care and education from birth to age
13.\43\
Mothers deserve childcare they can depend on.\44\ Access to high-
quality, affordable childcare is especially important for Black mothers
who are more likely than other mothers to be in the workforce and to be
their family's primary breadwinner.
Overall, these investments would transform women's earning
capabilities and retirement security.
Over the entire life course, access to affordable care could
increase the lifetime earnings for women with two children by about
$94,000, which would lead to an increase of about $20,000 in private
savings and an additional $10,000 in Social Security benefits. It would
also boost the collective lifetime earnings of a cohort of 1.3 million
women by $130 billion. By retirement age, access to affordable, high-
quality childcare would mean that women with two children would have
about $160 per month in additional cash flow from increased private
savings and Social Security benefits. This policy would also advance
racial equity and help close racial earnings and wealth gaps. Black and
Latinx women see additional lifetime Social Security benefits of
$13,000 and $12,000, respectively (compared to $8,000 for white
women).\45\
Conclusion
Childcare is infrastructure. It connects workers and jobs. It makes
all other work possible. It supports the positive growth and
development of our Nation's children. Without a childcare system that
works for every family, our economy will suffer in the short and long
term. Therefore, it must be a key facet of our national economic
infrastructure.
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______
PREPARED STATEMENT OF BETSEY STEVENSON
Professor of Public Policy and Economics, Gerald R. Ford School of
Public Policy
June 23, 2021
Chair Warren, Ranking Member Kennedy, and distinguished Members of
the Subcommittee, thank you for the invitation to speak to you today
about childcare. I am an economist who has spent much of the past three
decades trying to better understand women's employment, families, and
the porous boundaries between our personal lives and our work lives.
These porous boundaries were completely shredded during the pandemic as
tens of millions of people began to work from home for the first time
along with their children who lost access to in-person school and
childcare.
My research has shown that policy choices shape the constraints
that people face and therefore their employment and family decisions.
The choices you make now about childcare will shape the U.S.
macroeconomy for decades to come by influencing who returns to work,
what types of jobs parents take, and what kinds of promotion paths
parents take. It's not just women, men's employment choices are also
shaped by access to childcare. In 2014, a survey found that 49 percent
of parents had passed up a job because it conflicted with family
obligations. \1\ The pandemic caused nearly all parents to face these
kinds of choices over the past year. In a recent survey I conducted in
conjunction with RIWI we found that childcare responsibilities during
the COVID-19 crisis impacted the employment of 59 percent of parents.
Many cut their work hours, turned down promotions, changed jobs for
more flexibility, paused training or education, and some quit jobs
entirely. These impacts were reported by men and women almost in equal
number, a fact that reflects the shift toward greater equality in the
home that has led men to increase the number of hours they spend on
primary childcare and household chores over the past several decades,
partially offsetting the decline in time women spend on those
activities. \2\ Dads are increasingly playing the role of the primary
caregiver in the household: 1 in 5 fathers are the primary caregiver of
preschool-age children when the mother is employed. \3\ In the last 30
years, the number of families with stay-at-home dads and a working mom
doubled, \4\ the number of father-only families more than doubled, and
in 2019 nearly a quarter of single parents with children under age 18
were father-only households. \5\
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\1\ Harris Poll of 4,096 U.S. adults conducted online May 27-30,
2014. Reported in ``Eleven Facts About American Families and Work'',
October 2014 Report of the Council of Economic Advisers https://
obamawhitehouse.archives.gov/sites/default/files/docs/eleven-facts-
about-family-and-work-final.pdf.
\2\ Bianchi et al. (2006); American Time Use Survey.
\3\ Survey of Income and Program Participation, 2011.
\4\ Census Table MC1 from 2019 Current Population Survey.
\5\ Census Table FM-1 from Current Population Surve.
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However, the pandemic highlighted the fact that women continue to
bear disproportionate responsibility for care giving within families
and the childcare crisis impacted women more than men in many ways.
The first factor was the nature of the recession itself. This was
our first service sector driven recession. The United States is an
economy dominated by the service sector. In February 2020, there were
131 million service sector job--86 percent of private sector jobs in
the United States. Despite this large share of jobs, in every previous
recession job loss has disproportionately occurred in the goods-
producing sector. For example, in the 2009 recession, half of all jobs
lost were lost in the goods-producing sector. In 2020, roughly 10
percent of the jobs lost were in the good-producing sector. Women work
disproportionately in the service sector and therefore the
concentration of job loss in the service sector meant that women bore
more of the job loss. Between February 2020 and May 2020, women lost 13
million jobs compared to 9 million jobs lost by men. However, over the
last several months of recovery the gap has reversed as jobs held by
women have been expanded faster than jobs held by men.
The second factor was the closing of schools and childcare. More
than two-thirds of children live in households in which all parents
work. \6\ The pandemic made salient the many roles that schools play.
While K-12 education is typically thought of as a source of education
for children and therefore investment in the next generation. It is
also a source of childcare for many families who are able to work for
pay during the roughly 6 hours that their children are being taught and
cared for by professional educators. Childcare for younger children
serves very similar functions to primary school. Early childhood
educators can improve outcomes for children by engaging in
developmentally appropriate curriculum-based activities. They also
provide crucial care for children in households in which all parents
work.
---------------------------------------------------------------------------
\6\ American Community Survey 2019 Table B23008.
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The third factor is related to changes in family life that meant
more mothers were likely to be in the labor force than in the past. In
2019 mothers of children 6 years old and younger had the highest labor
force participation than at any other time in the past. \7\ These
mothers were also older than in the past, as the average age of mothers
has been rising over time. Finally, a greater share of 40-something
women were mothers than in the past. The total number of children born
to women by the end of their fertile years, known as completed
fertility, hit a low in 2006 and has risen over the ensuing decade and
a half. \8\ The culmination was a large number of women with
substantial work experience, whose families relied on childcare.
---------------------------------------------------------------------------
\7\ BLS, Current Population Survey.
\8\ https://www.pewresearch.org/fact-tank/2021/05/07/with-a-
potential-baby-bust-on-the-horizon-key-facts-about-fertility-in-the-u-
s-before-the-pandemic/
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These challenges that women faced were not, however, unique to the
recession. Instead, they highlight our failure to adapt childcare,
workplace flexibility, and workplace parental leave policies as women
have entered the workforce and gained experience, training, and
education that has made them an essential part of the economy. Women
are no longer secondary earners as economists used to refer to them-
able to step back from work whenever their household demands required.
Today, more than 40 percent of mothers are the primary earner for their
family, earning at least half of total household income. \9\
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\9\ https://www.americanprogress.org/issues/women/reports/2019/05/
10/469739/breadwinning-mothers-continue-u-s-norm/
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Our transformation of our economy and our families has taken place
over the past 50 years.
In 1970, 43 percent of women participated in the labor force
participation, but over the next three decades women's labor force
participation grew to 60 percent, hitting a peak in 1999. During this
period of growth, the United States had one of the highest female labor
force participation rates of any OECD country. This surge in women's
paid employment was important for fueling U.S. GDP growth, accounting
for nearly one-fifth of real GDP growth in the 1970s and 1980s. The
U.S. prepandemic economy was roughly 15 percent larger than it would
have been if women were employed at the same rate and worked the same
number of hours that they did in 1970.
Yet, in the ensuing decades, the U.S. rank has fallen to near the
bottom among 22 OECD countries as these countries have expanded family
friendly policies including parental leave and childcare. \10\
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\10\ Blau and Kahn, 2013 https://www.nber.org/papers/w18702.
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While women's labor force participation growth stalled in the 21st
century, it declined even further for men. Declining labor force
participation was one of the challenges that the U.S. economy faced in
the 2000s even prior to the 2008 recession, which further exacerbated
that decline. However, the ongoing economic recovery led to a recovery
in the labor force participation rate that accelerated in the 5 years
prior to the pandemic. That recovery was fueled by women's--and
mother's--increasing labor force participation. The Kansas City Federal
Reserve Bank found that college-educated women in particular drove the
rebound in the prime-age labor force participation rate between 2015
and 2019. \11\
---------------------------------------------------------------------------
\11\ https://www.kansascityfed.org/research/economic-bulletin/
women-driving-recent-recovery-labor-force-participation-2019/
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Economic growth over the past several decades has been concentrated
in the service sector. To put this in perspective in February 2020 the
goods sector still had a million fewer jobs than it had at the start of
the 2008 recession. In contrast, the service sector had a 15 million
more jobs. This shift has both been fueled and helped fuel women's
labor force growth. Roughly two-thirds of the job growth since the
start of the 2008 recession went to women. With that job growth for all
women, also came growth in employment in the childcare sector.
By December 2020 women held the majority of nonfarm payroll jobs in
the United States. They held that position for January and February
and, while it was undone with the pandemic, they are likely to regain
that position again as we continue to recover. Already women's job
growth has exceeded that among men.
Even though women will likely return to employment in numbers that
allow them to regain their majority share of jobs, great growth in
women's employment and better matching of parents to jobs in which they
can be most productive requires a more reliable, affordable, and a
higher quality childcare sector.
It's not only women's rising labor force participation that has
changed, but our rising life expectancy has changed our working lives.
A smaller share of adulthood is spent with young children in the home.
A century ago, women having children could scarcely expect to live
beyond age 50 and the typical woman had roughly four children. Not
surprisingly, many women's entire adult lives were spent caring for
children. In contrast, women today have a life expectancy of roughly 80
and have half as many children. As a result, women's adult lives are no
longer spent primarily raising children. This is not to say that
children are not an important part of most people's lives. Parents
require support and flexibility, both of which will help them develop
labor market skills that they will be able to use for decades. Equally,
the time that parents need off to care for children is a shrinking
fraction of the total amount of hours they will work over their
lifetime. We can afford to give them that time.
Let me conclude by talking directly about childcare.
As the banking committee you understand the importance of a strong
financial sector to a functioning U.S. economy. When the great
financial crisis swept the globe in 2008, Congress, the Federal
Reserve, and the U.S. Treasury took swift action. The financial system
was regarded as the backbone of the economy--if it were to collapse it
could take the entire economy with it. Part of the banking and
financial sector's importance is that financial transactions allow us
to invest in companies, new ideas, and capital equipment. That
investment allows higher productivity growth and therefore ongoing
economic growth.
Childcare and education has more in common to the banking system
then you may suspect. It is the backbone of our future economy because
it invests in and develops our human capital. While women have often
done this labor for no or little pay, do not underestimate its value.
Human talent is developed through these investments and its ultimately
human ingenuity that fuels our economic growth.
The last several decades have brought tremendous strides in our
understanding of children's learning. Infants and toddlers take in the
world around them at birth, laying the foundation upon which the rest
of their knowledge will be built. Researchers have established that
profound advances take place in individuals' reasoning, language
acquisition, and problem solving in early childhood. Children need age
and developmentally appropriate play and learning from very early ages.
We now know that it is not sufficient to begin a child's education at
kindergarten. However, there is great inequality in access to early
childhood education. Yes, parents are investing heavily in their
children--both mothers and fathers are spending more time with their
children than earlier cohorts did, despite fewer children living in
homes with a stay-at-home parent. But early childhood education
requires knowledge about child development that not all parents have
and most children will spend time with other caregivers.
More than two-thirds of young children live in households in which
all parents are working--either a single working parent or a two-income
household. Yet high-quality childcare is hard to find and is expensive.
Families of children under the age of 5 spend $250 per week on average
on childcare. \12\ Research looked at parents preferences and
understanding of childcare to attempt to understand why so few children
get access to high quality early childhood education and care. The
research found that the childcare market's quality problems reflect
parents' inability to afford high quality care and challenges in
identifying quality among programs, but it does not reflect an
unwillingness to pay for these programs. \13\ The distinction between
an inability to afford rather than an unwillingness to pay is
important--parents would invest more in their children if they could.
And that is why parents with high incomes do invest so much in their
children. Lower income parents simply cannot afford the high cost of
high-quality programs. The result is unequal investment in children
that fundamentally erodes the ability for the level playing field
necessary for a competitive market economy to thrive.
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\12\ https://www.americanprogress.org/issues/early-childhood/news/
2020/02/18/480554/child-care-crisis-causes-job-disruptions-2-million-
parents-year/
\13\ Gordon, Hebst, Tekin, 2018 ``Who's Minding the Kids'', NBER
working paper https://www.nber.org/papers/w25335.
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Early childhood education does three things: (1) it provides
childcare that allows parents to work thereby raising household income
(2) it develops skills in children that lead to higher lifetime
earnings and (3) supports the equal investments in children necessary
for a competitive market economy to reach its potential. \14\ Research
suggests that expanding early learning initiatives would create
benefits to society of nearly $9 for every $1 invested, about half of
which comes from higher earnings among the children who receive these
investments. \15\
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\14\ Havnes and Mogstad, 2011 AER https://www.aeaweb.org/
articles?id=10.1257/pol.3.2.97.
\15\ 2016 Economic Report of the President ``Inequality in Early
Childhood and Effective Public Policy Interventions''.
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I want to highlight an often-overlooked act of Congress that gave
some communities in the United States high-quality low-cost childcare
for a temporary period. The ``Defense Housing and Community Facilities
and Services Act of 1940''. which was popularly known as the Lanham
Act, funded childcare in communities with defense industries. All
families, regardless of income, were eligible for what was high quality
childcare at a low cost. Research into the childcare that was provided
as a result of Congressional funding found that family bonds were
strengthened, children enjoyed the childcare, that the primary goal--
increasingly mother's employment--was achieved, and that children's
long-term outcomes were improved. \16\
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\16\ Herbst (2017) ``Universal Child Care, Maternal Employment,
and Children's Long-Run Outcomes: Evidence From the U.S. Lanham Act of
1940'', Journal of Labor Economics and https://
obamawhitehouse.archives.gov/blog/2015/01/22/experiment-universal-
child-care-united-states-lessons-lanham-act.
---------------------------------------------------------------------------
High-quality early education for all would narrow the achievement
gap. Dozens of preschool programs have been rigorously examined since
the 1960s. Overall, across all studies and time periods, early
childhood education increases cognitive and achievement scores by 0.35
standard deviations on average, or nearly half the Black-White
difference in the kindergarten achievement gap. Since higher income
children are currently more likely to have access to high-quality early
education, expanding access to all would narrow the achievement gap.
The Council of Economic Advisers under President Obama did some
calculations using the findings of the vast body of research on
preschool as one example of early childhood education. They found that
if all families were able to enroll their children in preschool at the
same rate as high-income families, the subsequent earnings gain that
would accrue had a net present value of $4.8 billion to $16.1 billion
per cohort even after subtracting the cost of the program. \17\
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\17\ https://obamawhitehouse.archives.gov/sites/default/files/
docs/early--childhood-report-update-final-non-embargo.pdf
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Finally, let me conclude by mentioning the aging population. While
the past several decades have seen declining fertility rates, completed
fertility has actually risen since 2006. This rise reflected the burst
of fertility of women in their late 30s and 40s in the 2000s and 2010s.
Children are born to mothers at increasingly older ages.
But in recent years women have reduced their fertility at all ages.
This is raising concerns that completed fertility among younger
Millennials will ultimately be lower than that of the previous
generation. College graduates in middle-class families struggle to pay
student loans, to save for the downpayment on a home, and to get a
stronger foothold in the labor market. Women with less education
struggle to find a job that will pay a living wage, let alone high
quality early childhood education. The shift to having children at
older ages reflects the desire by many people to establish their
careers and achieve financial stability prior to having children.
Research shows that women's careers and wages stagnate after having
children, a fact that leads many women to postpone having children as
long as possible. Women and couples are making decisions about having
children while considering the challenges of balancing work and
children, the support they will get from their employer, the difficulty
in arranging trustworthy childcare, and the financial cost of having
children.
In conclusion, women and parents are essential to the success of
our economy. The majority of college-educated workers in the United
States are women. This trend will continue since nearly 60 percent of
those graduating from college today are women-meaning that in a decade
an even greater share of college-educated workers will be female. It is
important that policymakers concerned about the macroeconomy understand
the crucial role that women are playing. But while women are crucial to
the functioning of our economy, our workplace policies and Government
policies have not kept up with the emergence of women as primary or co-
equal household earners.
______
PREPARED STATEMENT OF BERNADETTE NGOH
Founder, Trusted Care Family Day Care Home
June 23, 2021
Good afternoon Senators Warren, Kennedy, and Members of the
Subcommittee on Economic Policy. My name is Bernadette Ngoh. I am the
Owner/Director of Trusted Care Family Day Care Home, fondly called Mamu
Daycare in West Haven, Connecticut. Thank you for this opportunity to
speak to you today.
Trusted Care provides quality and affordable childcare services.
Our mission is to provide childcare in a nurturing environment where
kids play, explore, and learn at their pace with fervent guidance. This
gives parents opportunities to work, attend school or participate in
other functions with peace of mind, knowing that their children are
Home at Mamu Daycare. We are State-licensed and working toward national
accreditation.
I was raised in Southern Cameroon by a single mother, Dorothy
Akoba, who believed strongly in the value of education even though she
had no form of formal education. As a peasant farmer and small business
owner, she worked hard to educate us. I am the first girl in my family
to go to college. I received a LLB in English Private Law from the
University of Yaounde II SOA, Cameroon, and a Diploma in Women's Law
from the University of Zimbabwe. I attended the University of
Bridgeport, where I earned a Master of Science in Counseling,
Professional Diploma for Advanced Study with specialization in
Counseling and Master of Business Administration.
Up until 2010 I was an Adjunct Professor at the University of
Bridgeport in the great State of Connecticut. In 2011 I had twins. I
looked around for quality and affordable daycare, but the reality of
the times motivated me to start one in 2012. Our program gave me the
opportunity to care for my own children. With my kids as partners, we
tested most of the activities that characterize our program as it is
today: outdoor learning, the untapped learning space for kids. Our
activities offer kids opportunity to play, explore, exercise, and have
fun as they learn and enforces ``magic'' words and expressions such as:
``Thank You,'' ``No thanks,'' ``I'm Sorry.'' Our kids build life
skills, such as problem solving. Each child irrespective of their zip
code or the financial standing of their parents and/or guardian has the
potential of doing what they know to do best. I have the fun, hard job
of supporting our kids' curiosity, hoping that it will follow them in
their later ages, their needs will guide their adventures, their
innocence will last a little while and love, truth, and hard work will
pave the way for the next generation of Senators, CEOs, engineers,
doctors, and teachers. Oh, how I love my job! Oh, how hard my job is!
Oh, how even harder it is for the kids, especially kids 6 weeks through
5 years. Each day the kids leave for work, sometimes very early in the
morning to give Mom, Dad, or their guardian time to be the essential
heroes they are: decision makers, CEOs, doctors and other health care
workers, scientists, IT engineers, farmers, and grocery store workers.
The kids, as well as their parents, are heroes. They get up early, go
to work on time and oftentimes are obligated to work extended hours to
support the job that you are doing. At the daycare, they play hard.
Playing is a ``factory'' for learning. Daycare educators provide
families with an environment that helps children be the best they can
be, that helps them learn to fly. I support children's language
development, social/emotional development, and behavior. Character is a
scarce commodity that has its roots in early child education.
Before the pandemic, the youngest child in my care was about 3;
most of the children ranged from ages 3 to 8. I lost business,
enrollment fell and attendance dropped. Today my youngest is about 18
months, one is 2 years old and the majority are between the ages of 3
and 10.
The pandemic was tough--it hit us so hard. We quarantined twice. My
husband got extremely sick, and it was scary. We were not sure he was
going to make it. I became sick too. But eventually we both recovered
and were able to go back to work.
A parent lost his job and pulled his child out of daycare. Other
parents shared their difficulties of paying for additional expenditures
(mask and sanitizers) with their budgets. I suspended collection of
out-of-pocket family fees from most of the subsidized parents. I had
several unfilled slots at the daycare. It's tough financially--you're
just wondering, ``if I don't take this child [for free], I may lose
them when they get subsidy.'' Then I look at parents. They have even
less than me and I can see some of them are struggling. I run a 24/7
childcare program, which helped with my income but meant very long
hours during the pandemic.
We might be getting out of the pandemic but the day-to-day
struggles of struggling families date back to before COVID-19 pandemic,
and they require a lot, especially from family childcare providers. We
are not only educators, but also business people, nurses, counselors,
and social workers for parents as well as children, I have parents with
kids who are paid about $475 a week and could not afford diapers,
wipes, and taxi fares to daycare or work on stormy days. One works a
late shift, picks her child up late and has a long walk to and from the
bus. She is barely surviving. As hollow as I see my unmet financial
needs, the struggles of a parent like this one add to my duties. It is
the ``unseen labor'' of many childcare providers. I buy diapers to
supplement what she can afford. I arrange for her to be dropped off at
the bus stop and home when she is running late, the weather is not
favorable or when it too late in the night to be pushing the stroller
with the baby. To do my job, I must be able to shift quickly from one
role to the next, drawing on all the knowledge and skills I have gained
from continuous training and experience to support that parent and her
child.
True, it takes a community to raise a child, but learning begins at
home. Due to the changing nature of our work, family daycare homes have
become homes where most of the foundation for learning begins.
Sometimes childcare providers spend more time with children than their
parents. Providers spend ``day-time'' time with our children. We are
among the first people who will impact the lives of children in ways
that will determine tomorrow's society.
How do we place a value on this work? Is it as important as the
work of doctors or policemen? Let's look at remuneration. If I became
sick and closed my doors tomorrow, five parents would not be able to
work. And I would not receive sick pay, disability benefits or a
pension if I were older.
When the pandemic hit, schools and childcare centers closed their
doors, but family childcare stayed open. We were recognized as
essential workers, but we are not supported the way other essential
workers are. Senators, without us most of you could not be working.
Childcare providers taught you. We are teaching your children and
grandchildren, nieces and nephews their first words. Jeff Bezos
wouldn't be working either. And even our businesses, hospitals and
police officers would not be at work if we close our daycare programs.
This is the multiplier effect of childcare on the economy.
Building a strong childcare infrastructure is long overdue. Our
country has been pennywise, and pound foolish. If we do not build a
strong foundation, there will be cracks that will be much more
expensive to fix later. Investments in childcare now also enable us to
save more later, when children become adults and their challenges are
much more costly to address. A stitch in time save nine.
As a daycare provider, parent, and a business owner I am submitting
that:
Our country has a childcare infrastructure problem.
Investment in childcare infrastructure will provide
immediate and long-term economic benefit.
Childcare providers cannot afford to do this work, parents
can't afford to pay for it, and children are missing out on the
nurturing and support they need to thrive.
We need professional development and compensation to retain
experienced childcare educators in the field.
You have an awesome responsibility: voters are asking you
to rebuild America's infrastructure in the wake of the
pandemic. Every dollar you invest in childcare--including
family childcare programs like mine--generates significant
economic benefit. The danger is not in investing too much, but
in investing too little.
We need high-quality care for all children from birth to 5, and
equitable access to funding so that all families can enroll their
children in the childcare program of their choice. For the sake of our
future, I urge you to invest as much new funding as possible in
rebuilding the childcare infrastructure over the next decade.
______
PREPARED STATEMENT OF RACHEL GRESZLER
Research Fellow in Economics, Budget and Entitlements, The Heritage
Foundation
June 23, 2021
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
PREPARED STATEMENT OF ABBY M. MCCLOSKEY
Founder and Principal, McCloskey Policy, LLC
June 23, 2021
Chair Warren, Ranking Member Kennedy, and Members of the Committee,
thank you for the opportunity to testify today. I have spent most of my
career focused on policies to improve upward economic mobility and to
support working families, including paid parental leave and childcare.
In the testimony that follows, I will discuss the economic impact
of childcare for parents and children, review the current policy
landscape and proposals for reform, and turn to policy principles and
recommendations.
The Childcare Challenges Facing American Families
To understand the childcare challenges that face working families,
it is helpful to consider the dramatic evolution of work and family
over the last 60 years. Since 1960, the share of U.S. households headed
by single parents has more than tripled, with unmarried parents now
representing approximately one-third of American households. \1\ The
majority of women participate in the labor force, and mothers are now
the sole or main breadwinners in 40 percent of American families,
according to the Pew Research Center. \2\ Globalization and
technological advances have depressed wage growth for America's low-
wage workers relative to higher earners. \3\
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\1\ Pew Research Center, ``The American Family Today'', 2015,
https://www.pewresearch.org/social-trends/2015/12/17/1-the-american-
family-today/.
\2\ Pew Research Center, ``In Four in Ten Families, Mom Is the
Primary Breadwinner'', 2015, https://www.pewresearch.org/social-trends/
2015/12/17/parenting-in-america/st-2015-12-17-parenting-20/.
\3\ Brookings Institute, ``Middle Class Income and Wages'',
https://www.brookings.edu/blog/brookings-now/2020/01/24/charts-of-the-
week-middle-class-income-and-wages/.
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This has created new tensions around work and care that public
policy and markets have failed to adequately address. In particular,
access to affordable and high-quality childcare is out of reach for
many families. Childcare costs are higher than the costs of college,
food, and housing in many parts of the country. \4\ For parents living
in poverty, childcare costs can consume up to 30 percent (or more) of
their monthly income. \5\ Research by the Center for American Progress
has identified what it deems ``childcare deserts''--areas where there
is little or no access to licensed childcare providers. \6\ Providing
high quality care inside the home is also difficult. For many families,
it is not financially possible for a parent to be the primary caregiver
for their child even in the first few weeks of life, let alone in the
years before a child reaches elementary school. A Department of Labor
study found that one in four women return to work within two weeks of
giving birth, and few fathers take any time off at all. \7\
---------------------------------------------------------------------------
\4\ Childcare Aware of America, ``The U.S. and the High Price of
Childcare: 2019 Report''. https://www.childcareaware.org/our-issues/
research/the-us-and-the-high-price-of-child-care-2019/.
\5\ Lynda Laughlin, ``Who's Minding the Kids? Child Care
Arrangements: Spring 2011'' (U.S. Department of Commerce, April 2,
2013), www.census.gov/prod/2013pubs/p70-135.pdf.
\6\ Aparna Mathur and Abby McCloskey, ``The American Dream in
2020'', AEI Paper https://www.aei.org/research-products/report/the-
american-dream-in-2020-how-to-strengthen-it/.
\7\ AEI-Brookings, ``Paid Leave an Issue Whose Time Has Come'',
2017, https://www.aei.org/research-products/report/paid-family-and-
medical-leave-an-issue-whose-time-has-come/.
---------------------------------------------------------------------------
Lack of access to affordable, high-quality childcare exerts
pressure on the economy in two main ways: First, it impacts parents'
economic opportunity. There is a large literature showing that high
childcare costs are associated with less work among mothers. In a
review of the literature, economist Jean Kimmel found that a 10 percent
increase in childcare costs is associated with a 2.0 percent to 7.4
percent decrease in women's employment. \8\ Policies that offset
childcare costs are associated with increased employment and reduced
dependence on Government welfare. Using data from the 1999 National
Survey of America's Families, David Blau and Erdal Tekin found that
childcare subsidies for welfare recipients resulted in a 13-percentage-
point increase in the likelihood of employment for single mothers. \9\
Another study found that the introduction of subsidized childcare in
Quebec in the late 1990s resulted in a significant employment boost for
married women. \10\
---------------------------------------------------------------------------
\8\ Aparna Mathur and Abby McCloskey, ``How To Improve Economic
Opportunity for Women'', AEI Research Paper, 2014, https://www.aei.org/
wp-content/uploads/2014/07/-how-to-improve-economic-opportunity-for-
women--120143477839.pdf?x91208.
\9\ David Blau and Erdal Tekin, ``The Determinants and
Consequences of Child Care Subsidies for Single Mothers'', Journal of
Population Economics 20, no. 4 (May 2003): 719-41.
\10\ Michael Baker, Jonathan Gruber, and Kevin Milligan,
``Universal Childcare, Maternal Labor Supply, and Family Well-Being'',
Journal of Political Economy 116, no. 4 (2008): 709-45.
---------------------------------------------------------------------------
The high cost of care likely impacts childbearing rates, reducing
the size of the future labor force. A recent New York Times survey
found that the most common reason young adults are having fewer
children is that ``childcare is too expensive'' (64 percent of
respondents). \11\ Lack of paid parental leave is associated with an
uptick in welfare use for new mothers and reduced wages upon returning
to work. \12\ According to Francine D. Blau and Lawrence M. Kahn, about
28 percent of the decline in female labor force participation in
America relative to other countries in the Organisation for Economic
Cooperation and Development (OECD) can be explained by the Nation's
lack of family-friendly workplace policies, including paid parental
leave and childcare. \13\
---------------------------------------------------------------------------
\11\ Claire Cain Miller, ``Americans Are Having Fewer Babies. They
Told Us Why'', New York Times, July 5, 2018, https://www.nytimes.com/
2018/07/05/upshot/americans-are-having-fewer-babies-they-told-us-
why.html.
\12\ AEI-Brookings, ``Paid Leave an Issue Whose Time Has Come'',
2017, https://www.aei.org/research-products/report/paid-family-and-
medical-leave-an-issue-whose-time-has-come/.
\13\ Ibid.
---------------------------------------------------------------------------
Second, lack of access to high-quality care--both inside the home
and outside of it--impacts children's economic outcomes. While all
children would benefit from high quality care in their early
developmental years, it is least available for disadvantaged children
whose families often can neither afford high-quality care options
outside the home nor do they have access to such options inside the
home.
Research pioneered by Nobel-prize winning economist James Heckman
has found that investment in early childhood care for disadvantaged
families has lifelong economic implications for children, impacting
their health, education, and professional outcomes. \14\ His research
has primarily centered around two intensive and highly targeted early
childhood development programs--the Perry Preschool Project and the
Carolina Abecedarian Project--which focused on low-income Black
children and their families in the 1960s and 1970s, providing in-home
coaching and wraparound services in addition to high-quality preschool.
---------------------------------------------------------------------------
\14\ James Heckman, ``Invest in Early Childhood Development'',
https://heckmanequation.org/www/assets/2013/07/F-
HeckmanDeficitPieceCUSTOM-Generic-052714-3-1.pdf.
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Heckman's most recent research found that these gains continued
across generations, with improvements in education, employment, crime,
school suspensions, and health for the children of those who had
participated in the Perry Preschool Project. \15\ This suggests that
investments in early childhood care and education, properly structured
and targeted, could be a critical tool to unlock intergenerational
upward mobility and economic opportunity. Furthermore, investments in
early childhood have shown greater gains in economic opportunity than
investments in adolescence and adulthood, suggesting that we would
benefit from shifting our policy interventions to earlier in life. \16\
---------------------------------------------------------------------------
\15\ Heckman, James, and Ganesh Karapakula. ``Intergenerational
and Intragenerational Externalities of the Perry Preschool Project'',
2019.
\16\ James Heckman, ``Catch 'em Young'', Wall Street Journal,
2006, https://www.wsj.com/articles/SB113686119611542381.
---------------------------------------------------------------------------
Current Policy Landscape
The current policy landscape for childcare is far from bare. Many
Government programs subsidize childcare; however, none provide
comprehensive support.
The Child Care and Development Fund (CCDF) is administered by the
Department of Health and Human Services and provides block grants to
the States to assist low-income families in attaining childcare for
children under the age of 13. Federal law states that children are
eligible for services under CCDF if their family income is at or below
85 percent of the State median income; however, the majority of States
set eligibility limits below that. Families currently on welfare,
specifically Temporary Assistance for Needy Families (TANF), are
usually given priority for the funds, leaving low-income families on
the verge of welfare without service. \17\ Economists Mezey,
Schumacher, and Greeberg found that fewer than 30 percent of those
leaving welfare were receiving a childcare subsidy. \18\ A 2021 GAO
report found that only 4 percent to 18 percent of federally eligible
children were receiving CCDF subsidies. \19\
---------------------------------------------------------------------------
\17\ Aparna Mathur and Abby McCloskey, ``How To Improve Economic
Opportunity for Women'', AEI Research Paper, 2014, https://www.aei.org/
wp-content/uploads/2014/07/-how-to-improve-economic-opportunity-for-
women-120143477839.pdf?x91208.
\18\ Jennifer Mezey, Mark Greenberg, and Rachel Schumacher, ``The
Vast Majority of Federally Eligible Children Did Not Receive Child Care
Assistance in FY 2000'', (Center for Law and Social Policy, October
2002), www.clasp.org/resources-and-publications/archive/0108.pdf.
\19\ GAO, ``Child Care Eligibility and Receipt, and Waitlist'',
2021, https://www.gao.gov/products/gao-21-245r.
---------------------------------------------------------------------------
The Child and Dependent Care Tax Credit provides a nonrefundable
tax credit ranging from 20 to 35 percent for eligible childcare costs;
costs that are capped at $3,000 for one child and $6,000 for two or
more children (this was temporarily increased $8,000 and $16,000 and
made refundable as part of pandemic relief). The permanent limits are
only 1.5 times the 1976 values, considerably less than the rate of
inflation or the growth in childcare costs. And the credit is
nonrefundable, which presents a challenge for low-income families who
might not have income tax liability against which to claim the credit.
There is also an employer-based childcare tax exclusion. Under this
exclusion, employees can set aside $5,000 from their pretax salary for
childcare expenses. Employers can choose whether or not to offer the
exclusion. Higher-income families generally benefit more from the
exclusion, since the excluded income avoids both income and payroll
taxes.
Several other Government support programs may offset the cost of
childcare, albeit indirectly. For example, the Child Tax Credit is a
tax credit of up to $2,000 per child under the age of 17 (temporarily
increased to $3,600 per child under age 6 from pandemic-related
legislation). Presumably, this could be used to offset some of the
costs of childcare, but mostly for middle-class families with tax
liabilities. The Tax Policy Center found that families in the bottom
quintile are the least likely to receive a credit, and when they do, it
is smaller than for higher income families because the credit is not
fully refundable. \20\ Additionally, the Earned Income Tax Credit
(EITC) may be used to offset childcare-related expenses for low-income
families, although it need not be used for this purpose.
---------------------------------------------------------------------------
\20\ Tax Policy Center, ``Tax Policy Center Briefing Book'', 2018,
https://www.taxpolicycenter.org/sites/default/files/briefing-book/
taxes-and-the-family.pdf.
---------------------------------------------------------------------------
Last but not least, the Head Start program is the Nation's largest
Federal program providing early childhood education for disadvantaged 3
and 4 year olds. Results on the efficacy of Head Start program have
been mixed, with some studies showing positive effects and others
finding that gains fade over time. \21\ Moreover, in the same way that
the quality of K-12 schools varies widely across the country, the
quality of various Head Start programs also varies widely. A 2013
National Institute for Early Education study found that 60 percent of
Head Start centers were rated as medium to low quality, with Black
children over-represented in lower quality programs. \22\
---------------------------------------------------------------------------
\21\ HHS, ``Head Start Impact Report'', 2010, https://
www.acf.hhs.gov/opre/report/head-start-impact-study-final-report-
executive-summary.
\22\ Katharine Stevens and Elizabeth English, ``Does Pre-K Work?''
AEI Paper, 2016, https://www.aei.org/wp-content/uploads/2016/04/Does-
Pre-K-Work.pdf?x91208.
---------------------------------------------------------------------------
Current Proposals for Reform
Even in our polarized political climate, the challenges of access
to high-quality childcare are widely recognized. As such, there have
been a number of proposals put forward by political leaders across the
ideological spectrum to improve investments in childcare.
On the political Right, many of these proposals have involved
shifting the timing of existing tax credits (Child Tax Credit) or
retirement benefits (Social Security) to be accessed upon having young
children in order to help cover the cost of paid leave or childcare;
setting up tax-advantaged savings accounts to be used for pregnancy,
paid leave, or childcare expenses, and; providing tax credits to
companies that provide family-friendly policies, such as paid family
leave. While these policies benefit from having a small spending
footprint--an important consideration in our current fiscal
environment--they keep early childhood care an undersized share of our
overall Federal portfolio and would provide limited support to the
neediest families who would not benefit from nonrefundable tax credits
or tax-advantaged accounts.
On the political Left, efforts have largely centered around the
creation of large new public programs, such as universal childcare or
universal pre-K. Recently, President Biden put forward the American
Families Plan, which among other provisions, includes universal
preschool for 3 and 4 year olds, a larger and refundable Child and
Dependent Care Tax Credit, an expanded Child Tax Credit, a $15 minimum
wage, and a national 12-week paid leave policy for family and medical
reasons. Too often these proposals overlook the existing policies that
are in place, come at a tremendous cost to taxpayers (and the future
generations likely to pay for our historic debt burden), and go beyond
what research suggests would be most beneficial for parents and
children. Proposals for universal public preschool at times seem to
overlook the emergent issues in our public K-12 system, which is
falling behind our global peers, or Head Start where results have been
less robust than in more targeted programs. We shouldn't add to the
system without trying to better understand how to make the existing one
work better.
Other reforms have focused on increasing pay and benefits for
childcare providers. On average, the median hourly wage for childcare
workers was $10.72 in 2017, and half of childcare workers are on a
public assistance program relative to 21 percent for the workforce.
\23\ Increased opportunities for skills-attainment would help to
support higher wages and professional advancement for care providers.
Multiple States--including West Virginia, Pennsylvania, and Colorado--
have begun to implement registered apprenticeship programs for early
childhood educators. These programs provide early childhood educators
with on-the-job training and a career pathway to improve their
knowledge and skills. They create more opportunities for workers to
move into roles of greater responsibility and pay, a virtuous cycle
resulting in higher quality care. \24\
---------------------------------------------------------------------------
\23\ Bipartisan Policy Center, ``Registered Apprenticeships: A
Viable Career Path for Early Childhood Educators'', 2019, https://
bipartisanpolicy.org/download/?file=/wp-content/uploads/2019/09/BPC-
Early-Childhood-Issue-Brief-RV4.pdf.
\24\ Ibid.
---------------------------------------------------------------------------
Mandating higher wages and benefits may inadvertently reduce the
number of care providers that centers can employ further contributing
to the shortage of care. Increased costs are also likely to be passed
onto parents, many of whom are low-wage earners themselves and already
struggling with access and affordability of care. According to the
Center for American Progress, more than half of Hispanic families live
in childcare deserts, and the cost of center-based childcare for two
young children consumes 56 percent of median household income for Black
families. \25\ Higher care costs could result in at-risk families
moving to lower quality or informal care providers or needing to leave
the labor force entirely. For entry-level care providers, wage support
through programs such as the EITC and a tightening labor market from
economic growth would boost wages without limiting the supply of care.
---------------------------------------------------------------------------
\25\ Center for American Progress, ``How Child Care Disruptions
Hurt Parents of Color The Most'', 2020, https://
www.americanprogress.org/issues/early-childhood/news/2020/06/29/486977/
child-care-disruptions-hurt-parents-color/.
---------------------------------------------------------------------------
While proposed policy solutions differ widely, there is bipartisan
recognition of the need for reform and a recognition of the economic
benefits from high quality care for parents and children. This suggests
that there is a way forward that could garner broad support.
Principles and Recommendations for Moving Forward
As policymakers weigh varying investments in early childhood care
in the postpandemic economy, I'd like to put forward five principles to
guide the discussion to common ground:
1. The benefits of high-quality early childhood investment are most
pronounced for disadvantaged children and their parents. We
should focus our investment here.
The literature shows tremendous gains from targeted care
investments for disadvantaged children. As stated earlier, Heckman has
found 7 percent to 13 percent annual return on investment from early
childhood interventions in economically disadvantaged families,
including improved educational and career prospects as well as reduced
health and criminal expenses. \26\ Recent research by Heckman and
others has found that the children of those who attended such programs
also exhibit improved outcomes, suggesting that investment in early
childhood education could be an unlock for intergenerational economic
opportunity. \27\ This could be particularly powerful if paired with
economist Raj Chetty's research on upward mobility to target early
childhood interventions by neighborhood.
---------------------------------------------------------------------------
\26\ James Heckman, ``Invest in Early Childhood Development'',
https://heckmanequation.org/www/assets/2013/07/F-
HeckmanDeficitPieceCUSTOM-Generic-052714-3-1.pdf.
\27\ Heckman, James, and Ganesh Karapakula. ``Intergenerational
and Intragenerational Externalities of the Perry Preschool Project'',
2019.
---------------------------------------------------------------------------
In contrast, the research on universal childcare and preschool
programs is mixed. Some studies have found negative effects when full-
time, center-based care becomes the norm and other care solutions are
removed. For example, Quebec's universal childcare program has been
associated with negative outcomes for children on a variety of
behavioral and health dimensions, including increased aggression,
physical illness, and lower quality parental relationships. \28\ Other
studies, including a 2021 NBER working paper on the effects of
universal preschool in Boston have found improvements in college-going,
college preparation, standardized test scores, and behavioral outcomes
from access to pre-K. \29\ This suggests universal pre-K and universal
childcare are an over-reach relative to the current evidence base, and
resources are best targeted towards at-risk families.
---------------------------------------------------------------------------
\28\ Michael Baker, Jonathan Gruber, and Kevin Milligan,
``Universal Childcare, Maternal Labor Supply, and Family Well-Being'',
Journal of Political Economy 11, no. 4 (2008): 709-45.
\29\ Guthrie Gray-Lobe, Parag A. Pathak, Christopher R. Walters,
``The Long-Term Effects of Universal Preschool in Boston'', 2021,
http://www.nber.org/papers/w28756.
---------------------------------------------------------------------------
2. Policymakers should seek to maximize care options for parents
instead of one-size-fits-all solutions.
While there is a strong case for public investment in early
childhood care for disadvantaged families, this does not translate to a
one-size-fits-all public program. Childcare needs and values vary
widely. As such, policymakers should seek to create more care options
for families, rather than fewer.
One of the most promising channels for reform in the childcare
space is an expansion of the Child and Dependent Care Tax Credit, such
as that proposed by President Biden in the American Families Plan, and
along the lines of what I've proposed with my former colleagues Aparna
Mathur and Angela Rachidi at the American Enterprise Institute. \30\
Tax credits for childcare can be thought of as a school choice program
for early childhood care and education. Parents who need care outside
of the home can choose to send their children to center-based care,
help pay for a nanny, enroll their children in a religious program, a
dual language class, all of which could be full-time, or part-time, or
something in between. An expanded CDCTC would allow for a proliferation
of different types of programs in response to parental preferences and
negate the need for a universal, public program. A refundable credit
would benefit low-income families, for whom childcare costs are a
barrier to work and high-quality care outside the home is financially
prohibitive.
---------------------------------------------------------------------------
\30\ Aparna Mathur and Abby McCloskey, ``Fostering Upward Economic
Mobility in the United States'', AEI Research Paper, 2014, https://
www.aei.org/wp-content/uploads/2014/04/-fostering-upward-economic-
mobility-in-the-united-states-151727618007.pdf?x91208.
---------------------------------------------------------------------------
Some have argued that offsetting childcare expenses pushes parents
into the labor force and away from the home. This overlooks the costs
of working, such as payroll and income taxes that working parents incur
and stay-at-home parents do not.
3. New programs should take into account existing programs and make
sure new spending is paid for.
We must be judicious with our spending priorities as well as with
our pay-fors. The Federal debt is already at historic levels and that's
before an infrastructure package or any further Government spending.
Federal debt held by the public is equal to the size of our entire GDP.
\31\ Moreover, we are not starting from scratch in the childcare space.
As outlined in Section II, there are childcare block grants to the
States, Head Start, the Child and Dependent Care Tax Credit, the Child
Tax Credit, tax credits to employers and more.
---------------------------------------------------------------------------
\31\ CBO, ``The Budget and Economic Outlook: 2021-2031'', https://
www.cbo.gov/publication/56991.
---------------------------------------------------------------------------
New programs should seek to rationalize the existing landscape of
Federal and State policy to prevent duplication, waste, and overlap.
For example, an expansion of the Child and Dependent Tax Credit could
be paired with a streamlining of existing policies. In our AEI paper,
``Improving Economic Opportunity for Women'', Mathur and I propose
substantially increasing the amount of the CDCTC and making it
refundable. This would reduce the need for CCDF and employer-sponsored
tax credits, making childcare support available regardless of employer
options or State policies. \32\ While all of us would appreciate an
offset in childcare costs or a child allowance expansion, it is
particularly important for low-income and disadvantaged families; this
suggests that we should have a relatively tight income limit on tax
credit eligibility.
---------------------------------------------------------------------------
\32\ Aparna Mathur and Abby McCloskey, ``How To Improve Economic
Opportunity for Women'', AEI Research Paper, 2014, https://www.aei.org/
wp-content/uploads/2014/07/-how-to-improve-economic-opportunity-for-
women-120143477839.pdf?x91208.
---------------------------------------------------------------------------
Some have argued that investments in care programs would pay for
themselves given that society is already bearing the burden of
underinvestment in early childhood. Importantly, this has not been the
case with our existing public preschool programs, even those targeted
towards at-risk children, such as Head Start. In the words of Heckman,
``there is little basis for providing universal programs at zero
cost.'' \33\
---------------------------------------------------------------------------
\33\ James Heckman, ``Catch 'em Young'', Wall Street Journal,
2006, https://www.wsj.com/articles/SB113686119611542381.
---------------------------------------------------------------------------
4. We should make it easier for parents to spend time with infants.
While much of the discussion on childcare focuses on care outside
the home, care inside the home is vitally important. In her book, What
Children Need, Columbia University economist Jane Waldfogel finds that
a parent being actively present during the first year of a child's life
is linked to a host of positive emotional, physical, and mental health
outcomes for children.
Yet the status quo makes it very difficult for parents to spend
this critical time with their children, especially low-income parents
who have a thin financial margin and lack access to benefits such as
paid leave from their employers. Fewer than one in five workers have
access to paid parental leave from their employers, and 40 percent of
workers lack job protection following the birth of a child. \34\ As a
result, one in four mothers returns to work within two weeks after
having a child, and many fathers take no time off of work at all. \35\
The impact is significant, from reduced rates of breastfeeding to one
of the highest rates of neonatal fatalities in the developed world.
\36\
---------------------------------------------------------------------------
\34\ AEI-Brookings, ``Paid Leave an Issue Whose Time Has Come'',
2017, https://www.aei.org/research-products/report/paid-family-and-
medical-leave-an-issue-whose-time-has-come/.
\35\ Ibid.
\36\ Ibid.
---------------------------------------------------------------------------
A modest Federal paid parental leave policy would protect those
early weeks between parents and infants and has been supported by the
bipartisan AEI-Brookings paid leave working group (in which I'm a
member). \37\ While there have been calls for more expansive leave
packages for family and medical purposes, the most pronounced benefits
in the paid leave literature accrue from paid parental leave. As such,
we should unbundle this from the other leave policies and prioritize
its implementation.
---------------------------------------------------------------------------
\37\ Ibid.
---------------------------------------------------------------------------
Boosting wages through wage subsidies such as the Earned Income Tax
Credit and economic growth also would allow parents to scale back hours
to spend more time at home, while helping to ensure that one or both
parents remain attached to the labor force. Additionally, the most
successful early childhood care interventions have also been paired
with in-home visits and parental coaching, suggesting that care inside
the home and outside of it are dynamic complements, and the latter does
not negate the former. \38\
---------------------------------------------------------------------------
\38\ James Heckman, ``Invest in Early Childhood Development'',
https://heckmanequation.org/www/assets/2013/07/F-
HeckmanDeficitPieceCUSTOM-Generic-052714-3-1.pdf.
---------------------------------------------------------------------------
5. We should address the supply side of care to bring down costs.
One potential contributor to heightened childcare costs is the
decline in the supply of providers. A 2019 report noted a 35 percent
decline in small family childcare providers from 2011 to 2017 and a
concurrent decline in large family care providers by 8 percent. \39\
This could, in part, be the result of childcare regulation. As with
occupational licensing measures, safety and quality standards are
crucial; however, overly burdensome restrictions that may prevent
otherwise qualified care providers from entering the market. \40\
Therefore, a care package should include incentives for States to
streamline their care regulations to ensure children are receiving
optimal care and other burdens are removed so that consumers (i.e.,
parents) do not wind up paying the high price.
---------------------------------------------------------------------------
\39\ Aparna Mathur and Abby McCloskey, ``The American Dream in
2020'', AEI Paper https://www.aei.org/research-products/report/the-
american-dream-in-2020-how-to-strengthen-it/.
\40\ Ibid.
---------------------------------------------------------------------------
Additionally, more attention is needed to increase the supply,
retention, and advancement of care providers. As discussed in Section
IV, apprenticeships and vocational training for care providers are
promising solutions to increase the supply of caregivers, as well as
improve their skills and wages. Multiple States have begun
experimenting with access to registered apprenticeship programs for
early childhood educators.
Conclusion
To conclude, childcare impacts the economy through parental
participation in the labor force as well as children's developmental
outcomes. These impacts are particularly pronounced for disadvantaged
families. While there are many existing Government programs that seek
to offset childcare costs and increase access to care, these programs
are not comprehensive and have left out many low-income families. As
policymakers weigh how to improve the childcare landscape in the
postpandemic economy, investments in early childhood care for at-risk
families should be at the core of Federal childcare policy given their
well-documented record of generating significant economic returns,
upward mobility, and improved labor force attachment. New programs
should take into account existing policy and seek to create more
options for high-quality care--both inside the home and outside of it--
instead of one-size-fits-all solutions.
RESPONSES TO WRITTEN QUESTIONS OF SENATOR KENNEDY
FROM RACHEL GRESZLER
Q.1. How has COVID-19 impacted women's employment and economic
activity?
A.1. Initially, early in the pandemic, women lost more jobs
than men. They were also more likely to drop out of the labor
force to stay home with children when schools and daycare
centers closed.
In the first 2 months of the COVID-19 pandemic, women's
employment was down by 1.2 million more than men's. But as of
June 2021, men's employment is actually down by 252,000 more
than women's. Female unemployment peaked at 16.1 percent in
April 2020 as men's hit 13.6 percent. Yet today, the
unemployment rate among women is lower than among men (5.7
percent vs. 6.0 percent).
And while women's labor force participation rate has
declined slightly more than men's since the pandemic began (1.7
percentage points vs. 1.6), women's 5.3 percent increase in
earnings is more than twice that of men's 2.2 percent gain.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Not only have women largely recovered from those initial
disparities, but the workplace changes brought on by the
pandemic will arguably propel women forward in the workplace,
as opposed to setting them back.
Q.2. Due to the pandemic, many childcare providers were forced
to close their doors. According to The Chamber of Commerce,
over 70 percent of working parents with children younger than 6
years old stayed home throughout the year. Additionally, with
greater accessibility to childcare, 68 percent of employed
parents say they'd be able to work more. Question: Has the
pandemic and childcare struggles disproportionately impacted
parents' employment?
A.2. Yes, parents' work was disproportionately impacted at the
beginning of the pandemic. In large part, their hours were
affected (having to cut back on them by an average of 8 hours
per week), and to a lesser degree some had to stop working
entirely. Somewhat surprisingly, this is no longer the case and
parents' employment has been less impacted than nonparents.
Q.3. How have working parents been disproportionately affected
by both the pandemic and issues related to childcare?
A.3. At first, childcare center and school closures meant many
parents had to cut back on work or stop working entirely. But
most childcare centers opened long before public schools. And
fortunately, many families found alternatives to childcare
providers through the use of family- and friends-care.
Surprisingly, a study by Jason Furman, et al. (Furman is a
former Chair of President Obama's Council of Economic
Advisers), found that, as of May 2021, working parents with
young children were actually less likely than workers without
young children to have experienced declines in employment.
Q.4. The American Families Plan, Biden's proposal, would invest
$200 billion into universal preschool for all 3 to 4 years
old--saving the average family $13,000 and assist 5 million
children. Senator Warren's $700 billion proposal would expand
federally offered childcare, Head Start, to establish a
``universal system for families'' who don't qualify for their
services. Thus, wealthy families who could afford childcare
would be eligible for a Federal subsidy. Question: Who stands
to benefit most from a universal, subsidized childcare for all
proposal?
A.4. Wealthy and affluent families have stronger preferences
for center-based childcare and thus would be most likely to
benefit from these proposals. Moreover, wealthier families
living in high-cost areas would likely receive the highest
subsidy amounts as annual daycare costs often exceed $20,000
per child in large cities.
Q.5. Who stands to benefit from universal childcare help the
most? And how would this proposal truly benefit both childcare
workers and families?
A.5. Wealthier families with two earners, and also single-
parent families, would benefit the most from universal
Government childcare programs. The proposal to mandate higher
wages for childcare workers would benefit some, but not all
childcare workers, as the Government-directed childcare centers
would provide higher wages while workers who prefer to care for
children in smaller, family-based, and religious centers (or
who do not live in areas where large providers exist) would be
less likely to qualify for the subsidies and thus higher wages.
Moreover, the proposal to mandate that childcare workers in
programs receiving subsidies have the equivalent education of
kindergarten teachers would effectively eliminate the jobs of
many childcare workers who do not have college degrees and are
likely not in positions to get them.
Evidence from Quebec shows widespread Government-subsidized
childcare harms children and families. There is similar
evidence from within the U.S. in targeted lower-income
subsidized programs. And recently, evidence from Chicago and
Trenton, New Jersey, show the unintended consequences of
creating two-tiered systems and driving out the provision of
private, non-Government care, while also diverting funds meant
to benefit children and families and instead aiding cronyism
and corruption.
Q.6. President Biden's proposal also includes a $15 an hour
wage for everyone working in the Head Start program and pre-K.
A recent report done by the Heritage Foundation found that this
could significantly increase the cost of childcare, especially
in Louisiana. If Congress raised the Federal minimum wage to
$15 an hour, in Louisiana, this would lead to a 37 percent hike
in costs. A $5,487 increase in cost for one child enrolled in
infant care and one child in 4-year-old care. Question: Do you
know how much it would cost the families in my State of
Louisiana if Congress were to enact a $15 minimum wage for
childcare?
A.6. Currently, the average cost of childcare for an infant in
Louisiana is $7,728 while care for a 4-year-old is $6,912 per
year, for a total two-child cost of $14,640. I estimate that a
$15 minimum wage would increase childcare costs to $10,624 for
an infant (an increase of $2,896) and to $9,503 for a 4-year-
old (an increase of $2,591). In total, a family with two
children in childcare would see their annual costs rise by
$5,487, from $14,640 to $20,127. It is important to note that
my estimates of the impact of a $15 minimum wage on childcare
costs likely represent the lower bound as they only assume that
workers with wages currently below $15 will receive raises to
$15 per hour, but in reality, workers with higher wages will
also have to receive pay raises (including childcare directors)
in order to maintain a just and competitive compensation
schedule.
With the median annual income in Louisiana equal to
$46,460, a 37 percent increase in childcare costs would impose
tremendous financial burdens on families. Infant care alone
would consume 23 percent of an average worker's income, and
care for an infant and 4-year-old would require 43 percent of
an average workers' income.
Q.7. How can current Government funded programs be changed to
better align with families' needs and kids' well being?
A.7. The Federal Government already provides significant
funding for early childhood care and education through
childcare development block grants and through Head Start.
Block grant funding should be widely available at providers of
parents' choices, and Head Start should be made portable, so
that families can use those funds at a preschool or childcare
provider of their choice. The reality is that Head Start is not
a viable childcare solution for working parents as it often
only provides a few hours of care per day, and yet at about
$10,000 per student, it costs as much as full-time childcare in
a majority of States.
Moreover, State policymakers should examine and remove
childcare regulations that do not significantly improve the
safety and quality of care. This would increase the supply of
providers and lower the cost of care, allowing families to
choose from more options--including small family and religious
center providers--that meet their needs and desires.
Q.8. Shouldn't we prioritize maximizing options for parents
rather than applying this blanket, one-size-fits-all approach
to childcare?
A.8. For parents with young children, there is nothing more
important than being able to choose who will care for their
children, and the type of environment in which they leave their
children. While blanket childcare subsidies will be available
to almost every family, they will not allow families to choose
the providers that work best for them. As envisioned,
Government childcare subsidies will go to childcare centers
that comply with a litany of costly and unnecessary childcare
regulations, such as childcare teachers needing to have a
college degree, Government bureaucrats imposing wage and
compensation mandates on childcare providers, childcare workers
being unionized, and the environments and curriculums mandated
by Government standards instead of parents' preferences.
Parents have very different preferences for childcare.
Many--especially lower-income and Hispanic parents prefer for a
parent to stay home with children. By definition, families that
choose to have a parent stay home will have lower incomes.
Families who sacrifice earnings to care for their own kids
should not also have to sacrifice more income to pay for the
care of other families' children. It would be far better to
make it easier for families to pursue childcare and work
arrangements that are best for them than to impose a blanket
policy that would disproportionately benefit wealthy and
affluent families.
Q.9. Would you think a family's ability to borrow against
themselves, like borrowing from their future child tax credit
refund to use as a childcare voucher, would allow them more
freedom/flexibility to choose a childcare program that best
suits their needs? What other options should families have
available to them to help pay for childcare?
A.9. It would seem, economically, that having the option to
borrow against a once-a-year tax credit would help families
manage their weekly and monthly childcare expenses, but there
are some barriers that would prevent such an option from being
as effective as desired. Families can be understandably weary
about borrowing against a future Government benefit; the
paperwork and bureaucratic process would deter many; and issues
surrounding the legal custody of children could limit the
availability of such funds, as well as add to complications and
improper payments.
Instead of providing child payments to virtually all
families--without work requirements and extending payments to
very high-income families--a more effective way to provide
families with the resources they need to care for their
children, and to teach them the importance of work, would be to
let parents keep more of the money they earn--through broader-
based and lower-rate taxes.
Q.10. Do you believe the childcare system needs to be better
connected to the actual needs of the local workforce and
community?
A.10. Yes. What works in a big city like Washington, DC, where
most jobs are information-based, the costs of living are
extremely high, and most families have all parents in the
household working is unlikely to work in rural Kentucky where
jobs like coal-mining and farming have less regular schedules
and more parents choose family-based care for their kids.
Heavily subsidized, Government-directed childcare programs may
meet the desires of upper-income urban families, but what is
needed in more rural areas with unique industries is more
small, in-home family and church-based childcare providers that
can offer more flexible schedules at lower costs.
The pandemic showed that local governments are best
equipped to address the childcare needs of their communities.
Not only are local and State governments the ones that
determine childcare regulations, but they have personal
interactions with their residents and business owners that help
them know how best to meet their communities' needs. During the
pandemic, communities such as my own provided targeted funding
to childcare providers, noting the importance of preventing
permanent closures. Because local governments regulate
childcare providers, they already had their information on hand
and were able to get the information out to these providers
quickly, and to provide assistance in navigating the
application process. Meanwhile, the Federal funding proposed in
the so-called infrastructure package would come with so many
strings attached that they would be effectively out of reach
for smaller childcare providers. For example, providers would
only be able to hire childcare teachers who have college
degrees, their curriculums would be mandated by Federal
bureaucrats, and even just accessing Federal funds for
facilities improvements would require childcare providers to
comply with ``prevailing wage'' laws that dictate the pay and
benefits that must be provided to contractors who perform
facilities improvements.
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RESPONSES TO WRITTEN QUESTIONS OF SENATOR KENNEDY
FROM ABBY M. MCCLOSKEY
Q.1. Senator Cassidy (R-LA) and Senator Sinema (D-AZ) have
introduced a bipartisan proposal to assist working families
with paid leave or childcare expenses. Question: Do you think
pushing childcare reform through without bipartisan discussion
will solve the childcare dilemma in the long-term?
A.1. It is essential that working families rely on sustainable
childcare and paid leave policies that will not change
depending on the political makeup of Congress or the
Administration. I applaud Senators Cassidy and Sinema for their
bipartisanship and hope that more Senators engage in similar
efforts.
Q.2. What areas of childcare and paid leave policy proposals do
you believe Democrats and Republicans could compromise on the
most and why?
A.2. In terms of childcare, Democrats and Republicans should
come together to support an expansion of the Child and
Dependent Care Tax Credit (CDCTC) for low and middle-wage
workers. High childcare costs are a barrier to work and thus a
barrier to financial independence and upward mobility.
Additionally, the literature has shown that high-quality
childcare is particularly important for economically
disadvantaged children's cognitive development. A CDCTC
expansion should support a wide variety of early childhood care
and educational opportunities, including in-home providers,
religious providers, and center-based care as opposed to a one-
size-fits-all public program. In this sense, the CDCTC can be
thought of as a massive school choice or voucher program for
early childhood education.
In terms of paid leave, I believe that Democrats and
Republicans should come together to support a Federal paid
parental leave policy. A Federal paid parental leave policy
would deliver significant economic and health benefits to
parents and infants at a fraction of the cost of a broader paid
leave policy. An 8-week paid parental leave policy has been
modeled by the AEI-Brookings Working Group on Paid Leave (which
I was a part of) and could be paid for in part by reorganizing
existing spending.
While some policymakers have proposed a broad paid leave
policy--inclusive of parental, family, and medical leave--the
literature is most robust on the benefits of paid parental
leave, or paid leave upon the birth or adoption of a child. The
increase in workforce attachment, health improvements for
mothers and children, and decrease in welfare dependency are
all specific to paid leave for new parents. The rest of the
world treats paid parental leave differently from medical or
family leave. Combining paid parental, family, and medical
leave into a one-size-fits-all 12 week policy significantly
expands the cost of the program, gives rise to the potential
for significant and repeated business interruptions, and has
stymied bipartisan cooperation on the issue.
Q.3. How can current Government funded programs be changed to
better align with families' needs and kids' well being?
A.3. There are many overlapping and duplicative Government
offsets for childcare, including but not limited to block
grants to States, tax credits to employers, and tax credits to
workers. New programs should seek to rationalize the existing
landscape of Federal and State policy to prevent duplication,
waste, and overlap. For example, an expansion of the CDCTC
could be paired with a streamlining of existing policies. In
our AEI paper, ``Improving Economic Opportunity for Women'',
Aparna Mathur and I propose substantially increasing the amount
of the CDCTC and making it refundable. This would reduce the
need for block grants and employer-sponsored tax credits,
making childcare support available regardless of employer
options or State policies. While all of us would appreciate an
offset in childcare costs or a child allowance expansion, it is
particularly important for low-income and disadvantaged
families; this suggests that we should have a relatively tight
income limit on tax credit eligibility.
Q.4. Shouldn't we prioritize maximizing options for parents
rather than applying this blanket, one-size-fits all approach
to childcare?
A.4. Yes. Indeed, maximizing family choice should be a guiding
principle for childcare reform. Each family's values and needs
are different. We should seek to maximize choices for families
both for parental care as well as for care providers outside of
the home. Options for care outside the home can be increased
through an expansion of the CDCTC, which in essence functions
as a large choice program for early childhood care. Options for
care inside the home by parents can be increased by boosting
wages for workers through an EITC expansion and economic
growth. Higher wages would provide families with more
flexibility to scale back hours or have one parent stay home if
that's what they wanted to do.
Q.5. Would you think a family's ability to borrow against
themselves, like borrowing from their future child tax credit
refund to use as a childcare voucher, would allow them more
freedom/flexibility to choose a childcare program that best
suits their needs? What other options should families have
available to them to help pay for childcare?
A.5. It makes sense to increase the flexibility of existing
Government programs where possible. The expenses for children
are highest when they are 0-5 years old, when there are work
interruptions from childbirth, childcare is most expensive for
infants, and before a child is old enough to be in elementary
school. Additionally, investments made early in a child's life
are likely to have a greater return than those made later in a
child's life, as has been modeled by Nobel-prize winning
economist James Heckman. Thus, allowing families the choice to
access more funding up front makes good economic sense.
I also support offsetting the cost of childcare directly
through an expansion of the CDCTC.
Q.6. Do you believe the childcare system needs to be better
connected to the actual needs of the local workforce and
community?
A.6. Yes. Childcare needs and costs vary widely. This is why
it's important to allow for the proliferation of a wide variety
of care providers instead of a one-size fit all option. It is
also why it is important to increase the opportunities for care
providers based on local needs. Multiple States--including West
Virginia, Pennsylvania, and Colorado--have begun to implement
registered apprenticeship programs for early childhood
educators. These programs provide early childhood educators
with on-the-job training and a career pathway to improve their
knowledge and skills. They create more opportunities for
workers to move into roles of greater responsibility and pay, a
virtuous cycle resulting in higher quality care. They can also
be tailored to the specific needs of the community and offered
in tandem with community colleges and local employers.