Employers and lawmakers often overlook a key component of our economy.
Child care.
As the pandemic’s shockwaves roiled the workforce, we suddenly had children with nowhere to be during the day.
If there’s no one to watch a child during the day — whether it be a family member or a child care provider — that duty falls back on a parent. And when it falls on a parent, we usually lose one person in the workforce.
Baby Boomers were already expected to exit the workforce en masse around this decade anyway, but COVID-19 has accelerated that for many.
Whether concerned about dying from COVID or simply fed up with COVID, every retirement-age worker who bows out at 65 instead of working until 67 or 70 further exacerbates the labor shortage.
Who replaces old workers? Young workers.
But many young workers are likely to be parents with small children at some point in their work career, which presents a limiting factor. Either you find child care or a parent needs to stay home.
While it’s perfectly reasonable to want to raise your kids yourself, doing so foregoes additional household income for that family and denies one worker to the labor force.
With child care available, a parent who wants to work but currently can’t might enter or re-enter the workforce.
The American Rescue Plan has been beneficial on this front in two ways.
First, the Act, Build, Learn, Grow Stabilization Grants are helping to stabilize child care centers and boost wages for child care workers, who, on average, are low earners.
Those grants strengthen providers to maintain or potentially grow their capacity.
Second, the federal government is also making Build, Learn, Grow Family Scholarships available; these scholarships can cover up to 80% of the cost of tuition per child for low-income individuals; they offer 20% reimbursement for higher earners.
That kind of assistance defrays the weekly cost of child care, which can cost more than $200 per week depending on the location, and widens the earnings potential a family can realize by going to work instead of providing child care at home.
More money in the household helps reduce the chances the child will suffer from poverty, food insecurity and other problems related to income. Households with more purchasing power help our economy.
Early childhood education — whether from infancy to kindergarten or starting in preschool — also prepares children for their K-12 education and sets them on a path to higher achievement long-term than children who don’t receive education before kindergarten.
Therefore, investment in child care produces both short-term benefits— more people in the labor force — and long-term benefits — potentially better-educated and better-skilled workers post-high school.
The current boost in child care support is only temporary. Like the child care credit payments that expired in December 2021, these American Rescue Plan supports are only funded through summer.
Now would be a good time for state and federal lawmakers to review, discuss and better understand the role that child care plays in the overall economic puzzle.
Carefully considered, long-term investments in child care can maximize labor potential, improve education for youth and contribute to a more skilled workforce in the future.
© 2024 KPC Media Group, Inc.