The Hope at the Bottom of the ‘Child Deva Cliff’

I had a fantasy that after the child care disaster of the past couple of years, there might be a more permanent, federal-level change in financial support for the sector. It did feel, for a little while, as if politicians were finally paying attention to the decades-long problem. In September 2021, Treasury Secretary Janet Yellen said “Child care is a textbook example of a broken market,” one that really isn’t working for caregivers, parents or children. That year, Congress passed the American Rescue Plan Act, which provided funding to help stabilize the child care market, which at the time was in something of a free fall.

Two years after Yellen’s searing remarks, we’re about to fall off a “child care cliff,” as $24 billion allocated for child care grants is set to expire at the end of this month.

As the Century Foundation puts it, “When these resources swiftly and suddenly disappear, this funding cliff will once again place the sector in danger, as it will be forced to contract, shedding caregivers and care slots in a cascade that will not only upend millions of families’ child care arrangements but also hurt regional economies.” Century estimates that over three million children could lose their child care spots, and though it certainly won’t happen overnight, it could be a kind of slow-rolling financial mess for many parents and providers.

Pointing out that the current state of child care causes many parents to feel broke and anxious doesn’t seem to make that much of a difference. Whenever I write about this, the feedback I get is that people shouldn’t have kids they can’t afford in the first place and that it’s not the government’s job to help them with their luxury lifestyle choices (I’m paraphrasing). Talking about the strain that it puts on child care providers — who may have to raise tuition, cut staff wages and benefits, and serve fewer children after the funding stops, according to an analysis by my newsroom colleagues — doesn’t seem to move the needle either. Some people don’t seem to be convinced that the health and well-being of our nation’s children should be a collective priority.

So I called Kathryn Anne Edwards, an economist and economic policy consultant, to see if there’s an argument that might change people’s minds about the utter necessity of more robust government child care funding — or if I should lose all hope in the possibility of a shift in the way that child care is thought about, discussed and sustained in the United States.

Edwards told me she thinks ultimately we’ll see better funding for child care, and she somewhat cheekily described the argument for that to me as: “Why you should want child care even if you hate women and their children.”

We might not see change before the funding runs out this month, but in the longer term, “two things are going to force Congress’s hand whether they like it or not,” Edwards explained. The first is that “U.S. labor force participation is midway through a historic decline. And unless Congress wants to increase immigration on an order of magnitude of three to five, they need more workers domestically, which means they need women to work more.”

This is mostly because baby boomers are retiring, and though Edwards says we can get them to work a few more years around the margins, “we cannot turn back the tide.” There are simply not enough millennials to make up for it by the numbers, because prime-age women’s labor force participation is too low. In Edwards’s phrasing, it “has been frozen in time for 25 years.” When you see headlines about how we’re at all-time highs for women’s labor force participation, Edwards suggests, that’s misleading. When you look at the actual level of increase since the 1990s, labor force participation among women has barely budged, and without a policy shift, we shouldn’t expect it to go up much in the coming years.

The second thing that could force Congress to act on child care is that the birthrate is on the decline in the United States, Edwards said. It has been since the Great Recession, and though there was a slight uptick in the birthrate in 2021, it plateaued in 2022. There aren’t enough babies to make up for the number of workers retiring and the number of working adults needed to keep Social Security solvent. Without legislative action, the Peter G. Peterson Foundation has projected that after 2034, Social Security benefits may need to be reduced by 20 percent.

“At some point you have to address the thing that sits at the nexus” of fertility declines and labor force participation, Edwards said. The cost of child care “is the No. 1 reason that parents with children currently say they don’t have another kid,” and it’s the reason many women are pushed out of the work force. As Edwards has noted, a lack of child care will have a ripple effect on a number of professions, including nursing and teaching, which are heavily female workforces and are already facing labor shortages. Maybe you don’t have school-age kids, and don’t intend to, and therefore teacher shortages don’t move you — maybe you just don’t care all that much about kids — but it’s a potential negative for everyone when nurses are in short supply.

Some states — both red and blue — are already stepping in where the federal government is falling short, said Julie Kashen, a senior fellow at Century. “We’ve seen that business disruptions due to child care disruptions can have a huge impact on productivity,” she said, so if the federal government doesn’t make changes to child care funding this year, states may have no choice but to allocate more of their budgets to filling the gaps.

I wish that arguments about how all children deserve safe care, in environments in which they can flourish, would sway more people. I wish more people simply thought of child care as something that benefits the nation as a whole. But as those arguments repeatedly founder, maybe the cold economic case for fixing this failed market will work. Because the gerontocracy might not care so much about children, but they sure do care about Social Security.

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