Why Investing In Child Care Is A Win For Our Economy
Updated: Dec 14, 2020
Welcome to my weekly Q&A roundup. (Scroll down to find the Q&A.)
If this is your first time here, welcome. I spend a fair amount of time speaking at events and conferences. At the end of my presentations, I leave space for audience members to ask questions—tough questions, brave questions, you name it.
The level of candor and curiosity always inspires me, and I want to share that sentiment with you. So each week, I pick one question that I believe others would find most instructive and publish my response to it here.
The purpose of this weekly tradition is transparency and inclusivity.
• Transparency: a behind-the-scenes look at my day-to-day.
• Inclusivity: bringing others along in the journey.
The Economics of Child Care: Whose Responsibility Is It?
It’s great that large corporations have started providing child care stipends and services for working parents. But what about the parents who work for SMBs and startups?
You’re right. It’s great to see large corporations stepping in, and up, to fill the child care gap.
Take life insurance provider John Hancock for example. In July 2020 they launched a virtual four-week summer camp (think: penpals, scented rainbow bubbles, STEM activities) with the explicit purpose of helping their employees’ children learn, move, and have fun in the absence of a normal summer vacation.
Then there’s Bank of America (whose CEO Brian Moynihan, by the way, developed a standard set of KPIs to measure stakeholder capitalism—a fascinating topic that I wrote about here). The bank has agreed to reimburse parents up to $100 per day for child care until the end of 2020.
We should applaud the companies that are making efforts to lighten the load for parents. We know it’s a heavy one. However, let’s remember why they are providing these services in the first place.
The Lack Of Adequate & Affordable Child Care In The US
COVID didn’t create a child care crisis—it exposed it. Pre-pandemic, 83% of parents with children under the age of five had difficulties finding affordable, quality child care in their community. It resulted in professional setbacks for parents, moms especially, who were 40% more likely than dads to report feeling the negative impact of child care issues on their careers.
Over the past 20 years, the trouble of finding affordable child care has led to a 13% decline in employment for mothers with young children. With the arrival of COVID, 43% of parents working remotely and 49% of parents working from the office are without adequate child care.
When parents with minor children make up one-third of our nation’s labor force, it’s time to think differently about child care. We need to start viewing child care as an investment in our economy (a public good) with a measurable ROI.
Child Care Is An Economic Investment
Our economy relies on working parents—moms included. The data tells the story:
- $2 trillion: the amount we’ve added to national GDP since 1970 as a result of women’s increased labor force participation. There’s still another $2 trillion on the table if we achieve gender equity.
- $12.7 billion: the amount businesses lose annually due to their employees’ challenges in finding child care.
- $57 billion: the total cost of lost earnings, productivity, and revenue due to the child care crisis.
- 12: the percentage point increase in labor force participation of Washington D.C. mothers with young children after the city started offering two years of free universal public preschool.
- 55: the percent of parents who have worked overtime to afford child care.
- 56: the percent of parents who have reduced spending on every-day purchases to afford child care.
- 57: the percent of parents who believe federal and state governments have the highest level of responsibility to keep the child care industry financially solvent through COVID.
- 71: the percent of families who depend on mom’s earnings for their economic well-being.
Large-scale policy reform won’t happen overnight. However, and in the spirit of Justice Ginsburg, we can all make incremental changes toward a more equitable future and inclusive economy.
In The Meantime, How Can We Support Working Parents?
If child care stipends and tutoring services aren’t feasible for your company, that’s okay. How about starting with what you have. Do you pay and promote your working parents (particularly moms) equitably?
Over half of moms with kids under the age of 18 work full time, yet they earn only 70 cents for every dollar fathers earn. And yes, you guessed it—it’s worse for non-White moms. For example, 85% of Black families rely on moms’ wages for their economic security, meanwhile Black moms earn 54 cents on the White father’s dollar.
Ensuring pay and promotion equity will help prevent moms from being edged out of the workforce by rising second shift demands. That’s because:
Their pay is secondary to men’s as a result of gender equity holding moms back, or
Their pay is considered secondary to men’s because of outdated gender narratives, and
Women (regardless of employment status) continue to shoulder the burden of unpaid labor
Businesses want to do right for their employees. 2020 proved this. We are only beginning to break down the barriers on our journey to a more inclusive economy. Will we encounter speed bumps or flat tires on the way? Yes, and we will keep pressing on.
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