Moneybox

How We Can Solve the Child Care Crisis

We can’t reopen the economy without fixing this first. So think of it as a long-term investment.

A sign reading "Slow. Kids at Play" is seen hanging on a multicolored fence in front of a suburban house.
Jackie Mader/the Hechinger Report, USA Today via Imagn Content Services, LLC

“Economists have often treated work decisions in isolation from family decisions. But there’s no way to separate your life like that. Everything is really intertwined.” So says Betsey Stevenson, a professor of public policy and economics at the University of Michigan, a former economic adviser for President Barack Obama, and a mom. Stevenson has always been interested in the ways work and family intersect, including and especially child care. Now, with the coronavirus, work and family are not just intersecting—they’re braided together. The pandemic has exacerbated the struggle parents have juggling both their kids and their careers. On Thursday’s episode of What Next, I spoke with Stevenson about the child care crisis, how the relationship between work and family life was untenable even before the pandemic, and how we can fix all this. Our conversation has been edited and condensed for clarity.

Mary Harris: I’m wondering if you can talk a little bit about how you see the tone of the conversation around women and work and child care shifting during the pandemic.

Betsey Stevenson: I think, for the first time that I can remember, the entire country is having to realize that child care is not a personal issue, and it’s not a women’s issue—it’s an economic issue. Tens of millions of kids who need care and they all have parents. Tens of millions of people who leave their jobs, who stay home, who take jobs where they produce less than them or are less satisfied or work less. All of that will add up to an economy that doesn’t recover anytime to where it was before we went into this pandemic.

The pandemic has walloped the child care sector. Some day care providers are closed. And, like other small businesses, they might not be able to open back up when this is all over. So even when the economy is ready to get back to normal, families won’t be.

I’ve heard from child care centers that say, This is really important, we’re struggling to survive, we might not. I think all the discussion of a V-shaped recovery is bananas to me because it’s missing this thing that’s happening to our kids and families and child care infrastructure. There is no way we flip the switch and go back if the child care isn’t there. Anybody who has ever tried to put their kid in child care knows how hard it is to find a slot at a facility that you feel really comfortable with, that you feel is going to serve your child’s needs well. I was on a wait list for years at my preferred child care center. And I actually never got in, and ended up using a nanny. That’s a pretty privileged position. But as we have child care centers close, there are going to be fewer and fewer slots. There are going to be more people on the waiting list. I know people who didn’t get child care slots and didn’t go back to work as a result. If that was already happening, imagine what happens if even 10 percent of our child care slots disappear.

You’ve said clearly that you think the only solution here is government spending. But I want to talk a little bit about the history of how the government has thought about child care. What’s interesting to me is that it’s not that we haven’t thought about this before. It’s just that whenever we start up something that looks like universal child care, or child care for most or for all, we get stymied. Do you know the history there? My understanding is that one of the first times the United States considered it was back in World War II.

The idea was that we wanted women to get into the workforce because we sent all the men who were running the factories to war. And somebody had to run the factories. So, we had the law popularly known as Lanham Act, which provided child care to mothers who were employed for the duration of the war. There was really an incentive for women to work during the war.

When you read about these child care centers from back in WWII, your jaw drops because of these little details: Grocery shopping would be done for you while your child was in day care and you’d pick up your groceries along with your child. That was available.

It really was done in conjunction with the defense industry, and all families were eligible for child care for up to six days a week, including summers and holidays. But in addition to being very affordable for parents, it was actually high-quality. There’s a study by this economist named Chris Herbst that showed the benefits from this act were much broader than only for parents and for kids.

You mean it benefited the economy.

Yes. An additional hundred dollars in Lanham Act funding increased high school graduation rates by 1.8 percentage points, college graduation rates by 1.9 percentage points, and overall employment of these children by ages 44 to 59 by 0.7 percentage points. And it overall increased those kids’ lifetime earnings by 1.8 percent. So child care was provided, but it didn’t just put the women in the factories. It actually had lifetime benefits for the kids who got that great opportunity. The thing that’s always struck me about child care is that it pays for itself. If you were a kid today, you would be better off if the government took out a loan that paid for your high-quality child care, and you paid it back out of your wages as an adult. You would still earn more money, consume more, and have a higher quality of living as an adult,.

After this child care went away following WWII, the idea of more child care came up again in the ’70s. Richard Nixon actually vetoed the idea after Congress passed it. I heard this interview with Pat Buchanan. His way of explaining that was, well, If we had done that, we would have ended up with this entitlement program that would have been very hard to get rid of, we would have spent so much money on it, and that’s something we would’ve still been spending money on today.

The money we spend on investing in early childhood education, which child care is part of, when you send your kid to a high-quality child care program like the Lanham Act provided, they’re also providing a curriculum that helps children start to develop the skills they’re going to need to keep developing over their lifetime. I think people get confused. They’re like, what kind of skills does 2-year-old need—they need to color? Well, actually, yeah, that’s important. They need to learn how to hold a crayon, they need to start to learn how to express themselves, and they need to develop their creativity. Creativity is one of the most important skills in our modern economy. What we see is when you put kids through those types of early childhood child care centers that build skills, the kids come out with a broader set of skills and are more productive. They also come out as more cooperative members of society, less likely to participate in crime, less likely to be violent, less likely to to have learning-related issues that we then spend more on in through K–12 education. So there are linkages here. We’ve already agreed we’re going to provide an entitlement to K–12 education. A lot of people think of that as an entitlement program. I don’t. It’s investment. And I think we need to be thinking about child care in the same way.

Congress did just pass two bills. I mean, passed in the Democratic-led House, so who knows what will happen in the Senate. But I was looking at them a little bit to try to understand how legislators are thinking about child care in this moment. And they’re what you would expect: grant money for child care providers so they can survive, a tax credit for families and child care providers. I looked at that and wondered, is this going to move the needle at all? What do we actually need to be doing if we are going to really address the problems we have here?

We need a massive investment like we had in WWII. If we’re not going to do that, do something, anything more than what we’re currently doing. We’re doing so little. It’s just mind-blowing. Right. The idea that we can come up with $50 billion for airlines and $3.5 billion for all of child care, just, where are our priorities?

I wonder if you could just tick off your priorities if you were writing the COVID legislation that would address working families the way you think they needs to be addressed.

I would massively increase funding for schools. We’re going to need to spend more money on education because if kids are not really doing school for almost an entire year, the amount of work we’re going to have to do to bring these kids back up to speed is going to be huge. I’m very worried because state and local governments are facing huge revenue shortfalls. That means we’re gonna move in the opposite direction, letting teachers go at exactly the time when we probably need smaller classes so kids get more individual attention because of the fact that they’re going to be coming from very different places. This is thinking about what the kids are going to need over the next four or five years. And then there’s thinking about the parents. There are a lot of parents who are either going to take time out of the labor force, cut their hours, pass up promotions. And I think we need to be providing incentives for companies to bring people back who quit or cut their hours because of child care issues.

I saw this tweet recently that was directed specifically at women. It said, women, if you are thinking about leaving your job to take care of your kids, I would take under consideration just working less—channel the energy of that guy at work who’s doing the bare minimum. I thought there’s a wisdom in that. I wonder if you would agree.

I think that’s absolutely right. It is way better to just barely tread water than it is to step out in terms of your long-run outcomes—there are so many people who do that at work for no good reason. If you’re doing it for good reason, no guilt, you’re doing the best you can. And honestly, I don’t think your company and co-workers would necessarily be worse off if you’re just doing the bare minimum. Would they prefer somebody who goes all out? Absolutely. But we can’t go all out all the time. If that’s an option for you, if you can cut your hours rather than quit your job, you’re better off. If you go to your company and say, look, I need to go to 60 percent time, and they say, OK, that company is going to be more likely to let you go back up to 100 percent time. You’re still going to struggle to get the same kind of promotions and opportunities but not, like, having completely left the labor force, starting from scratch, trying to find a new employer. I think there are going to be obviously a lot of people in this situation where that gap on your résumé is going to be a COVID/home-schooling gap. So it’s going to be a lot easier to explain in an interview. I think that will help.

Listen to the full episode using the player below, or subscribe to What Next on Apple Podcasts, Overcast, Spotify, Stitcher, or wherever you get your podcasts.