It’s a busy month in Washington, with deadlines on debt ceiling and government funding. In addition, there are the continuing efforts of the Joe Biden administration to get Congress to pass this major infrastructure bill and a budget reconciliation package that includes more of the “human” infrastructure agenda.
To push this latest step forward, the Treasury Department released a study on the child care industry on Wednesday, saying the system is fundamentally in a state of market failure, with significant consequences for the overall economy.
Just about any parent who was on a waiting list for a child care center has experienced these economic hardships.
“I think he was in a state of market failure before the pandemic. And I think it’s in a state of market crisis now, ”said Gina Adams, a senior researcher at the Urban Institute who has studied child care for years – and a relative herself who’s been studying child care for years. is occupied with it.
“The market failure is that we rely on parents to pay most of the cost of child care, but to provide good quality child care far above what many parents can afford,” a- she declared.
A typical family with a child under 5 pays 13% of its income for child care, according to Catherine Wolfram, acting assistant secretary for economic policy at the US Treasury, who wrote the report. She said that for many the cost is inflated.
“Child care comes at that time in life when your income is low and you cannot borrow for the future. And so, economists describe this as a liquidity constraint, ”she said.
It is a constraint that keeps the demand for care high, but “when parents cannot pay more, programs have no choice but to keep wages low or not provide the kinds of quality care. that we know to be good for children ”.
“And during the pandemic,” said Hannah Matthews of the Center for Law and Social Policy, “it became very clear that they struggled to stay afloat. We saw tens of thousands of vendors shut down.
Many economists warn that exacerbating a child care shortage is preventing people, especially women, from working or returning to work.