Treasury report shows childcare crisis hurts children, parents, economy

The Treasury Department just released a report detailing what all non-wealthy parents in the United States already know: The state of child care in the United States is appalling.

It’s too expensive, often hard to come by, reliant on underpaid women of color, and puts a severe strain on family finances and the economy as a whole.

“It is high time we treated child care for what it is – something whose contribution to economic growth is as essential as infrastructure or energy,” Treasury Secretary Janet said. Yellen. “This is why the Biden administration has prioritized the Build Back Better proposals, many of which are now going through Congress. Implementing them is the most important thing we can do to build a stronger economy over the coming decades. “

According to the report, the average family with at least one child under the age of 5 spends 13% of their family income on childcare. That’s a lot of money. Less than 20 percent of children are eligible for the Child Care and Development Fund, one of the largest federal programs for child care programs in the United States, actually receive the funding.

A major problem is that child care providers have very slim profit margins. This keeps the pay of providers, who are disproportionately female and non-white, low. Many educators have to survive on government benefit programs, such as food stamps, for a job that is not easy. These constraints lead to high turnover, understaffed centers and increased pressure on the social safety net when they must rely on public services to supplement low wages.

Young parents don’t have a lot of work experience and often make mortgage payments and / or student loans every month. The sudden huge expenditure on childcare is adding further strain to family finances as data from the Treasury shows it takes up to almost a decade after the birth of a family’s first child to recover. It’s been a lot of years that families haven’t been able to put as much money into the economy as they would otherwise, an effect that’s multiplied by parents giving up a paycheck that would just go. daycare and decide to stay home with the child.

Beyond the financial benefits, the report points out that “many researchers have found that children who attend early childhood education and care programs stay in school longer, commit fewer crimes, and stay better. health throughout their life ”. Having more adults attending quality early childhood programs would ease the collective burden on many sectors of society.

The Biden administration’s solution to these problems is to spend money to expand the supply of affordable, quality child care through these measures:

• The Child Care Program for American Families, which would fully cover child care costs for the poorest families and ensure that those earning up to 1.5 times their state’s median income do not pay more than 7% of their income for child care
• The Child and Dependents Tax Credit, which currently expires at the end of the year, provides $ 3,600 per dependent under five ($ 3,000 per dependent over five) and allows parents to deduct certain childcare expenses from their taxes
• New Business Tax Credit to Build Workplace Day Care Centers, Half of $ 1 Million in Construction Costs Each
• The Universal Kindergarten, which basically ensures that all 3- and 4-year-olds receive free childcare
• Universal paid leave, which makes it easier for parents to fill gaps in the child care system (i.e. many centers will not care for children under six weeks old)

The ultimate fate of these proposals is uncertain thanks to the so-called moderate Democrats whose votes are needed to get anything through. But the report makes it clear that the situation is dire and that anything but dramatic action will harm children, parents and the country as a whole.