Saturday, December 4, 2021

A pandemic aggravated childcare crisis hampers the broader economy

SEATTLE (AP) – After Brian Kang’s son was born in July, an occupational therapist and his wife, a teacher, began looking for childcare in the Los Angeles area. The couple called eight kindergartens: some had not been stained in months; others stopped answering their calls, and some did not answer at all.

So, with no viable options, Kang tried to find a new job that would allow him to work remotely.

“I told my manager, ‘Hey, I have to leave by the end of the month,” Kang said. “They were very supportive and understanding because they are all mothers. But now there is one less patient visit. “

Kang said he was lucky to find a job teaching online classes, but an unexpected career turn forced him to cut his salary by 11%.

In truth, even if he could find a place to day care for his 3-month-old son, the monthly cost of caring for a $ 2,500 baby is so high that he could work a lower-paying job from home and take care of the children. a child is the most financially sensible business.

PBS NEWSHOUR SPECIAL OFFER: Raising the Future – Child Care Crisis

The childcare business has operated for years in an unstable, paradoxical marketplace: low wages for workers and high costs for consumers. Yet the mission-critical service somehow managed to limp.

The pandemic has now clarified what many experts have long warned about: the lack of reliable, affordable childcare restrictions that people can agree to makes it difficult to climb the corporate ladder and ultimately limits the growth of the economy as a whole.

“Early learning is no longer seen as a problem for women or children. This is really an economic issue. It’s about labor force participation, ”said Mario Cardona, policy manager at Child Care Aware of America. “This is about employers who don’t have to worry about whether they can rely on employees.”

Child Care Aware estimates that 9 percent of licensed child care programs have been permanently closed since the pandemic began, based on nearly 16,000 closed centers and home-based day care centers in 37 states between December 2019 and March 2021.

Now, every teacher resignation, coronavirus infection and kindergarten closures show that the industry is on the brink of collapse, with far-reaching consequences for the workforce across the economy.

The national crisis has forced many people – mostly women – to leave their jobs, making the childcare crisis a problem not only for parents of young children, but for everyone who depends on them. This led to a shortage of labor, which in turn damaged businesses and made it difficult for customers to access goods and services.

“The decisions we make about childcare affordability today will shape the US macroeconomy for decades to come, influencing who returns to work, what jobs parents choose, and what career paths they can take,” Betsy said. Stevenson, Child Care Specialist. economist at the University of Michigan.

President Joe Biden has pledged to drive an unprecedented increase in federal spending in hopes of fixing the kindergarten market. In a recent town hall in Baltimore, he reassured parents that they “will not have to pay more than 7 percent of your income for childcare.” Federal money will go directly to care centers to cover costs in excess of the 7 percent limit. This means that the average US household earning $ 86,372 would pay $ 6,046 per year for childcare.

WATCH: Biden promotes childcare investment to help working families

Biden’s plan also includes a one-stop kindergarten that can further reduce childcare costs for families. The $ 1.9 trillion increased monthly child tax credit approved in Biden’s coronavirus relief package will be extended for another year. The president also proposed increasing the child care tax credit, which should help improve access for families.

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The Congressional Budget Office has yet to calculate the costs, as measures are still being discussed ahead of Biden’s departure on Thursday for the G-20 conference in Rome. But Donald Schneider, a former chief economist at the Home Ways and Means Committee who now works at consultancy Cornerstone Macro, estimates that childcare and preschool support will cost $ 465 billion over 10 years. The annual price of the Extended Child Tax Credit will be about $ 120 billion. The loan will cost an additional $ 940 billion if extended for another nine years.

It remains to be seen what will survive the tough congressional negotiations over Biden’s broader family services agenda, but the pandemic is proving to be a crucial catalyst for the future of the childcare industry.

At Forever Young kindergarten in the Seattle suburb of Mountlake Terrace, Amy McCoy quickly burns out.

She spent half of this year trying to hire a new home care assistant, but until then, the former public school teacher works 50 hours a week, taking care of the children herself, and is more involved in cooking, cleaning and necessary administrative work. run your business.

“At what point will my kindergarten become more important than my own family?” McCoy asked.

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One of McCoy’s assistants, who worked there for five years, quit his job for $ 19 an hour in favor of a nanny for $ 35 an hour. McCoy posted an entry-level assistant job on Indeed and Facebook, offering $ 16 an hour – nearly 20 percent more than the state’s minimum wage. She received few responses, and everyone abandoned her because of the paycheck, which made it impossible to hire without raising tuition fees.

“Nobody wants to work for what I can afford right now,” McCoy said. “I absolutely believe these are $ 20 an hour employees, but I hate that, and I will most likely have to raise my tuition fees.”

The US Treasury Department noted in a September report that childcare workers earn an average of $ 24,230. More than 15 percent of industry workers live below the poverty line in 41 states, and half of them require government assistance. The sector has a high turnover rate, with 26 to 40 percent quitting each year. There is also no room for kindergartens, which tend to operate at 1 percent or less profit margins.

In nearby Edmonds, Briana McFadden closed her business, the Cocoon Child Care Center, last month due to the stress of the pandemic, although McFadden thinks she would have continued if there were government subsidies to stabilize the industry.

In her 12 years in the business, McFadden said she never raised tuition fees and was a rare kindergarten in Seattle’s wealthy northern suburbs, accepting low-income families on a government subsidy. In pre-pandemic times, Cocoon employed seven people to care for 37 children. Now McFadden plans to open a convenience store.

“It really wasn’t worth continuing,” McFadden said in a voice shaking with emotion. “Daycare is hard work.”

Tatum Russell’s livelihood depended on McFadden’s daycare as much as she depended on the restaurant where she handcrafted seafood.

During the closure of the kindergarten due to COVID-19 in August, a single mother could only combine assistance from relatives for a while. In the end, Russell had to skip four days of work.

“It was a nightmare and it wasn’t over yet,” Russell said.

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