The U.S. is facing an ongoing “crisis of care” — a child care crisis — exacerbated by the coronavirus pandemic and ensuing economic fallout.
Women were among those hardest hit by job losses as a result of COVID, with over 5.4 million net jobs lost between February 2020 and January 2022. At the same time, the cost of child care has been steadily rising in part due to inflation.
“Child care is one of the biggest challenges for women in the workforce,” Mark Suzman, CEO of the Gates Foundation, told Yahoo Finance Live (video above). “It is one of the reasons why job losses during COVID were disproportionate to women. It is not just the economic gap — it's also that they are more likely to leave the workforce when you have challenges like COVID because there are more child care needs.”
Over the past year, child care has gotten more expensive for 63% of parents, according to Care.com's 2022 Cost of Care survey, which also found that 51% of parents are spending more than 20% of their household income on child care, and 72% of parents report spending 10% or more. These numbers are higher than pre-pandemic levels in 2019.
On top of that, COVID had a notably disproportionate impact on women of color, especially Latina and Black women, "often due to the pandemic-driven erosion of child care," said Dr. Sandra Bishop, chief research officer at Council for a Strong America, told Yahoo Finance. "For example, Black mothers’ labor force participation declined at a rate more than double that of white mothers."
Bishop also noted that it's not just households affected by rising costs — child care workers are impacted as well, as 97% of child care workers are women and about 43% are women of color.
Younger parents, single parents, and/or LGBTQ parents were also badly affected. LGBTQ families were reported to experience “severe financial hardship and hunger,” due to child care problems, according to a recent analysis by Center for Economic and Policy Research.
In June 2020, 38% of millennial mothers surveyed by the Census Bureau said they were unemployed due to child care issues whereas the number was as low as 16% among fathers.
In 2021, the U.S. was ranked the second-most expensive country for child care for a single parent, whereas many European countries like Germany, Italy, and Greece had up to just 1% of net income expenditure on child care per single-parent household, according to the Organization for Economic Co-Operation and Development (OECD).
This has broadened the overall disparities including gender inequality in the U.S., which is at a moderate distance to meet the target for gender equality, according to the Women Count Program of the United Nations (UN).
As part of the American Rescue Plan, a legislative response to the coronavirus pandemic, eligible families with children were able to receive the Child Tax Credit, which consisted of monthly payments of either $250 or $300 per child. While many lawmakers pushed for the credit to be extended or even included in the Inflation Reduction Act, that has not happened.
Child care deserts
The pandemic also brought along the closure of over 16,000 child care facilities between December 2019 and March 2021.
More than half of Americans live in a “child care desert”, where there are either no child care services or not enough services for the number of children in that area. About 57% of Hispanic/Latino households and 44% of Black households live in child care desert regions, according to the Center for American Progress.
“If you can have a more effective child care setup, then you are unlocking the ability for these women to re-enter the workforce and generate a much higher economic return,” Suzman said.
For example, he noted, the country of Kenya offers child care collectives — "mamapreneurs" — in low-income areas. These provide jobs for child care workers, while also freeing out "the time for women to go out and get mainstream jobs in the cities."
To make matters worse, a federal program known as the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) will see an end to its funding on Sept. 30. This program aids to improve the well-being and economic stability of expecting or vulnerable families, as 70% of the families who participate in this program live below the federal poverty level, and helps connect them with child care resources.
"Families who enroll in federally-funded home visits have access to a trained professional who can help them locate high-quality child care providers and access available subsidies to which they are entitled, so child care is more affordable,” Tawana Bandy-Fattah, associate director of research at Council for a Strong America, told Yahoo Finance.
Without sufficient child care infrastructure like MIECHV, the economic implications can become significant.
“Roughly, the inadequate child care systems across the states are imposing a burden of about 10% of average wages each year for working parents," Dr. Clive Belfield, a professor of economics at City University of New York, told Yahoo Finance. "So if the average wage is about $40,000, the economic penalty for families from inadequate child care is about $4,000. Then there are the losses to businesses and to the local economy."
Tanya is a data reporter for Yahoo Finance. Follow her on Twitter.