Treasury Secretary Janet Yellen says the nation’s child care system is “broken.” We wanted to find out if working parents agree.
Turns out, they do. In a new Yahoo Finance–Harris poll, 71% of working parents with kids under 18 said managing childcare decisions is “overwhelming.” Dads were a bit more likely to feel that way than moms, which is perhaps surprising. Among all parents—whether working or not—66% said they find childcare overwhelming. Harris polled 1,066 adult Americans from Sept. 17-20, including 318 parents and 231 working parents.
Economists think childcare burdens are playing an outsized role in disrupting the labor market as the economy recovers from the Covid-19 pandemic. Employment among women has rebounded much less than among men, leaving several million qualified workers on the sidelines. Since women are more likely to take care of kids, childcare difficulties could be one big reason female employment is lagging.
Our poll data supports that. More than two-thirds of all parents say trustworthy childcare is hard to find. That may reflect broad disruptions in the childcare industry due to Covid. Some facilities shut down last year as working parents got furloughed or began working from home and the need for childcare softened. With kids now going back to school and the economy in recovery, demand for childcare is up—but industry employment remains 10% lower than before the pandemic. A labor shortage in the childcare business may in turn make it harder for parents to return to work in other fields.
Childcare is expensive, as well. The Yahoo Finance–Harris poll found that 44% of all parents and 39% of working parents find childcare unaffordable. That aligns with Treasury Department data showing the average family with at least one child under 5 spends 13% of their income on childcare. The government threshold for affordability is 7% of income, revealing the stress many parents feel as they try to decide if devoting a large share of income to the childcare required to work is worth it.
The affordability problem would likely be worse if friends and family members didn't help out with care. Among working parents, 41% say a family member or neighbor provides childcare, while 34% rely on after-school activities and 19% lean on an older sibling. Those methods are typically cheaper than daycare, which 27% of respondents rely upon, a paid babysitter (21%) or a nanny (15%).
President Biden has proposed several ways of easing the childcare burden. The American Rescue Plan Biden signed in March includes a sizable boost in the child tax credit for families earning up to $150,000 per year. The credit expires at the end of this year but Biden wants to make it permanent. Biden also wants Congress to approve $45 billion per year for universal preschool, higher pay for caregivers and refurbishment of thousands of daycare facilities. Congress is negotiating those proposals now, with perhaps better-than-even odds at least some of them will pass this year.
The labor shortage, if there really is one, seems to have several causes. In addition to childcare difficulties, some potential workers are staying home because they still fear getting Covid on the job. Many idle workers don’t have the skills employers need and many jobs aren’t where the available workers are. Some companies are boosting pay, the traditional way to lure reluctant workers, but there’s also evidence pay hikes are not widespread.
Companies interested in luring working parents could do more. We asked if better childcare options at work would influence a job decision, and the answer was yes. About three-quarters of all parents say childcare demands affect their decisions about where to work and whether to work at all. Sixty-six percent of parents say they’d be more likely to take a job from an employer offering flexible scheduling. And 50% said they’d be more likely to take job if an employer offered on-site childcare, even for a fee. Parents who have gotten used to working from home wouldn't mind bringing a bit of home to the office.
Rick Newman is the author of four books, including "Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. You can also send confidential tips, and click here to get Rick’s stories by email.