What is the goal of child care policy?

What is the goal of child care policy?

I think Democrats have picked the wrong ones. 

By Matthew Yglesias. 

I was thinking about Democrats’ proposal to subsidize child care costs for kids under three (they have a different plan to provide pre-K to 3- and 4-year-olds), and I think it’s useful to step back and ask, “What are we trying to achieve with our early family policy?”

The goal matters in every policy area, but the child care situation has gotten unusually fraught due in part to a failure to have a frank discussion about aims when different plausible goals lead to very different policy designs.

(Matt Roth for The Washington Post via Getty Images)

Wartime child care in the United States

A number of articles over the past few years have looked back nostalgically at federal child care efforts during World War II. Exemplary entries in this genre include Lydia Kiesling’s “Paid Child Care for Working Mothers? All It Took Was a World War” (NYT; October 2, 2019), Rhaina Cohen’s “Who Took Care of Rosie The Riveter’s Kids?” (The Atlantic; November 18, 2015), and Betty Little’s “The US Funded Universal Childcare During World War II — Then Stopped” (History Channel; May 12, 2021).

Some of these headlines may be overstated. The links in her piece have unfortunately gone dead, but Cohen’s text says that there were roughly 3,000 child care centers that served a maximum of 130,000 kids at any one time, adding up to roughly 550,000 children over the course of the war. This program was the result of the Lanham Act, and Cohen writes that “Lanham funds made it to only about 10 percent of the children in need,” in part because “the government had a hard time amassing a sufficient staff.” So there was never a time when we had a comprehensive, federally-run child care system meeting all or even most families’ needs. But we did have something pretty large and ambitious that was then dismantled after the war rather than expanded on.

This wartime system, however, had a clear goal: to maximize the size of the American labor force in order to maximize wartime production and defeat Germany and Japan.

And that was a good goal, given the circumstances of the time. But we are not currently at war with the Nazis, so it actually doesn’t seem obvious that maximizing labor force participation should be our goal.

Support families neutrally

I think it’s sad that Americans, on average, have fewer children than they say they’d ideally like. Jill Filipovic says that “for a great many individual women, reconsidering motherhood doesn’t reflect hardship or unmet desire, but rather a new landscape of opportunity.”

And of course, she’s right. In a nation of 330 million people, we have heterogeneous preferences with people making different choices for different reasons. But when Claire Cain Miller polled on this, she found that the number one stated reason was “child care is too expensive,” followed by “want more time for the children I have,” “worried about the economy” at number three, “can’t afford more children” at number four, and “waited because of financial instability” at number five.

People are not perfectly reliable narrators of their own decision-making, but the rising cost of labor-intensive child care services does seem to be a major issue for most people at least.

I think the most natural way to address this is with money. Democrats’ expanded Child Tax Credit would put cash in the hands of almost all American parents. Democrats also have a plan to expand public schooling to cover 3- and 4-year-olds. What you’d ideally like to do on top of that is make the CTC payments larger for kids under 3. That cash could be used to pay for child care or to make it more affordable to stay home with the kids. There is also a broad range of middle-ground options where you would use the money to help defray the cost of relying on family members or informal child care arrangements. Even the existing CTC proposal is challenging to find enough money for, given Joe Manchin’s limited willingness to raise taxes, so I’m not saying BBB should include this supercharged parental payment.

But I’m an incrementalist. If you had a good program for cash assistance to parents in place, then you could build on it over time to start addressing other needs like childcare.

That being said, when I have argued before that the expanded CTC will not induce people to drop out of the labor force, I am making an empirical prediction based on evidence from other programs. If you make the CTC bigger specifically in order to cover the child care costs of the youngest children, then that is going to change. Many parents would take the bonus money and use it to defray child care costs. But others — especially people with low-wage jobs and limited career ladders — will take the money and stay home with their kids. And that seems fine to me. But it’s currently perceived as politically dicey, and it’s not in line with Democrats’ goal to create a program that raises labor force participation.

Democrats’ goals: promote work and raise pay

Democrats have written a bill that, WWII-style, subsidizes child care rather than the cost of parenting, which might include child care.

They’ve also explicitly put a work requirement into the bill. Some people think of preschool and child care as two different names for the same thing, but Democrats make a clear distinction in their proposal. Their preschool program for 3- and 4-year-olds has no means-testing and no work requirement because they believe it is an educational intervention for the benefit of children that as many people as possible should enroll in. Their childcare program for 0-2 is a benefit to help working parents. If you make too much money, you don’t get it because you don’t need the help. And if you’re not working or engaged in appropriate job-seeking activities, you don’t get it because you don’t deserve the help.

And of course, if you’d rather just have the cash value of the help and drop out of the workforce temporarily to hang out with your kid, you can’t do that.

Beyond those pro-work parameters, the bill actually doesn’t say a ton about the implementation details. Unlike in World War II, the federal government isn’t going to be running child care centers. They’re not even going to be writing detailed eligibility guidelines for who does and doesn’t qualify for the subsidies. Instead, responsibility is kicked down to the states to work out most of the details, with the crucial proviso that “child care workers would be paid a living wage and achieve parity with elementary school teachers who have similar credentials and experience.”

I find this confusing because most child care workers don’t have similar credentials and experience to elementary school teachers.

But you could interpret this proviso in a couple of ways. At one extreme, you can say that we are replacing almost all of the existing child care workforce with a different group of people who have teacher-like qualifications and will earn teacher-like pay. At the other extreme, you can do some statistical manipulations and say, “ta-da, the pay gap between child care workers and elementary school teachers in our state is accounted for by their different credentials” and nothing changes. The assumption, I guess, is that state governments will come up with something in between those options.

But what keeps tripping Democrats up is that if you succeed in creating a big boost in child care workers’ pay, then you are going to raise the unsubsidized cost of child care.

An underbaked agenda

Matt Bruenig ran the numbers on the high-cost scenario and asked, “What happens if you assume child care workers get paid as much as kindergarten teachers?”

The answer is that unsubsidized costs explode, creating a bunch of problems, many of which are related to the weird way that the law is phased in. The scenario Bruenig outlined in this post is fairly extreme, but what I think is telling and important about this whole scenario is the response a Center for American Progress early childhood expert gave to Politico:

“Fundamentally, this analysis takes what we would hope as an optimal end point, and pushes it into the first year,” said Rasheed Malik, associate director of research for early childhood policy at the left-leaning Center for American Progress. “It takes an extreme set of numbers to come to a totally unrealistic conclusion, and in the process ignores all of the details that are in there.”

“It’s not based on a close reading of the bill, or even a close reading of expert summaries of the bill,” he added. “We don’t even have enough child care right now; we actually have to build our way up to a fully functioning system.”

There is some truth to what Malik is saying, but note that what he is not saying is “my colleagues and I in the think tank community have a much better model than Bruenig’s, and the real number is $TK.”

Instead, Malik wrote an analysis for CAP that counts up what share of families would receive subsidy under a fully-implemented version of the BBB plan without addressing the impact on the unsubsidized cost. The idea is that supply will expand:

Since this would be an expansion of child care assistance on an unprecedented scale, the bill phases in eligibility over the first four years of the legislation. The U.S. child care system, still suffering from the effects of the coronavirus pandemic, would not be able to meet demand in its current form. The legislation addresses this urgent issue by investing in supply-building over the first three years in order to offer adequate options for the millions of families newly eligible for child care subsidies. Building supply will involve recruiting new early educators, opening additional classrooms, and supporting the development of many new child care businesses over the next few years.

By intentionally scaling up supply, increasing wages for teachers, and attracting thousands of new early educators, this plan will truly build back a better child care system for the millions of families who need affordable, quality child care.

If that was a policy analysis published 2016 and a bunch of smart people worked on fleshing out the details over the next three to four years and then it became a campaign proposal in 2020 and the basis of legislation in 2021, then maybe that would be great. But we’re talking about legislation the House already passed, and it has a giant “large expansion of the child care system TK” in it.

Three obvious, surface-level questions:

How is this bill going to induce permanent investments in increased supply when it’s also scheduled to expire in 2027?

How does this interact with present-day economic conditions when employers are struggling to fill job openings? It’s not 2010 anymore with tons of idle workers weighing on the economy.

How much work are we realistically expecting Republican governors to put into figuring out these logistical issues that were too hard for congressional Democrats?

Most of all, while I think it’s fine to say that Bruenig’s cost estimates are way off because child care workers’ pay won’t, in fact, increase very much, that means you’re not actually going to increase child care worker pay. There’s no way to escape the tradeoff between worker pay and higher unsubsidized prices.

Two birds with half a stone

In European countries, they have much higher taxes.

Those taxes are redistributive in a rich-to-poor sense. But they also broadly redistribute consumption in favor of social goods — health care, education, and child care. For our K-12 education system, we do the same. Non-parents subsidize parents as part of the overall social compact, and that allows K-12 teachers to be paid much more generously than child care workers. If you cut property taxes to help the middle class and then made up for it on the back end by means-testing public schools, including zero subsidies for people earning over 250% of state median income, that would be a huge change. It’s true the people hurt would be economically comfortable. But they’d specifically be economically comfortable parents, while rich non-parents would get a windfall from the property tax cut.

By sticking to their pledge not to raise any broad-based taxes, Democrats are trying to subsidize the child care sector with half a stone — there’s no aspect of the transfers from non-parents to parents here.

And yet with that half a stone, they are trying to kill two birds simultaneously — aiming to reduce prices for families of modest means while increasing the cost structure of child care by raising wages. This is, in a lot of ways, just dwarfed by the big picture problems of relying on state cooperation and having the program expire in 2027. But it’s a big deal conceptually and not just a consequence of trying to squeeze an ambitious agenda through a Manchin-sized hole.

My agenda is parent-focused:

Subsidizing parenting, not specifically child care.

Transfers from all non-parents to all parents, not just from rich people to downscale parents.

Just subsidize — don’t also try to raise wages.

Democrats are making different big-picture choices on all three points, with a fundamentally different goal of trying to raise pay and increase labor force participation, and I don’t think we’ve really had a proper debate about those goals.