Any family with young children has crunched the numbers when deciding on child care options: day care centers, nannies, faith-based programs, in-home care, keeping the baby with a relative, or stay-home parenting.
President Joe Biden’s “Build Back Better” plan would greatly alter the money math for nearly all of those choices.
Under the plan’s framework, families making up to 150% of their state’s median income would pay no more than 7% on child care. Those making 75% or less would pay nothing, with the average family receiving $14,800 per year worth of subsidized child care.
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The plan is designed to help more women enter and remain in the workforce. Yet there would also be major strings attached to those subsidies, according to Rachel Greszler, a research fellow at The Heritage Foundation, a Washington, D.C.-based conservative think tank.
“It represents a big tilting of the scales in favor of government-directed childcare centers,” she said. “A family might pay $2,000 a year for a government-sponsored center vs. $25,000 if they picked their own. I think it’s going to leave parents with a lot fewer choices.”
The child care subsidies would cost an estimated $225 billion through 2027 and also include a $15 minimum wage for child care workers. The wage increase is aimed at shoring up an industry plagued by staff shortages.
One of the major goals of the initiative is to increase women’s wages, both through increased labor force participation and higher earnings in the woman-dominated child care industry. The White House says that more than nine in 10 early childhood care providers are women.
But parents, usually women, who prefer to stay at home with their children or wish to send their children into a relative’s care will receive no funding under the proposal.
Greszler also has concerns about the effect on faith-based day care centers, which would be subjected to several new rules in order to qualify for the government funds.
The Department of Health and Human Services considers 7% of a given family’s income the maximum for “affordable” child care, a figure which the Treasury Department says more than 60% of families with young children exceed.
It’s for this reason that Wendy Wagner Robeson, a senior research scientist with the Wellesley Centers for Women, supports the proposal.
“Whoever has the lower income stays home with the kids. Usually it’s the mom,” she said. “A lot of moms I’ve spoken to would have worked part time or full time or followed their passion, but they can’t afford child care. This will get women back into the labor force.”
A major question is what families prefer when it comes to child care if money isn’t a factor. Greszler cites an American Compass survey which found that 57% of parents preferred that their children receive care from a parent or relative, while just 22% preferred full-time paid child care.
If the plan is implemented, Greszler predicts that center-based child care will dominate the newly subsidized market. She’d rather see payments made directly to parents to spend how they want and says that any tax increase used to fund the subsidies would ultimately have a detrimental effect on working parents.
To Robeson, the plan points to a brighter future, with expanded options for families and relief from the high burden of child care costs.
“It’s not saying anyone has to go to work, it’s just an opportunity that lends itself to families who would like to do that,” she said. “If you want to go to work, it’s going to help.”
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While families with higher incomes would effectively pay more for child care than those of less means, she feels the benefits strongly outweigh the costs and would ultimately boost the economy.
“Without childcare we would not have the economy that we have,” Robeson said. “Childcare right now is in crisis. If we want to get to pre-pandemic levels for our economy, we have to support childcare.”
