How to remedy the American labor shortage? Provide decent childcare services.

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How bad is the child care crisis in the United States? Heartbreaking stories have emerged from parents queuing at night Where sleep in parking lots in hopes of getting places in daycare or kindergarten. For strained parents of older children, shortage of lifeguards and camp counselors increased stress this summer. And last week, the Center for Talented Youth at Johns Hopkins University abruptly canceled its residential program in Pennsylvania.

The common denominator is a lack of public investment leading to a huge shortage in the childcare sector. This shortage, in turn, prevents parents – especially mothers – from fully participating in the labor force, which exacerbates the labor shortage.

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Even before the pandemic, the United States ranked 32nd out of 40 industrialized countries for the employment of mothers of young children, and below average for those with minor children of any age.

The National the unemployment rate is 3.6%with multiple states hit all-time lows. There are almost two job vacancies for every unemployed person. While this is great news for job seekers, the repercussions are being felt across the country as Airlines companies and other businesses are struggling to stay adequately staffed, and supply chain disruptions keep inflation on fire.

Meanwhile, a massive pool of potential workers remains marginalized by an inadequate and expensive childcare system. Given the desperate need for more workers, this means there is a key tool that policymakers have yet to use: investment in childcare.

The pandemic has crushed an already fragile child care sector. The latest data available shows nearly 16,000 child care programs are permanently closed between December 2019 and March 2021, and the number has almost certainly increased. Even when programs have been able to stay open, many have had to be scaled back.

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Although parents pay huge fees, programs cannot offer competitive compensation due to exceptionally high fixed costs due to necessarily low child/adult ratios. Child care workers earn a median salary of about $13 per hour. Public funding is tight — put only about $1,500 per year and per child under 5 (in comparison, the average expenditure per child in public schools is over $13,000).

A result of program and classroom closures? The time slots cannot be found, and therefore the parents, especially mothers, leaving the labor market. “The estimated number of families affected by reduced child care capacity is equal to just over half the decline in the labor force since the onset of covid,” says a March report from Wells Fargo economists.

Beyond the pandemic, the report continues, “if the [labor force] the participation rate of mothers with young children could simply be increased to match the participation rate of women with school-aged children – not to mention that of men – around 1 million more workers would be in the market work today.

Even when parents are able to keep their jobs, child care breakdowns take a toll on attendance and therefore on business productivity and customer service. For example, a 2019 report from the Council for a Strong America Noted that “nearly two-thirds of parents facing childcare issues report leaving work early, and more than half report being distracted or missing full days of work.”

There is good reason to think that continued public investment in childcare would provide the economy with an adrenaline rush, easing scarcity and inflation while boosting productivity and reducing deficits. A team of economists recently published a paper projecting that even a “narrow” full-funding policy of the current choice-based grant system would result in an almost 5% increase in full-time maternal employment. The largest increase – almost 13% – would be seen among mothers from low-income households.

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These conclusions point in the direction other research showing the vast economic benefits of government investments in child care.

While some companies are experimenting providing childcare allowances, it is clear that public funding is needed. Tying childcare to a work-related benefit replicates a terrible aspect of American health insurance with the added twist of job loss separating young children from their beloved caregivers. And companies don’t have the funds to cope the problem in a system already unable to meet demand. The nation should no more expect companies to cover childcare than ask them to cover the first year: both are social goods that require tax revenues to be accumulated to finance a functioning system whose all can benefit.

There are plenty of reasons why lawmakers should prioritize child care funding, especially as congressional Democrats take a final stab to pass part of President Biden’s legislative agenda before the midterm elections. Affordable, high-quality child care promotes child development, acts as an anti-poverty measure and supports family stability. Particularly in this inflationary season, child care costs that are exceeding average inflation are sucking up funds that could otherwise be used to offset rising gas and food prices, not to mention help families move forward.

The reversal of Roe vs. Wade made these factors all the more salient. However, perhaps no reason is more economically urgent than to ensure that the lack of childcare does not prevent anyone who wants to work – especially not when the United States needs all the workers they can get.

Elliot Haspel is the Senior Program Manager for Early Childhood Education at the Robins Foundation and the author of “Crawling Behind: America’s Childcare Crisis and How to Fix It.”

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