Subsidies would worsen the crisis in child care.


Before the pandemic, it could be difficult to find quality child care. Now it is even more difficult.

Parents of young children are told to return to work, only to find that countless daycares are closed. For many families, this is a crisis.

Sadly, President Joe Biden’s Build Back Better plan – if it ever passes – will keep it that way.

As currently drafted, the plan would introduce unprecedented federal spending on early childhood care and education. It would fund preschool for all 3- and 4-year-olds and subsidize childcare costs so that no family earning $ 300,000 a year or less pays more than 7% of their income on others. forms of childcare.

A New York Times columnist calls it “revolutionary.” That is, in the sense that it is unprecedented for fiscal recklessness.

The Biden administration says universal kindergarten would prepare children for success in school and that childcare subsidies would increase women’s participation in the labor market “driving economic growth.” Unfortunately, that wouldn’t do either. In fact, the only thing this proposal would do is worsen the crisis in child care.

Why? Because the proposal would significantly increase the already huge regulatory burden on suppliers. This would force core pre-K teachers to hold bachelor’s degrees, match salaries to unionized teachers, and impose maximum teacher-to-child ratios, among other provisions.

The Institute for Justice classifies “the public preschool teacher” as “the most widely and expensive profession authorized” in the country. Regulations, such as those requiring more than five and a half years of experience and education, on average, before one is legally permitted to care for a child, exist in 49 states and the District of Columbia. The Build Back Better bill would extend these regulatory burdens to all preschool teachers, public or private.

Rather than forcing new regulations on the already overregulated child care sector, lawmakers should address some of the issues that already limit parents’ child care options and needlessly increase costs.

For example, some employers offer on-site child care services to their employees as a benefit. Many more would if the regulations were reduced. Currently, the Fair Labor Standards Act requires employers who provide on-site child care to include the value of this benefit when calculating overtime. In other words, in addition to paying employees 1.5 times their hourly wages for overtime, employers must also pay them 1.5 times the hourly value of their child care benefit.

You don’t get additional health insurance or overtime retirement benefits. Child care benefits should be treated the same. By removing the distinction between child care and other employer-provided benefits, it would be easier for employers to provide on-site child care services to their employees.

On-site child care is an attractive option for many employees who have children or are considering starting a family. Without this regulation – and the additional education requirements and salary increases that would be demanded as part of Build Back Better, many more employers could offer convenient, high-quality child care. It would be a great tool for recruiting and retaining employees – and no federal subsidy would be needed.

In another case where the government is limiting child care choices, the tax law requires any family that pays a babysitter or home child care provider more than $ 2,300 in a single year to process them. as a “domestic worker” rather than an entrepreneur. This subjects the family and the caregiver to a barrage of regulations and taxes – such as Medicare and Social Security withholding tax. Paperwork is a significant burden on many families, especially those who already face barriers navigating government systems.

Every family has unique needs. Satisfying them requires a wide variety of child care options, not a system of identical providers complying with government approval. For child care to work for everyone, children must be allowed to attend the facilities that best meet their needs and allow them to reach their full potential. These options could be employer-provided centers, family caregivers, or whatever.

The government has already shown how it delivers child care for decades of Head Start, the failed government preschool program of the Great Society era that will serve as a quality standard for the programs offered in the Build Back Better plan. Head Start’s randomized controlled trials have found no evidence of academic improvement later in life.

Beyond families and children, taxpayers will also suffer, as it is clear that these childcare and pre-K programs will not come close to paying for themselves.

Instead of building higher barriers, regulators should reduce burdens to allow parents to decide what is best for their children and allow providers to meet those preferences. It is time to dismiss the government’s record of failure and let families solve the child care crisis.

Schoof is a researcher and project coordinator at the Center for Education Policy at the Heritage Foundation. Schuster is part of the think tank’s Young Leader program.


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