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As child care costs soar, providers are barely getting by. Is there any fix?

A preschooler reaches into her cubby at a preschool center in Mountlake Terrace, Wash. Journalist Claire Suddath says the U.S. child care industry is in need of an overhaul.
Elaine Thompson
/
AP
A preschooler reaches into her cubby at a preschool center in Mountlake Terrace, Wash. Journalist Claire Suddath says the U.S. child care industry is in need of an overhaul.

Claire Suddath, a journalist in Brooklyn, pays about $24,000 a year for daycare for her 17-month-old daughter. Though considered cheap by Brooklyn standards, it's still an enormous expense — and one that Suddath acknowledges is out of reach for many parents.

"I have written a lot of stories over the years and interviewed women about their career decisions, and I can't tell you the number of women that I have talked to who have ... dropped out of the workforce or switched to part-time solely because they couldn't afford child care," she says.

In her recent article for Bloomberg Businessweek, Suddath examines why child care is so unaffordable in the U.S., and why attempts to provide federal funding for care keep failing in Congress. Suddath estimates that 95 percent of child care owners and workers are women, and 40 percent of them are women of color. She notes that despite the high cost of care, the average child care worker earns about $24,000 per year — less than many janitors and baristas.

"No one goes into this industry because they want to get rich," she says. "In a normal year, about a quarter of child care workers leave the industry because they just can't afford to hold the jobs that they hold."

Other countries subsidize child care, but the U.S. market, while heavily regulated, is largely private — which makes the industry particularly vulnerable. President Biden's Build Back Better plan outlines a path toward more affordable child care. Suddath says that's a start, but what's really needed is a full system overhaul.

"The U.S. Treasury a few months ago released a report ... and they found that your typical child care business in the U.S. entered the pandemic — this has nothing to do with COVID — [with] about a 1 percent profit margin, which is not a lot of wiggle room."


Interview highlights

On why child care is not workable in the free-market sector

When you talk to economists, they say this is a perfect example of what they call a 'classic market failure.'

When you talk to economists, they say this is a perfect example of what they call a "classic market failure," which is when the price point for a good or a service — in this particular instance it's child care — is too expensive for the consumers, by which I mean families, and too expensive or unaffordable for the providers, the people providing that service, in [this] case, child care owners and workers. And there's no way to fix that in a private market setting.

And we have other examples of this in our society. We recognize that we want everyone, regardless of income, to have access to a fire department. If your house catches on fire, we don't ask, "Well, can you afford to put it out?" It's better for us collectively if we put the fire out, we collectively pay for a fire department, we put the fire out so that it doesn't spread to another person's home because they happen to live next to someone who can't afford the fire department. We have police, we have libraries, we have public schools, but child care has never been thought of in that way, even though I think, very obviously, it should have been a long time ago.

On why child care is so expensive from the provider's point of view

It is heavily, heavily regulated. ... There's no one that I have talked to who is arguing to deregulate the industry, because these laws have been put in place over the years to keep babies safe. There's fire safety codes, CPR requirements, square footage requirements so that you don't just pack 50 babies into a room and leave them lying on the floor or something like that. And the sticking point, like the thing that makes it so expensive, is most states, it varies a little bit, but they require one caregiver for every three to four infants, which is children 2 and under. And that's solely because they have to. Babies need constant supervision and attention. When they're newborns, they nap four times a day, they eat every two hours. You have to swaddle them, you have to hold them all the time.

On President Biden's attempt to address child care via the Build Back Better plan

Build Back Better is the first time in 50 years that the federal government has meaningfully even attempted to address this issue. So I want to give them credit for that. And if Build Back Better passed tomorrow and was fully implemented, every state bought into it, it would do a number of really great things. The two most important things would be it would make child care completely free for low-income families, and it would cap it at about 7 percent of many families' incomes, which would about halve the cost for a number of Americans. You'd be saving millions of families millions and millions and millions of dollars. And, on the other hand, it also requires caregivers to be paid a living wage. It doesn't really define that, but it's generally considered to be like a kindergarten teacher salary, which would almost double their pay.

But the problem with Build Back Better is that it doesn't create a whole new federal program from scratch. All it is saying is, "Hey, we as the federal government have a ton of money available for you states if you decide to address this yourself. And you have to come up with a plan that hits all of these points." ... It's just so complicated to ask all 50 states to come up with 50 different plans to address an incredibly complex issue. It requires a leap of faith to think that that is going to happen — and I honestly don't think that it would.

On how the U.S. government subsidized child care in World War II

When World War II started, all of these women entered the workforce in huge numbers. ... But they needed a place to put their children for practical reasons and in the very early days of World War II, you have stories of ... a movie theater in Muncie, Ind., where women would just drop their kids off to watch movie after movie while they went and worked in a factory. Or in California there was a factory, and the women working there realized that they could leave their children in their cars, and [they] parked under the factory windows so that when they had their breaks, they could peer out the window and check to make sure that their kids were OK. And so Congress was like, "Well, this is not a good idea." And they passed what's called the Lanham Act.

It was passed in 1940, and by 1942, we essentially built over 3,000 Lanham centers, which were federally subsidized and run daycare centers for women working these jobs. And by and large, they were incredibly successful and they could tailor their services based on what their customers or their families needed, whether it was overnight care for people working the night shift or summertime hours or something like that. But they closed at the end of the war because funds were withdrawn, and that was the last time Congress has successfully addressed this issue. They did pass a bipartisan bill in 1971 [the Comprehensive Child Development Act], and it landed on Nixon's desk, and had he signed it, we would have a federally subsidized child care program and I wouldn't be talking to you about this today. But he vetoed it. And so here we are.

On the U.S. being so far behind other wealthy nations in terms of guaranteed parental leave

In most wealthy nations [guaranteed leave is] paid, and it is subsidized by the government because ... if you are a small business and you have five employees and one employee has a baby and leaves for months on end, it's a struggle. It's a struggle for you to come up with the solution to cover their work, and it's a struggle for you to pay for their leave. So in other countries, the government pays and it's oftentimes months, if not a year. ...

The initial plan for Build Back Better was [initially] 12 weeks, which is still just incredibly paltry. But it's something. And now we're maybe talking four weeks, if that, and ... it's so small, it's almost insulting. ... It's not really helping you all that much. So we're so far behind [with] this. Most countries have started dealing with this at least by the 1970s, and they have gradually, over the years, increased it as they have realized they needed to. And we're still sort of back at 1974, or something like that, because we've never dealt with it.

Lauren Krenzel and Seth Kelley produced and edited this interview for broadcast. Bridget Bentz, Molly Seavy-Nesper and Amy Morgan adapted it for the Web.

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