The Childcare Economy is Broken, And Women are Bearing the Brunt

Throughout the COVID-19 pandemic, we’ve seen numerous reports exploring the pandemic’s impact on women, and especially their place in the workforce. In late 2020, The American Prospect magazine dedicated an entire issue covering the long-simmering — and now very exposed issues — in our care systems. Connecting these two issues: the brunt of care work that falls on women, particularly in caring for children. According to an October 2021 study, 1 in 3 U.S. families cannot find child care, leaving mostly women to fill the gap. The crisis is even more dire in Black, Latin American, and other communities of color, where it is estimated that more than half of families live in a child care desert.

Being a childcare worker, especially in the U.S., has been a tough job for a long time. An estimated 53% of child care workers use some type of public benefit to make ends meet. The work is high-skill and high-stress, yet offers little in the way of pay raises or career advancement. However, due to a lack of educational requirements, these positions are most often taken by economically marginalized workers. Yet, even before COVID, the sector regularly saw a 30% turnover rate. After massive closures and layoffs of child care centers in March of 2020, many workers have simply moved on from the sector. Some have gone on to higher paying, more reliable jobs, while others have found that they can’t afford to work. Many children are still experiencing intermittent school closures, or no longer have reliable or affordable care. Workers are not returning to childcare jobs.

Institutions across sectors are looking for solutions. The D.C. government has announced plans to send $10,000 checks to the city’s day-care workers in hopes to keep them interested by subsidizing their meager wages, while private groups have announced partnerships to help workers find and pay for child care. But these solutions fail to address a few of the key issues:

• The care economy is not working well as a market good — that is, costs and demand are high, but profits, wages, and supply are low,
• The sector isn’t set up to support workers or provide wealth-building careers,
• As a national crisis, this issue needs the power of funding and solutions at scale.

National Solutions

National subsidies proposed in bills, such as the Build Back Better plan, are key components of what could make affordable, quality child care a reality for families across the country. Yet, this new funding does not come with new solutions. The federal funds earmarked for this program are likely to come as block grants. With block grants, states and localities will receive money to subsidize the costs paid by families, often per child. Some funding may also be available as low-cost capital, to start new childcare businesses, but none of this funding is likely to raise worker pay, or in any way make it more secure. It isn’t clear at this time whether this bill or a version of it will move forward. The influx of funding it can offer to families would be of incredible value, but communities can’t afford to wait around for it either.

Ground-Up Solutions

However, in addition to national solutions, we see a clear need for ground-up approaches to ensure that those who wish to work as carers, can support their own families and dreams, with a career path in or through the work, and can build wealth for themselves and their communities.

We’ve some solutions from the impact investing sector, such as Mission Driven Finance’s new Real Estate Investment Trust, focused on leveraging impact investing to buy-down the heavy cost of real estate overhead in the care sector. This innovative move could provide relief in a sector with slim margins and few good opportunities for profitable financing options. What’s more, this solution has promise in opening new centers and keeping overhead, and costs to parents, low. However, this solution isn’t at scale, and has yet to show if it will empower and support the workers who make this sector run.

We may be able to pull solutions from similar care-based industries, such as home health aides, which have begun to form cooperatives. The home health aide industry has an annual 67% turnover rate, similarly due to low pay, long hours, heavy lifting and other demanding elements of the work. Cooperatives have been able to slash these rates to 20–40%, with added benefits such as $2/hour wage increases, health insurance, and time flexibility. What’s more, these gains were on top of any profit shares dispersed to worker-owners. Common Future network organizations Cooperacion Santa Ana, Wellspring Cooperative, and Co-op Cincy joined forces in 2020 to experiment with building a nanny-based childcare cooperative network. In recent months Co-Op Cincy also helped a local existing care center transition to worker-ownership. La Mujera Obera who — we were thrilled to resource through our 2021 Community and Culture Grant — saw the need for a responsive child care center and launched one through their social enterprise programs. ICA Group is also experimenting with transitioning existing childcare centers to worker-ownership. These solutions are at an early stage, yet point to the potential in cooperatives to meet the needs of both childcare workers and families. Funders need to look carefully at supporting these responsive solutions and bringing them to scale. To compete cooperatives need to drive down costs like back-end services (billing, compliance, insurance), drive up their ability to find and secure families, and find sizable affordable spaces to call home.

At Common Future, our hope for the Care Economy is to see more resources and attention paid to groups tackling this issue and trying to make care work — especially child care — a sector in which workers can thrive. The role of caring for our youngest community members should be approached with passion and joy, but should also be one that is valued and respected with good pay and the flexibility to live one’s life.

As we look to fulfill our role as a think and do tank, working with partners to cocreate, incubate and fund initiatives, we are closely exploring solutions that can transform our economy — especially for the lives of women. Those interested in improving child care, both in the quantity of care workers we need and the quality of lives they can lead, need to invest heavily changing the way business is approached in the sector — pushing for structures that BOTH support the mostly BIPOC women that help our children thrive and learn, and keep our economy running. After all, the prioritization of our children, by default, is the prioritization of our collective future.