Economy will suffer until child care crisis is resolved, Boston Fed finds
The ability for working parents to find child care is likely to fall far short of demand, posing a challenge to a recovery from the coronavirus pandemic, according to a publication co-authored by the Federal Reserve Bank of Boston.
"Today, the pandemic has made broadly evident what was already clear to America's parents, employers and care providers: the nation's early childhood care system is fragile," according to the report, whose authors spoke about their work in a Fed announcement on Monday.
Until child care is more widely available to parents — some facilities have closed during the pandemic, voluntarily or because of health regulations — they will face significant challenges in returning to pre-pandemic levels of work, the report said.
The authors, Beth Mattingly of the Boston Fed and Jess Carson at the University of New Hampshire, said they found signs of an economic toll earlier in the pandemic: in May and June, 13% of working parents lost a job or reduced their hours because of a lack of child care. An estimated half of Americans live in areas where child care isn't easily accessible, and even among those who can find care, it can be expensive: about one in four families spend more than 10% of their income on child care, above a federal affordability threshold of 7%.
Without additional financial support for the child care industry, the national supply is likely to be dramatically reduced, the authors said. The labor-intensive industry struggles with high fixed costs, primarily for staffing, while workers earn relatively low pay, they said. Those challenges have been exacerbated by costs related to guidelines pertaining to cleaning and children per room.
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