Child care plan better than nothing
When I was pregnant, I started signing up for daycare waiting lists at 14 weeks, before I had even told most people I was expecting. It was weird to fill out an application for a child who doesn’t yet have a name. (I wrote “player to be named” on the forms.) Yet our daughter wasn’t offered a full-time spot until she was more than a year old, and by then, I’d been back at work for 10 months, making do with a mix of part-time care, babysitters, grandparent help and vacation time.
My experience is hardly unique. A full-time day care spot can take months or even years to secure, especially for the youngest children. 80% of day care spots are reserved for children age 3 or older.
So it’s welcome news that the Biden administration is seeking creative ways to make things just a little bit easier for working parents. On Tuesday, the administration announced that to qualify for federal subsidies under the Chips Act, semiconductor manufacturers will have to guarantee affordable, highquality child care for workers. The New York Times reports that it is part of a plan to achieve through implementation what the administration couldn’t get done through legislation: provide some of the “human infrastructure” the U.S. so badly needs.
It might seem crazy to make employers provide child care. But that just seems to be the way the U.S. provides a lot of the basic things we need to function as a competitive and civilized society. Other countries offer national health care plans; we require employers to provide health insurance. Other countries provide guaranteed income for seniors; our Social Security program pales in comparison, so we expect employers to offer 401(k) plans. Other countries require certain forms of paid time off, from vacations to sick time to parental leave. We leave that up to employers’ discretion. This arrangement might not be ideal, but it is the way we’ve organized our society. So it makes a certain “illogical logic” to include child care in that package, too.
The economy grows when more people enter the labor force. And a lack of things like affordable child care, paid parental leave and universal prekindergarten have for years discouraged workers — especially women — from contributing to their full capacity. That’s a drag on the economy as a whole, but Congress has lacked the will to do much about it. It isn’t just would-be working parents who suffer. It’s employers, too, when they struggle to hire or retain workers.
And so we have a dismal status quo: a lower workforce participation rate than we should and child care that is both hard to find and breathtakingly expensive. In a major U.S. city, child care can eat 20% of a family’s income. In more than half the states, annual fees for an infant outstripped tuition at a public college. And despite the dollars parents shell out, caregivers earn a pittance. To me (and to Treasury Secretary Janet Yellen), this dynamic screams “free market failure.”
Many employers offer some benefits to help working parents with day care, but they don’t go far enough. More than half of companies offer employees access to a dependent care flexible spending account, but as my colleague Alexis Leondis recently noted, the contribution limit of $5,000 is far too low to be meaningful at a time when day care fees are more than double that amount (and that’s in 2018 dollars).
A slightly smaller subset of companies offer access to backup care — a figure that has risen notably since the onset of the COVID pandemic — which can help employees find care when their regular provider is unavailable. But that doesn’t help you find a regular provider. And it doesn’t always work — sometimes there simply are no backup providers available.
What parents really need is reliability — to know that there is a safe, friendly place they can routinely leave the most important people in their lives.
According to the Society for Human Resource Management, only about 6 percent of companies currently offer some form of on-site or near-site child care. That makes it one of the rarer benefits out there, but those who have tried it say it has worked well. When I spoke to former Medtronic Chief Executive Officer Bill George last month, he mentioned that the company had put in a day care a couple of hundred yards from the office during his tenure to make drop-offs as easy and convenient as possible. He had had some reservations at first, but it worked so well that he could see it as part of a broader, post-COVID push to make offices more attractive than remote work.
That echoes what I heard when I was reporting a column on what the office of the future would look like. But there are challenges. “Day care is not an easy add to many office buildings because of the requirements for play areas and all the codes and regulations,” Janet Pogue, a principal and head of research at Gensler architects, told me then. “But we’re seeing that companies are paying much more attention to what’s in their neighborhood than ever before.” In other words, if you can’t build a bespoke day care center — as Marriott did — you could locate near one. But in order to do that, we need more day care centers. The problem becomes a snake eating its own tail.
One way to break free from this uroboros is for employers to partner with day care providers to offer subsidized care. That could be an easier lift for companies and stimulate the construction of new centers in locations where providers know they will have a steady stream of clients. Bright Horizons, for example, runs the Marriott day care program.
The Chips Act guidelines don’t specify exactly how employers must provide child care but instruct applicants for the subsidies to describe how employees will access care that is “within reach for low- and medium-income households, be located at a convenient location with hours that meet workers’ needs, grant workers confidence that they will not need to miss work for unexpected child care issues, and provide a safe and healthy environment that families can trust,” according to the Washington Post.
Despite the rarity of on-site day care, it can improve employee retention; the U.S. Chamber of Commerce suggests it may cut turnover by as much as 60%. In KinderCare’s 2023 Parent Confidence Report, child care benefits were the second-leading reason working parents gave for staying with their current employer, just behind health insurance.
In the 1980 classic film 9 to 5, one of the reforms implemented by the unlikely trio of workers played by Dolly Parton, Jane Fonda and Lily Tomlin is an onsite day care center. More than 40 years later, it’s a shame that it still sounds like such a futuristic idea.