June 23, 2021

ICYMI: Warren, Experts Agree Investment in Child Care Is Critical to Strong Economic Recovery

Washington, D.C. - Today, United States Senator Elizabeth Warren (D-Mass.), chair of the Senate Banking, Housing, and Urban Affairs Committee's Subcommittee on Economic Policy, held a hearing with experts on the role of child care in a post-pandemic recovery. During the hearing, Senator Warren continued her calls to treat child care as basic infrastructure and highlighted a letter she led yesterday with more than 100 Senate and House colleagues calling for at least $700 billion of direct spending over 10 years for the child care industry in the upcoming infrastructure package. 

In response to her questions during the hearing, expert witnesses argued that women's workforce participation is limited by a lack of quality, affordable child care, that high quality early care and education has long-term benefits for children and economic growth, and that a robust investment in the industry - like Senator Warren's call for $700 billion over 10 years - is key to helping working parents reenter the workforce and supporting child care providers as the economy recovers. 

Transcript: The Role of Child Care in an Equitable Post-Pandemic Economy
U.S. Senate Banking, Housing, and Urban Affairs Committee's Subcommittee on Economic Policy
Wednesday, June 23, 2021

Round 1 of questions below and video HERE: 

Senator Warren: Even before the pandemic, half of all Americans lived in "child care deserts," areas where there simply aren't enough licensed child care slots to meet family needs. We all know that COVID only made this worse - forcing thousands of child care providers to close their doors.

For families, this means excruciating decisions. Do I spend an hour each day driving back and forth two towns over, because that's the only place where there's an open slot? Do I depend on neighbors or relatives who have their own lives to worry about? Some parents are juggling it all themselves, hoping that the baby doesn't start crying while they're trying to do a job interview or do their work from home.

Lack of affordable, high-quality child care affects every aspect of our economy. And while it got a lot worse during the pandemic, it has been holding our economy back for decades.  

So Dr. Stevenson, I was hoping maybe we could go through some of the data on this. What happened to women's workforce participation from, say, the 1970s up to the 1990s, through the 1990s?

Dr. Stevenson: So between the 1970s and the late 1990s, women's labor force participation grew quite rapidly, going from 43% of women participating in 1970 to a peak of 60% in 1999. 

Senator Warren: Ok, so let's break this apart into pieces. Ok, so we have this sharply upward slope. Did that trend continue?

Dr. Stevenson: So that trend did not continue. In fact it flattened out and we saw women's labor force participation growth completely stall out, decline slightly, and then decline a lot in the 2008 recession. Although as I mentioned previously we saw a real resurgence in that participation rate starting around 2015.  

Senator Warren: Okay, so- 

Dr. Stevenson: Although it's also important to realize that male participation fell much faster than female participation.

Senator Warren: So we have women's participation, goes up sharply in the '70s, the '80s, and the '90s, it flattens in about 2000. Is that what happened in our peer countries like Canada? Did they see that same pattern of rise and then flattening?

Dr. Stevenson: No, in fact the U.S. really led the world with the rapid rise in the '70s and '80s and the rest of the world started catching up. And then the rest of the world added more, sort of workplace supports for working families. They added workplace flexibility, subsidized high quality child care, paid parental leave. We saw female participation continue to rise in other OECD countries and the result has been that the U.S. went from near the top of OECD countries in terms of female labor force participation to really around the bottom among 22 OECD, more developed countries.

Senator Warren: Alright, so our peer countries kept growing female labor force participation, and creating more support for that - more family-friendly policies, more child care support and so on. The United States did not and we saw a flattening of women's labor force participation. What did that flattening of women's labor force participation mean for America's GDP?

Dr. Stevenson: Well I think the best way to see that is actually to look and see what did it mean in the 1970s, 1980s, and 1990s. The U.S. pre-pandemic economy was roughly 15% larger than it would have been if women had been employed the same rate and worked the same number of hours that they did in 1970. So then think about, we got 15% more GDP because of the growth in the '70s, '80s, and '90s, and then it stopped. So there are lots of estimates over how big our GDP would have been in the 2000s and the 2010s if women had continued working. Do we, do you go up towards - if you think about us adding the kinds of policies that other OECD countries would've added, some estimates suggest that female labor force participation would've been about 6 percentage points higher. If you think about something like that, that's certainly more economic growth than something like tax cuts for corporations have ever generated. 

Senator Warren: Alright, and I understand that Mackenzie put out a report, in which they put a dollar estimate on what would have happened, how much bigger our economy would have been if female labor force participation had continued. Are you familiar with that report, do you remember the dollar figure on that?

Dr. Stevenson: Yes I am, you know Mackenzie's taken a look at, first of all, the entire globe and come up with really an enormous estimate. But my understanding is their estimate for the United States is one and a half-trillion dollars increase in GDP if we had had that kind of continued growth in female labor force participation  

Senator Warren: And I take it. Just let me ask, in your expert opinion, if we had universal child care, do you think that would have had an impact on women's labor force participation?

Dr. Stevenson: I absolutely do. A lot of women literally pay to work. In other words what they spend on child care is more than their, what they're bringing home after taxes. The reason they pay to work is because they know if they lose their foothold in the labor force, they're going to have an even harder time getting it back. But many women look at the idea of paying to work, being away from their children and bringing home no financial benefits for their family as a result, and think this isn't a sacrifice I want to make. 

Senator Warren: I really appreciate this. You know, without child care, millions of mothers just can't work. And holding these women out of the workforce harms them, it harms their families, but it also harms our whole economy. This is what it means to say that child care is infrastructure: it's part of the basic support we need so that everyone gets an opportunity to work and our economy is productive.

This is our moment to act. You raised this point earlier Ms. Goss Graves. The President has proposed a major expansion of child care and early childhood education, and when Congress acts on infrastructure, child care is not going to be left behind.

So let me ask you what size of federal investment do you believe is needed to provide quality, affordable child care to every family that needs it?

Ms. Graves: So we think we need an investment of $700 billion. At that level, we can ensure that families don't have to pay more than 7% of their income for child care. At that level we can ensure that child care providers are actually paid wages that are dignity wages akin to kindergarten teachers. And at that level we can increase the supply, so that we don't have this challenge of the child care deserts that are especially a problem in rural areas. And that there will be more supply in terms of facilities, but actually more workforce supply.

Senator Warren: Well I couldn't agree more. Just yesterday, I sent a letter to Congressional leadership with the support of over 100 of my colleagues, calling for a $700 billion investment in child care.

So let me ask you, Ms. Goss Graves, some in Congress have argued that we should focus just on roads and bridges and then come back to a discussion about child care later - if ever. What would be the impact on women if we leave child care behind in our infrastructure package?

Ms. Graves: I just think that we don't have that choice. We cannot live women who have lost so many jobs in this economy, who have held together their families in this economy with work that is both invisible and barely made visible and certainly underpaid. In this period, people are counting on Congress to deliver on child care, and that is a short term solution but it is a long term solution too. It goes to their long term economic security, their ability to retire with dignity.

Senator Warren: Yeah, so I really appreciate your testimony here. I support investing in our roads and bridges and broadband Internet - it's all important. But we have to invest in the kind of infrastructure that women need as well. As a young mother, I had a terrible time finding quality, affordable child care-and twice I nearly quit school, I nearly lost my job because I couldn't manage child care. If we don't get this done, my granddaughter is going to face the same kind of problem I faced, and that is simply wrong. We can't let that happen. The infrastructure train is leaving the station, and we cannot leave child care behind.


Round 2 and 3 of questions below and video HERE: 

Senator Warren: - I want to talk about another aspect of child care that many of you have raised today and I appreciate you raising it. We have two very different systems in our country for teaching our little ones. For five and six-year-olds, of course and for older kids, we have public schools. No matter where you live, no matter how much money you make, no matter whether you have a job, you can send your children to public school to learn - and you can do it for free.

Now, why did public school start at the age of five or six?  Well, mostly because back then nobody thought that children could learn anything earlier than that. And now of course we know that's not true, that early childhood experiences affect whether a child is ready for first grade, but they also affect that child all the way throughout childhood and into adulthood. For example, high-quality early childhood education is linked to better health in adulthood and reduced odds of substance abuse or arrest. Many experts point out that when we spend a nickel on our smallest learners, we save dollars down the line. 

But for the littlest kids, parents are on their own. 

Don't have an extra ten or fifteen thousand dollars a year to send your child to a high-quality early childhood program? Then you get to juggle between friends and relatives, or maybe just leave your job because child care costs more than you can earn.  

Dr. Stevenson, let me ask you, do these two separate systems make sense, given what the evidence says about the benefits of high-quality early care and high-quality early education for our children?

Dr. Stevenson: I believe that if we were designing our education system today, from the - from scratch, we would absolutely be emphasizing early learning as a critical part of that education system. As you said, we didn't know back when we designed our education system that so much learning happens in the first five years. We now know that really does form the foundation upon where people - upon which people develop and grow. But I really want to tie this back to in the last century our economic growth was completely driven by the fact that we educated workers more than any other country in the world. We are now not educating our citizens more than any other country in the world. We are behind on early childhood education - we're also behind on universities - and this lack- failure to invest in people it's ultimately gonna hold our economy back.

Senator Warren: Yep. So, I think the evidence is clear here that you're citing. That high-quality care helps all our children learn and grow. That now, in addition to Head Start, we do have a limited public program to help low-income parents get affordable care for their kids, funded primarily through the Child Care Development and Block Grant Program, CCDBG.

But our public child care system works very, very differently from our public school system.

Ms. Goss Graves, does every single parent qualify for help getting child care, regardless of their income or their work status under current law?

Ms. Graves: Oh, I wish that were so. It's really only the lowest income families that qualify and that - and by a family qualifying what that means is there are many many children who would benefit from being in an early childhood program who can't because their parents aren't - parents aren't eligible. 

Senator Warren: Okay, so not everyone qualifies. Let me ask you about the people who do qualify. If you are eligible for the program, can you just walk into a child care center and sign your child up?

Ms. Graves: Well, unfortunately it's also not that easy. There is the work that you have to do to demonstrate that you're eligible which ends up serving as a barrier for a lot of parents. On top of that there are waiting lists and processing all of this can mean that parents and families - they languish on waitlists for months.

Senator Warren: You know, we don't make parents prove that they're working or that their income is low enough to be able to send their child to first grade. We don't put those children on waiting lists to get into second grade.  We understand that education is beneficial for all kids, so we invest in it as a country.

Early care and education should be the same. We need to make it available for all of our babies, regardless of how much money their parents earn or what kind of job they have. You know, we can't lose sight of why this matters. Ms. Ngoh, tell me about the children in your program. How do you see them grow and learn while they're with you?  

Ms. Ngoh: Let me clarify something. What I want to clarify is that I was misunderstood. I - when I talk about regulations the question was what obstacles were there when you wanted to start your program and I listed some of the obstacles that I did. Having regulations in child care is very very important. They are the basis of first, health and safety are very very vital in daycare. So I should not be mistaken to say that regulations are not required. They are required and all we need - we need support to help us implement those regulations. For parents who keep their kids with us, they need to trust us and regulation builds that trust because parents know that their kids are in a safe place. Thank you for that.

Senator Warren: Thank you and I - yes, go ahead.

Ms. Ngoh: Let me now answer your question. The kids I have in my daycare. I have kids in my daycare now that range from the ages of 18 months to 10 years. Those kids in my daycare are different, different personalities. They have different health issues. They are at different levels of development. I have kids that are shy. I have kids that are happy. I have kids that somehow struggle with their speech - we call them speech delayed. We have kids that are just recovering from the pandemic and they are in a trauma. I have a kid - I will share two stories. One, I have a kid that the mom was pregnant and lost the pregnancy. And when the child was born, apparently the child lived for one day and died. And that child came to daycare and all I watched the child do was trying to pick toys and make them look sad.

Senator Warren: Mmm.

Ms. Ngoh: A child that used to be a happy child - you see that child struggling with feelings, sadness. I have the task - I have the job of recognizing what that child is going through and helping that child to recover, helping that child to deal with sadness. Today, I have a parent in my daycare who is making a little bit over $475 a week. She has three kids. The first child is 14, the second is 13 and the last one is 2 years old. That parent doesn't drive. That parent has to push that child in a stroller to my daycare every day. And then go down straight to the bus station to get the bus to go to work. And sometimes, you see that parent get home, tired. I am obliged when - like yesterday it was raining. That parent, there was no way she was going to trek 30 minutes under the rain to come and pick up the child. She had to call me to find out if I can help pick her up from the bus stop. I had to go pick her up from the bus stop, I had to arrange someone to take her from my daycare to drop her and the baby. Otherwise, they would be wet to their buns under the rain. That parent is just one of the so many different cases we go through on a day-to-day basis. When you ask me as a provider, as a parent, as a business owner, what is the role of child care, I am submitting that child care is a public service. Child care is a public service. Child care should be prioritized. If we do not prioritize child care now, we are going to get down into what we call a big disaster later on. Like, I earlier on - earlier on indicated, the job we do is about infrastructure. Building the brains of these young kids. If we fail to build those brains correctly, it's about teaching them those small first, we call them magic words: "Thank you," "No, I'm sorry." Helping them to build their personality, helping them to build character. If we fail to do this, what is going to happen down the line? These kids will be wayward, one way or another. What will it need to fix the situation? If we fail at this level, we don't have the resources that we need to build our young kids so that by the time they become of age they have what it takes: character, they have the skills, they can manage their emotions, they can integrate, they have the opportunities to learn and stride and fly like every other child. Down the line, we are going to have more problems.

Senator Warren: Yes.

Ms. Ngoh: What I am saying is the play they do at daycare, play to me is a factory. It's a factory where the kids learn different things and that is just what we are doing. I would take one more minute to say something.

Senator Warren: So, we're going to need to keep this short. We're - we're a little over here.

Ms. Ngoh: Just a last minute. The one thing that I want us to note is that those kids that I'm watching, if I don't watch those kids, you and some of the senators will not go to work. If I don't sit here, if daycare providers, whether they are family-based, whether they are center-based providers, if they don't do this job, you will not be able to do your own job. Other people will be affected by that. If any mommy says, "Oh, I'm feeling sick, I cannot work today," five parents will not go to work. What is the multiplier effect of those parents not going to work?

Senator Warren: So thank you. This is really important and the work you do is enormously valuable and important. You know, we now have decades of research showing how important these early childhood experiences are and the children in your care are very lucky to have you. So we've talked about the impact of our underinvestment in child care on our economy. We've talked about the importance of investing in high-quality early childhood education on our children and long-term on our economy. There's just one more issue I want to talk about before we leave, and we've already alluded to it today but I want to go back to this again.

Our nation, for decades, has under-invested in child care. And child care workers are among those that have been hardest hit by the pandemic. As of this April, the child care industry had lost more than 150,000 jobs - that's one in every seven jobs in the sector. Women of color have been disproportionately hurt, and many providers are still struggling to get by. As a society, we have not valued this work the way that we should. In 2020, the average pay for a child care worker was only $12 and 24 cents. That's at the average. Think about how people can make more money doing the checkout at McDonald's.

So, here's the first question, and I can ask this one of you, Ms. Ngoh. Do you think that $12 an hour accurately reflects the value of the work you do for children and families? I think there's going to be a one-word answer here.

Ms. Ngoh: The answer is no. And I want to defend my "no" because when you pay me one dollar, what are you rewarding me for? You are equating what services that are only equal to twelve dollars. If doctors do take care of kids, and they are paid so much. If teachers, grade 3 teachers, they do take care of kids, they are paid so much. They are building brains. I am handling the most delicate portion of their development goal, of our children, and you think that I only deserve $12? When the same kid that I bring up to this level, I have done the most difficult job, when I do that job, I pass that child on to middle school, to pre-K school, they are paid more. 

Senator Warren: Yes, so it's very important work. Let me just ask, can you easily raise your fees so that the hourly wage goes up?

Ms. Ngoh: How can we raise our fees easily when the parents are struggling? I just now (inaudible) a story of this lady who makes $475 a week with three kids. How do I raise my fees to such a parent? When the pandemic hit, most parents were unable to even pay their out-of-pocket family fees. Now I had the decision to do what, to cancel out-of-pockets, suspending collecting those fees. I had too many things in my mind. If I send away these kids, these parents, I can't watch their kids for free, what will happen when they get subsidies, and later on need my program and are able to pay. So my first answer is no, it's not possible to just raise fees.

Senator Warren: So you have given us the illustration of how the child care market is broken. The price of providing high-quality care at fair wages is so high that many parents are simply priced out of the market. Child care providers can't offer more slots because they're worried that parents can't pay, which in turn, creates more shortages. So, can I just ask you, Dr. Stevenson, this looks like a market that's broken. I'm gonna ask you to wrap up here. What should we be thinking about to make this market work better?

Dr. Stevenson: The market is broken, and it's broken because parents cannot be paying for the investments that need to happen when their children are young. These are things that should be paid for over a lifetime. And that's exactly what our policymakers, what our system is set up to do, which is to have Congress fund these investments in children, have our government fund K-12, to have our government fund early childhood education and child care. And then our children will grow up to be able to be more productive, to earn more, to allow us to produce more, and that will actually make it so we can raise more in revenue, more than enough to cover the cost of this. So it's incredibly important that we provide that subsidy and we take that burden off of parents who desperately want to see their children invested in.

Senator Warren: Well thank you Dr. Stevenson, thank you all who have been here today. I think you're exactly right. We do not ask parents to pay the full cost of first grade, for their 6 or 7-year-old, and we should not ask parents to pay the full cost of educating and caring for a 2-year-old either. And this is exactly why I'm fighting for a $700 billion investment in child care. After parents, child care providers are some of children's most important teachers. We need to transform our child care system to recognize the skill and the value of care workers. Expanding quality care would mean that providers can offer fair pay and benefits, and it would make it easier for families to be able to find quality care. We have this opportunity. This is our moment. We are rebuilding America's infrastructure, and a core part of that is making sure that we make the investment in our next generation, in our children. We do that, and that lets mothers go back to work and fathers go back to work. Now that helps our economy, and that helps our youngest Americans. We have to make sure that when we rebuild infrastructure in this country that we create good middle-class jobs, and that child care providers are not left behind.