The Democrats’ “Build Back Better” proposals for childcare represent a disastrous step in the ongoing government takeover of the sector — raising care costs, creating dependence, and instilling incentives against work and earning more income along the way.
New York Times columnist Ezra Klein recently heralded an ascendant “supply-side progressivism.” Modern leftists want a bigger welfare state, he claimed, but they increasingly understand that “if you subsidize the cost of something that there isn’t enough of, you’ll raise prices or force rationing.” Scant evidence of such an enlightened view is observed within the childcare sections of the Democrats’ House bill. This is the classic recipe of government policy constraining supply and then subsidizing demand.
Despite a stated goal of making childcare more affordable, the legislation would make it more expensive:
- eligible providers would have to pay “living wages” to all staff, with child-focused care workers paid commensurate salaries to their state’s elementary school teachers. These provisions would raise costs dramatically in a labor-intensive sector where staff costs can average around 60–70 percent of the total. The average childcare worker nationally is currently paid $25,460, against $60,660 for the average elementary school teacher (in other words, the latter earns 138 percent more).
- to qualify for federal grants, states must also develop licensing regimes “appropriate for childcare providers in a variety of settings.” Past research on childcare licensure, including educational requirements, has found that these also raise costs by restricting the supply of would-be carers, without improving child outcomes.
- state program plans would have to place providers into “quality” tiers, providing resources to achieve “high quality” care for all. In childcare speak, “quality” isn’t about what parents actually want, but criteria defined by government officials, usually meaning low child to staff ratios, extensive educational requirements for staff, and other regulations, all of which tend to raise costs and reduce the availability of care in poor areas (again, without much evidence they improve outcomes for kids or parents).
This bill then doesn’t make childcare cheaper, but more expensive. The main thing that it changes is who pays for it, with taxpayers on the hook for extensive demand-side subsidies through an income means-tested copayment system with a “sliding fee scale.”
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