“This policy achieves multiple goals all at once,” said Carmel Martin, deputy director of the Domestic Policy Council. “It supports workers’ ability to go to work, it improves the working conditions for care workers, helping them to contribute more to the economy, and then at the same time it supports healthy child development so that they’ll be more likely to go onto college and be higher earners in the economy.”
The child care industry was struggling long before the pandemic. According to a 2019 analysis by Moody’s, the cost of day care has doubled since 1999, rising at a faster rate than even the cost of housing and prescription drugs, and may eat up almost a third of median family income. Government subsidies are currently available only to those in the lowest income brackets and reach only a small fraction of the population.
At the same time, the median pay for child care workers — a majority of whom are women and women of color — was a little over $12 per hour in 2020, or about $25,500 a year, compared with $60,000 a year for kindergarten teachers.
Under the president’s plan, a large chunk of Americans who fall in the middle income bracket — defined as those earning 150 percent of state median income, which based on 2019 census data, could be anywhere from $98,500 to roughly $128,000 — would pay no more than 7 percent of their income for child care. Low-income parents would pay nothing at all. The proposal would also spend $200 billion to make prekindergarten free for all 3- and 4-year-old children, regardless of family income levels.
Notably, the president’s plan would also change how child care providers receive funding. Currently, providers that care for low-income children receive subsidies based on attendance, rather than on enrollment numbers. Every time a child is out sick, the provider loses income. Grace Landrieu, a policy adviser at the Domestic Policy Council, said that, if passed, the president’s plan would base funding on enrollment. It would “give providers a more sustainable funding stream, which we think is also going to help with the supply of providers around the country.”
These investments would be conditional, with providers required to meet certain quality standards, including keeping class sizes small, paying their staff no less than $15 an hour and providing on-the-job training programs.
Additionally, the president has proposed a national paid family and medical leave program of up to 12 weeks and making a widely popular child tax credit permanent, both of which highlight the administration’s push to emphasize that work life and family life aren’t mutually exclusive but “inextricably linked,” as Treasury Secretary Janet Yellen put it in a statement released on Wednesday.