Pandemic-shattered childcare sector is costing young parents $13 billion a year as they’re forced to cut back on work

Childcare is expensive. But it turns out a lack of childcare may be even worse. 

There are about 20 million American families with young children, from newborn to 5 years old. And pandemic-related disruptions to childcare have cost these parents roughly $13 billion per year in lost income since 2020, according to a recent analysis released by the Century Foundation, a progressive think tank. The analysis used data from 37,000 households with young children who were surveyed in the Census Bureau’s Household Pulse surveys conducted between September and December of 2021.

Researchers Clive Belfield and Julie Kashen estimate that the direct effects of the ongoing lack of childcare—which include parents being forced to quit their jobs, rearrange or shorten work schedules, change their contracts, or scale back their careers—amount to $9.5 billion in lost earnings. 

Meanwhile the researchers estimate the indirect losses stemming from parents’ missed opportunities to advance their careers tally in at about $3.5 billion annually. 

About 20% of households with young children either lost or left their jobs owing to a lack of childcare. Other families cut back their work hours or took unpaid leave. Collectively, over half of families with young children took a hit on their household income when childcare was unavailable, according to the report. 

Of course, not all families are feeling the effects of a lack of childcare equally. Women and households of color have shouldered the biggest burdens of the childcare disruptions. About 23% of Black households with young children experienced a job loss, for example, compared with 13% of similarly situated white families. Among women, 18% report they left or lost their jobs compared with 14% of men. 

The disruptions to childcare didn’t end with early-pandemic lockdowns either. Nearly 25% of families with young children report they were still unable to regularly access formal childcare as of fall 2021. 

Biden’s Build Back Better plan was set to allocate federal funding to help families with children under the age of 5 pay for childcare based on their income and support the childcare industry, as well as establish universal pre-K programs. However, the legislative package remains stalled in Congress after Senators Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) refused to support the bill. 

But Treasury Secretary Janet Yellen said in a Bloomberg interview published Sunday that she believes Manchin may be persuaded to support a package that includes “two years of early childhood education.”

In the meantime, the pandemic isn’t over yet. And not only are the related disruptions to childcare still ongoing, but parents’ missed career opportunities could drag on for years. 

“The labor market losses in terms of lost opportunities may continue as a drag on these households’ earnings for many years after the worst impacts of the pandemic have subsided,” according to the report.

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