The Paradox of the Childcare Industry

The childcare industry has long been said to be a “broken, paradoxical market [with] low wages for workers and high costs for consumers,” and in this current, pandemic climate, most can’t afford to pay the absurd amounts of money demanded for this service. In addition, with the low pay yet intensive work that childcare jobs require, there is no real incentive for employees to work in this industry, causing a massive shortage of workers. Yet parents and guardians of children still desperately need childcare as most have careers that they can’t just skip out on.

This paradoxical industry is inhibiting the economy as there is a lack of substantial, affordable childcare. More and more people are starting to work remotely because they are unable to find placement for their children within affordable child care, and with the lack of incentive for workers, it doesn’t seem like this problem is getting any better. Working in child care equates to approximately $24,230 a year, and fast-food cooks make approximately $24,300 a year—the latter of which usually doesn’t require any prerequisites or degrees. The fact that these incomes are so close together says a lot. Parents pay an average of $8,355 per child a year to send them to daycare, yet these workers don’t even make three times that despite the intense amount of labor that they are required to put into their jobs.

With more people working remotely, many people, mainly women, are being forced to leave their jobs. This departure from their careers usually ends with a new, remote job that doesn’t pay as well, making it more difficult to even potentially pay for daycare if a spot opens up. Yet this is if these parents are lucky, some are unable to even find new employment.

It’s all a spiraling cycle. Childcare workers aren’t paid enough so there’s no motive for them to enter or remain in the industry and most parents are unable to afford available daycares, if there are any with spots open. This process “limits which jobs people can accept, makes it harder to climb the corporate ladder and ultimately restricts the ability of the broader economy to grow.” And this is only going to worsen, as the daycare industry has grown this year as more parents head back to in-person work, and there’s a more severe demand for the service.

In attempts to ease this issue, President Biden has stated that federal money will cover some daycare costs, promising that parents will only have to pay a maximum of 7% of their income for childcare. Though some are skeptical, many are hopeful in regards to Biden’s plan. His plan’s understanding of income differences is the main aspect that many are happy about, as “the lowest earning families can spend about a third of their income on child care,” yet this plan would change that.

In regards to childcare workers, Biden’s plan would also provide a minimum $15/hour wage for workers, hopefully creating an incentive for more workers to enter the industry and remain in it. This is motivating because despite the current lack of childcare employees, many love the industry and working with children but are unable to stay in it simply because of the lack of substantial income.