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Over 100 Economists Urge U.S. Congress to Invest in Child Care



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(Bloomberg) — More than 125 economists and public policy scholars signed a letter calling on U.S. Congress to support investments in affordable child care for American families.

“For decades, American families and in turn economic growth have been held back by the lack of modern care infrastructure, as working families have been forced to choose between work and caregiving, hampering female labor force participation and reducing productivity,” reads the letter, published Tuesday by the Center for American Progress, a left-leaning think tank. “Congress must seize this opportunity to finally support families and unleash economic growth.”On Wednesday, the U.S. Treasury Department released a report finding that the high cost of child care and lack of availability for many working parents is hampering economic growth. One study from the Council for a Strong America in 2018 found that the child-care crisis is costing the U.S. an estimated $57 billion a year. The pandemic has only exacerbated the issue, forcing many day-care centers to close. Those that survived are now dealing with staffing shortages, further constraining supply and pushing up prices. Meanwhile, millions of women still can’t get back to work.

President Joe Biden has  proposed $225 billion for child care as part of his 10-year, $1.8 trillion American Families Plan. The funding would establish a $15 minimum wage for workers, expand training for early childhood caregivers, and reduce the cost of care for low-income families. 

Republicans in Congress have pushed back against the proposed legislation, calling it an overstep. Republican Senator John Barrasso of Wyoming called it a “a cradle-to-grave role” for government.

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Tuesday’s letter didn’t support any specific legislation, but calls for “quality child care” to be part of “any major economic legislation.”

Among the signatories are former Council of Economic Advisors chairman Jason Furman, former U.S. Bureau of Labor Statistics commissioner Erica Groshen, and University of Michigan professor and economist Justin Wolfers.

Since the 1990s, child-care costs in the U.S. have grown at twice the rate of inflation, they said in the letter, while women’s labor-force participation has stagnated. Studies have found that costs vary widely by region, but families can pay anywhere between $300 to $1,500 a month for care, a 2015 analysis from the Economic Policy Institute found. 

“Lowering child-care costs for low- and middle-income families, who can spend between 14 and 35 percent of their income on child care, can relieve the financial pressure on families while promoting better long-term health, educational, and civic outcomes for children,” the letter said.

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