'Something Not Always Better Than Nothing': Experts Warn Against Biden's Childcare Scheme

A new Biden administration policy that will reserve federal manufacturing funds for companies that help their employees access childcare will only perpetuate a system in which far too many U.S. families struggle to find care, one expert on the crisis said Monday.

The Commerce Department on Tuesday unveiled a new rule tied to the CHIPS and Science Act, which includes $39 billion in federal subsidies to invest in semiconductor manufacturing.

That money would only be available to companies that help their employees access childcare in a number of potential ways, including building childcare centers exclusively for workers' families near factories, paying existing care providers to make space for the children of employers, or subsidizing childcare costs.

Commerce Secretary Gina Raimondo assured the public that the policy will ensure the semiconductor industry can "expand the labor force" and recruit more women, but childcare policy expert Elliot Haspel raised a number of questions about the plan, including whether the Biden administration is aware of the current shortage of childcare workers in the U.S. and the shortage of available spaces for children and daycare centers that it's caused.

"Do any of these companies need to ensure [childcare] educators get a competitive wage?" asked Haspel. "What happens if their workers just end up on waiting lists? Doesn't feel fully thought out."

"Making childcare a job-linked benefit means that when you lose your job, you lose your childcare and your kid loses a caregiver."

As The New York Times reported Monday, nearly 58,000 childcare jobs have been lost since the coronavirus pandemic began, forcing centers to reduce their capacity. The shortage of childcare workers has been linked to chronically low pay in the industry, with the Bureau of Labor Statistics estimating that employees make an average of $27,680 per year or $13.31 per hour.

A Household Pulse Survey taken by the U.S. Census Bureau in January 2022 found that 1 in 4 families with children under the age of five were unable to secure childcare, and a study by the Bipartisan Policy Center in 2020 found a shortage of three million open childcare slots across 35 states. Nationwide, the average time a family spends on waiting lists for childcare is 18 months. Once families do secure a spot, more than half spend at least 20% of their income on childcare, according to the First Five Years Fund.

Haspel, the author of Crawling Behind: America's Child Care Crisis and How to Fix It, expressed appreciation for the administration's call for employers to provide on-site childcare, which he said "helps parents and is good for businesses."

However, he warned, tying childcare to employment instead of treating it as a public good like K-12 education risks leaving millions of struggling families out and causing the childcare crisis to snowball into an even bigger problem, just as the U.S. healthcare system has since the for-profit insurance system was established after World War II.

"One reason why we do not have universal healthcare? It was more politically expedient to make it an employer-linked perk," said Haspel. "The idea caught on, and the train left the station. We're still paying for that decision today."

As Haspel explained at Early Learning Nation in November:

While no longer widely remarked upon, in 1945 President Truman proposed a national health insurance program that would have been folded into the Social Security system. The proposal would have created a comprehensive, universal, single-payer system akin to the U.K.'s National Health Service which emerged in the same post-war period.

Truman's proposal set off a vicious debate (including lots of accusations about socialism, and the American Medical Association launching a multi-million-dollar campaign to oppose it)...

Of course, we know the end of this story. By 1958, 75% of Americans had an employer-sponsored plan. This choice had consequences. The entrenchment of health insurance as a private job-linked issue has led to a dysfunctional, unpopular, expensive, ineffective healthcare system—and one which has proven almost impossible to overhaul. People don't like the system but are used to the linkage, and the health insurance lobby is a mightily powerful opponent.

The Biden administration is unveiling its CHIPS-linked childcare scheme more than a year after right-wing Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (I-Ariz.) opposed a number of proposals to invest in the economic well-being of U.S. families, including through subsidized childcare.

As the Times reported, Raimondo told staffers after the Democratic Party's failure to pass childcare legislation as part of the Inflation Reduction Act last summer, “If Congress wasn't going to do what they should have done, we're going to do it in implementation" of bills that President Joe Biden did sign into law.

"Something is not always better than nothing," tweeted Haspel. "I'm as upset as anyone that real childcare reform died thanks to unified opposition from the GOP and then Joe Manchin. But we must fight for a system that works rather than accept a fatally flawed premise."

Establishing a system in which childcare is linked to employment raises questions about what will happen to a worker's children if they lose their job or if a company changes its benefits, he added.

"You don't want these things bundled with employment for the obvious reason that people want these services to be continuous as they move from job to job," Matt Bruenig of the People's Policy Project concurred.

To solve the childcare crisis, said Haspel, the care of children must be treated as a public good—one that's paid for through fair taxation of corporations.

"Employers SHOULD have skin in the game for childcare," he added, but the way to ensure they do is not through "an ad hoc move."

"Levy taxes and use those dollars to build a system that works for everyone!" he said.

He compared the Biden administration's plan to one in which companies would be required to ensure their employees' children have access to elementary education, if the federal government didn't provide public schools.

"The question isn't 'on site childcare or no'," said Haspel, "it's whether we support on-site childcare as part of a comprehensive, publicly-funded childcare system that provides options for all parents, or simply as a discrete perk for a given number of employees working at a given site until they leave/are fired from their job or the company decides they don't want to run a center anymore."