Opinion | Without day care and elder-care workers, the economy will founder

How about you get some of that sweet, sweet industrial policy for an industry that really needs it?

No production facilities. Not the tech sector. I’m talking about the “care” industry – the sector needed to lubricate the wheels when it comes to the rest of the economy, but one that Congress has largely ignored.

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The US economy has more than regained all the jobs lost to the pandemic. But there are some sectors that aren’t recovering nearly all of the workers they lost or laid off in early 2020. These include: childcare providers (whose ranks have started to shrink again in recent months) and nursing and residential care facilities.

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Both industries now employ about 10 percent fewer workers than before the pandemic. Together they have lost nearly half a million jobs online since February 2020.

Home health care employment is up 34,000 jobs, or 2 percent. But that growth isn’t fast enough to offset the loss of hundreds of thousands of comparable nursing home jobs, or to meet the skyrocketing demand for elderly care as the country ages.

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The need for nursing staff is great. But few people are willing to accept these positions, at least in exchange for the meager pay on offer.

The main problem is the huge gap between what it costs to pay a living wage and what families can afford. Caring for elderly patients or young children is extremely labour-intensive. The work itself is emotionally and physically demanding. And those in need of care often cannot bear the costs of these services on their own.

The result is prices that are too high, but not high enough: The usual costs for enrolling a small child in a day care center were already exceeding the state tuition fees before the current crisis. Yet, on average, childcare workers still make less per hour than zookeepers.

It’s no wonder, then, that nursing homes and childcare facilities are struggling to retain staff given widespread labor shortages and workers’ demands for higher wages. Even a one-off congressional cash injection as part of America’s bailout plan has not been enough to fix the childcare industry; it has temporarily stemmed the bleeding, but the sector has again shed every job in the last two months.

Bridging this gap requires sustained public funding. Politicians regularly propose such subsidies — as President Biden did last year for both childcare and elder care investments — but inevitably, priority is given to plans to expand the care economy.

That’s short-sighted. Problems in the care economy cascade into everyone Miscellaneous Industry. A lack of affordable care options is pulling workers from other sectors – particularly women, who tend to be the primary caregivers in their families – out of the labor market. It’s one of the reasons American women are less likely to participate in the labor market than their counterparts in other rich countries that have more robust safety nets.

A shortage of pre-K slots, in particular, is also hampering opportunities for disadvantaged children — and ultimately future taxpayers. Quality early childhood education is linked to much better employment and health outcomes when these children grow up. In fact, researchers have found that early investment in children’s education and development is among the greatest gains in using government funds.

There should be a broad support for investing in the care economy, be it mothers struggling to care for children and/or aging parents; or employers who need workers today or in a few years. Not surprisingly, key business groups are using their support to invest more in the care economy, particularly childcare.

But for some reason, politicians remain largely unmoved.

They are not skeptical about using the power of the state to direct resources towards it Miscellaneous Industries that free markets alone obviously cannot sustain. ‘Industrial policy’ is becoming increasingly popular with both parties – but only for traditionally ‘male’ industries, it seems. In the past two years there have been major bipartisan bills to provide federal funding for semiconductor manufacturing, electric vehicle charging stations and other physical infrastructure — on the grounds that Uncle Sam needs to make targeted industrial investments to help the rest of the economy grow.

There was a brief period in the past year when Biden officials argued that the care economy should be viewed as necessary infrastructure that also merits bipartisan investment. That statement provoked conservative ridicule at the time, even though conservative voters presumably also need childcare and elder care in order to be able to participate in the labor market.

America’s nursing safety net has always been flimsy. In the pandemic, it dissolved. Today, as American consumers and employers grapple with rising costs, labor shortages, and recession risks, the care economy still requires significant government investment to allow other industries to thrive.


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